Investing is a global activity that entails buying undervalued assets in the hopes of long term growth, or buying solid investments that pay out dividends. This passive income venture isn’t usually suitable for everyone, as it has its proper risks along the way. Individuals who are about to invest are responsible for their doings, thus being highly educated becomes a duty and a must. Would you ever purchase something without knowing what it does? Well, you’ll be surprised that most people do that, and it’s one of their biggest reasons for failures
In this article, we’re going to talk about why most people stay away from cryptocurrencies, and what their excuses usually are.
1- We don’t know what they are!
Yes…Till now, the majority of people around the world still haven’t heard of cryptocurrencies, or don’t know what they are exactly. In a survey done in the UK in 2019, they stated the following SHOCKING news:
73% of U.K. consumers don’t know what a cryptocurrency is or are unable to define it, according to a new survey from the country’s financial watchdog, the Financial Conduct Authority (FCA).
It is very normal for people to lack knowledge about a certain topic, even if it existed for 12 years now. Not everyone can be Tech savvy and always on the hunt for the latest tech trend. You might say well, cryptocurrencies are making headlines everywhere! Again, not all people listen to the news. Many people simply skip complex lingo and go on their normal days. That’s why buying into something requires deep research on a specific topic. That’s what most successful investors do.
2- They are HIGHLY volatile
Good job! You just stated a very known trait of cryptocurrencies. It is very known that they are volatile by nature, as their prices are purely driven by SUPPLY and DEMAND (Econ101). This means that any good news will drive the price up as more people will attempt to buy them, and any bad news will drive the prices downwards as people will tend to sell them. With no official body to regulate them, they stand as the world’s first decentralized digital assets. That’s why any move in any direction in the current stage would highly affect prices. In the long term, price stability is a goal to be achieved.
3- They are Bubbles about to POP!
Cryptocurrency enthusiasts are bored hearing this statement. In order to say they are bubbles, we must understand what bubbles are when talking about an asset.
A bubbe is usually a term coined for assets that have their value shooting up in prices in a small period of time, without any explanation. A famous bubble through time was the very first one back in 1637, attributed to the “Tulip mania” which was a period during the Dutch Golden Age when contract prices for some bulbs of the recently introduced and fashionable tulip reached extraordinarily high levels, and then dramatically collapsed in February 1637.
Now in all seriousness…How can someone compare cryptocurrencies, that serve IMMENSE societal purposes, be compared to flowers? Here are quick problems that cryptocurrencies address:
- Banking the unbanked
- Remittance system
- No manipulation since they are decentralized
- Hedge to inflation
- Innovative and open many doors to new projects
- Quicker, faster, and cheaper than traditional finance
- Open and accessible 24/7
Now let’s look at the list of what flowers can do:
- They look nice
It is true that cryptocurrencies may be overvalued sometimes, but in the longer timeframe, prices tend to go back to their average uptrends
Conclusion
Always do your research before investing in anything in life. You can’t buy what you don’t know. For cryptocurrencies, it’s the same; know what purpose does this specific coin serves, check the community for red flags, check the current price and the potential market value it should attain, and then place your proper risk management strategies. We at CryptoTicker always provide you with the latest trends and analyses to better assess your crypto holdings. Check out our how to trade article for more info.
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Rudy Fares