Why do people invest in cryptocurrencies?
Cryptocurrencies rose sharply in 2017-2018, despite the fact that they existed almost a decade earlier. Although the crypto fever jump is gone, they have retained the aura of the air.
The investment world still has fond memories of the huge returns this interesting asset class offers and due to its volatility it is very popular with many investors and offers plenty of trading opportunities at all times.
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Crypto investors are mainly divided into two main categories. The first group strongly believes in the idea of a decentralized peer-to-peer exchange environment to replace an outdated and outdated global financial sector. For this group, it is an investment in cryptocurrencies.
Speculators can assemble another group that invests in crypto only for financial gain. Speculators, including large institutions and private investors, have drawn to the cryptocurrency arena over the years due to unusual returns in the asset class.
Depending on goals and risk appetite, investors can invest directly by purchasing cryptocurrencies and tokens through cryptocurrency swaps or indirectly by investing in brokers offering cryptocurrency CFDs.
Risks associated with investing in cryptocurrencies
Here are some risk factors when investing in cryptocurrencies:
As a valuable digital asset, cryptocurrencies are the target of sophisticated hacker attacks. Investors holding cryptocurrencies on cryptocurrency exchanges that offer online wallets may be at risk for successful hacker attacks.
Governments around the world have always been skeptical of cryptocurrencies. They have always shown a negative attitude towards cryptocurrencies, leading to massive price losses.
Incorrect ICO / Scams
The first coin offerings (ICOs) provide investors with an incredible opportunity to profit from the cryptocurrency rally on the first floor. While the results can be significant, investors can allocate their money before they get to the ship. Without proper research, it can be quite easy to trick investors with fake ICOs, which are just the order of the day.