By Saransh Gupta
Nearly 8% of American adults are currently investing or have invested in cryptocurrency (Uzeki, “How Many People Invest in Cryptocurrency?”, 2018). The new trend of crypto is notable, but how safe is investing in it? Cryptocurrency, like Bitcoin, Ethereum, etc., is a type of currency which uses digital files as money and is likely part of the future. However, the road to the cryptocurrency of the future may be rocky. If you would like to invest in cryptocurrency, you should be aware of the market trends, risks and whether or not you are investing in the right currency.
Future investment in cryptocurrencies could provide greater economic security for consumers concerned about the government’s ability to protect their money, regardless of what country they live in. Many coins will gain stability, and they could help protect against both short-term and long-term inflation/value changes, according to Dustin Wei, Head of Development at coinflip.atm.
However, as we understand cryptocurrency now, there are both advantages and disadvantages to shifting economic transactions to cryptocurrency. “There’s a lot of risk in cryptocurrencies due to the lack of regulation, the high rate of theft, and the lack of insurance for cryptocurrency wallets,” (Uzeki, “How Many People Invest in Cryptocurrency?”, 2018). Currently, there is a lot of potential for value and usage growth with cryptocurrency, but the potential risk is also great. Some experts think the future may not bode well for many specific cryptocurrencies and this could mean a total loss for owners of those currencies. For example, as cited in an interview with Bloomberg News (Nov, 2019) the CEO of a leading cryptocurrency Ripple, Brad Garlingson says, “There around 3,000 different digital assets that trade on a daily basis now… I have said publicly before that I think that probably 99% of all crypto goes to zero but there is that one percent that is focused on solving a real problem for real customers and is able to do that at scale and that is going to be game changing…”
Overall, though the business of crypto has risks, it is a field that is constantly changing and is an interesting field to watch.