Should You Invest in Cryptocurrencies?

Opinion from experts in the field of finance about whether or not cryptocurrencies make for good investments remains divided. However, unless you look at fixed-term bonds offered by banks, are there any absolutely safe investments? No matter whether you invest in real estate, precious metals, or stocks, risks remain omnipresent.  Besides, there are several people who have made money by investing in cryptocurrencies, and you might be able to as well.

What is the Future of Cryptocurrencies?

As of now, there are over 2,000 listed cryptocurrencies. However, a report by CNBC suggests that over 800 are no longer in use, meaning they’re worth nothing.  In addition, only a few continue to remain relevant. One also needs to keep an eye out for scams that come in the way of initial coin offerings (ICOs).

The value of bitcoin, one of the leading cryptocurrencies, continued to largely drop from December 2017 to late 2018. After a few months of stagnancy, its rise in value has remained fairly consistent since the end of March 2019.

Given that institutional funding is entering the cryptocurrency market, it is not out of line to predict a significant change in this realm. In the recent past, two U.S. dollar-backed cryptocurrencies – the Paxos Standard (PAX) and the Gemini Dollar (GUSD) – received approval from the New York State Department of Financial Services.

There is a possibility that a few might make it to the NASDAQ, which would add further credibility to major cryptocurrencies. Governments of different countries the world over are in the process of formulating cryptocurrency-related guidelines, and these should help build investor confidence. What will also work in the favor of cryptocurrencies is their adoption by banks, major tech companies, and other institutional players.


How Much Should You Invest?

As any seasoned investor will tell you, your investment portfolio should remain diverse. Determining how much of it should include cryptocurrencies requires that you pay attention to aspects such as your risk tolerance and your knowledge about trading in cryptocurrencies. Putting away a small fraction of your investment toward cryptocurrencies is a safe way forward.

Learning the Ropes

You might be eager to start trading, but don’t jump on the bandwagon until you get a basic understanding of how this field works. Take time to learn all you can about crypto wallets, exchanges, keys, and trading strategies. Don’t start by making too many trades in a day because you might end up paying a tidy sum as fees. You also need to be aware of any tax implications. In the UK and elsewhere in Europe, you might need to pay capital gains tax when you sell a cryptocurrency or exchange it for another cryptocurrency.


Investing is cryptocurrencies exposes you to risk, no doubt, but there is money to be made if you play your cards right. Investing more money than you can afford to lose is obviously not the way to go. However, if you don’t mind waiting out lull periods, cryptocurrency investments might work well for you.

About the Author

Jon works with iCompareFX. His job as a researcher has him delving into how different overseas money transfer companies operate. When he’s not working, he likes discovering music from across genres.

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Finance Freedom

Hi! My name is Lukas, I am in my mid 20’s and I am an engineer from Estonia. I started investing at 2014, so I have been investing for over 6 years. In addition, I was 20 years old, when I started my first company and just 21 years of age, when I made my first investments. I was hooked instantly! In this blog I will be documenting my journey towards financial freedom.

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