Cryptocurrency, also known as digital or internet-based currency has become a serious topic. Back in the days, almost everyone didn't even think that things like Bitcoin, Ether, or Ripple were going to explode sooner or later. Some traders have made a lot of money in long-term goal planning and yeah, you would have become a millionaire by now if you brought a few hundred Bitcoins in 2009 or 2010.
Why Cryptocurrency Is Bad?
"On the ground of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending," stated the chairman and CEO of Berkshire Hathaway Inc.
- Cryptocurrency is not for inexperienced day traders.
- Rising attention of scammers and fraudsters.
- The heartbeat increases looking at the volatility of cryptocurrencies.
- It's an imaginary or digital asset, don't compare it with gold and other physical assets.
1. Cryptocurrency is not for day traders, especially if you lack practical knowledge.
Whoever made some real profit out of investing in cryptocurrency were none other than the damn HODLers (holders).
The volatility is enough to give you an anxiety attack, certainly, cryptocurrency trading is not for someone who wishes to become a fortunate person within a damn fortnight but certainly can work for your daily wage.
I have seen people earning more than 5k USD per month, without putting in much effort.
Though if you still wish to get some damn profits out of day trading in cryptocurrency, then proper research is what you have to do.
It is bad as alcohol, but if you invest smartly, it is as good as using alcohol in a limited amount to heal your damn anxiety or stress without causing a severe impact on your liver.
Although its high volatility makes it very profitable, one has to be a lot more cautious enough while dealing with it because the value of cryptocurrency can crash as quickly as it has risen.
2. Cryptocurrency is rising at a rapid pace, and so is the attention from hackers/scammers/fraudsters.
Currently, a Bitcoin price is roughly half a hundred thousand dollars. Do not have any central authorities to regulate it and prevent scams, offering some of the tough hackers to manipulate the system and get access to the bitcoins.
On the other hand, if the central authorities were to have a role in cryptocurrency, they could have prevented scams and hacks by installing cybercafes especially for cryptocurrency or anything which can provide a strong reason for people to have faith in cryptocurrency safety.
But cryptocurrencies use decentralized technology, which has its own disadvantages as well as few advantages such as more than one computer has the information regarding the transactions. Cryptocurrency can be manipulated.
3. The volatility makes it too unsafe for vendors and customers to have faith in cryptocurrency.
The price fluctuation of cryptocurrencies is too vast. You'll never know when a cryptocurrency will lose its value. Due to its instability, customers, as well as the vendors, don't use cryptocurrency, they would rather be happy with paper/plastic money as the value doesn't lose too fast and is more stable than cryptocurrency.
Moreover, not everyone is a trader or a person who want to take the risk to gain profit out of holding their cryptocurrency. Vendors aren't full-time traders who would wait for the right time to sell off their cryptocurrency to make real money. Volatility makes it riskier than storing money in the locker.
4. Choosing a digital asset over a physical one, eh?
The price of gold is damn more stable than any cryptocurrency. People view cryptocurrency as an investment but they have forgotten the fact cryptocurrencies offer neither dividends nor a yield.
On the other hand, physical assets seem damn more real and they are actually real, at least more realistic than digital or internet-based assets.
For instance, if you buy gold then for your kind information, gold has been termed as better for long-term return as well as it is a lot more stable than any cryptocurrency you talk about till now.
The pace at which cryptocurrency has increased in its value is somehow pointing out a damn hint that it will soon create a black hole in the finance world.
You can touch and feel the gold whereas you will not be able to sleep due to the fear that someone may come to know about your private key to get access to your bitcoin.