Is investing in cryptocurrencies worth it?

One of the main doubts in the financial market is whether investing in cryptocurrencies is worth it. Cryptos have revolutionized the asset market, with Bitcoin maintaining its position among the most valued cryptocurrencies. Check it out below. 

Investing in cryptocurrencies is worth it

Today, in the midst of market volatility, investors often ask themselves: is investing in cryptocurrencies worth it? Bitcoin was the first crypto introduced to the market, revolutionizing the world of assets. 

Today, despite the uncertainty in the market, Bitcoin remains among the most valued cryptocurrencies in the world. Although most people imagine that this market is saturated, the reality is different. 

As with any investment, it's important to know about the crypto market before investing in assets. This is because, as with any business, the market suffers from price instability. 

However, even if the market fluctuates, there is growing interest in the buy & hold method. In other words, even in the midst of the falls, the cryptocurrency scene is maturing and it is worth investing, as long as there is knowledge about the operation.

What is cryptocurrency?

Cryptocurrencies have transformed digital payments. This is because these assets work just like physical money, but with a few differences. One of the main characteristics of cryptos is that they exist only in the virtual world. 

With cryptocurrencies, users are able to make financial transactions digitally, without the intervention of a third party, as is the case with banks. This makes the process simple and practical. 

Unlike conventional currencies, cryptocurrencies are not regulated by governments, people or companies. This means that the assets are decentralized. However, despite this characteristic, cryptocurrency is just as, if not more, secure than traditional currency. 

The blockchain system was born alongside cryptocurrency. This technology serves to record all transactions between crypto users. In addition, it is immutable and incorruptible, where all the blocks created are kept under lock and key. 

In this sense, in order to carry out a cryptocurrency transaction, users need to confirm information through blocks. This data is shared across several computers around the world, with mathematical data that varies with each record. 

This makes it impossible to hack the blockchain system. This is because, in order to do so, cybercriminals need all the blocks of information from the entire computer network. And since this needs to be done simultaneously, it's almost impossible to break into the program. 

Cryptocurrency market today

Bitcoin was created in 2009, along with the blockchain system, and since then cryptocurrencies have aroused the interest of many investors. During the Covid-19 pandemic, BTC reached a record high, which was driven by the instability of the stock market. 

As a decentralized asset, most investors have included cryptocurrencies in their investment portfolios to protect their assets and increase their earnings. However, as demand has increased, the value of the coins has risen. 

The cryptocurrency experienced one of its biggest falls shortly after this happened. As a result, the price reached $22 thousand US dollars in July 2022. This movement was due to a number of factors. 

One of these factors is inflation in the United States. With interest rates high, investors are looking for American government bonds, which are low risk. At the same time, most shareholders have given up on investing in risky assets, such as cryptos. 

How to invest in cryptocurrencies

Before investing in cryptocurrencies, shareholders often look at the ways in which they can do so. Currently, there are several investment formats that match the profile of aggressive or conservative investors. 

However, there are bureaucracies and requirements that accompany each product, which directly interfere with the investor's choice. There are different ways to invest in Bitcoin. Check them out below:

• Direct Investment: This type of trading takes place directly on specialized platforms, such as exchanges. In this case, all you have to do is open an account on one of them and start trading; 

• ETF: This type of trading creates a portfolio, i.e. investors invest in replicas of assets based on an indicator; 

• Investment Fund: This case is similar to the previous one, but trading takes place via the Stock Exchange. This means that investors can buy shares directly from brokers; 

• p2p: This trading format takes place directly between the buyer and the seller. In other words, there is no intermediary for the purchase, but it is important to have confidence so as not to fall for scams; 

• Digital Account: Last but not least, investors can find cryptocurrency offers in the digital account. In this way, they can store them in their own account. 

How investing in cryptos works in practice

Like any investment, the cryptocurrency market is subject to instability. The reason for this is volatility. For this reason, most investors have doubts about whether the investment is really worthwhile. 

Anyway, as with any investment, the answer is individual. This is because each investor has their own needs and characteristics, which interfere with whether or not they invest in certain products. 

Before investing in any product on the market, such as cryptos, investors should consider their investor profile. This is important because it measures your risk tolerance, as well as the possible loss of investments. 

Cryptocurrencies, for example, are not suitable for investors with a reserved attitude. After all, the market is very risky. On the other hand, moderate and bold investors can bet on these assets, as they can withstand the volatility. 

Another point to consider before any investment is your financial objective. When investors have a destination for their income, it is essential to choose assets that are in line with their thinking. 

In other words, if you want to build up an emergency reserve, investing in cryptocurrencies is not the way to go. After all, this type of objective requires investing in safe assets, as is the case with fixed income. 

So, before investing in cryptocurrencies, know your investor profile and your financial goals. This is the best way to find out whether or not you are prepared to face the risks of this market.