Is Cryptocurrency a Good Investment? Everything You Should Know

is cryptocurrency a good investment

Have you kept up with all the hype surrounding cryptocurrency in recent years? If so, you may be under the impression that everyone in the U.S. is investing in it right now.

But in reality, only about 15 to 20% of Americans have invested in crypto at this point. Many people have mixed feelings about investing in crypto.

Are you still on the fence about investing in crypto? Then you might be wondering, “Is cryptocurrency a good investment?”

In this article, we’ll attempt to answer this question by breaking down everything you need to know about crypto. It’ll help you invest in crypto with complete confidence if you ultimately decide to do it. It’ll also explain why investing in a crypto fund might make the most sense for you.

Keep reading to learn more about the things you should know about investing in crypto.

To Start, What Is Cryptocurrency?

Cryptocurrency hasn’t been around for very long. Most people credit Satoshi Nakamoto with founding cryptocurrency back in 2009 by introducing Bitcoin to the world.

This is a big part of the reason why so many people are asking, “Is cryptocurrency a good investment?” There is still so much uncertainty surrounding it because of its newness.

If you aren’t familiar with cryptocurrency, it’s a digital form of currency outside the centralized bank system. Crypto can be bought, sold, and traded using blockchain technology to verify and maintain crypto-related records.

Crypto is secured by cryptography that makes it virtually impossible to counterfeit. It’s kept safe in cryptocurrency wallets protected by private keys that must be used to access it.

How Many Types of Crypto Exist?

Because Bitcoin is widely believed to be the first cryptocurrency to come around, some people think it’s the only type of crypto they can invest in. But this couldn’t be further from the truth.

At the moment, well over 20,000 cryptocurrencies are floating around. This number has increased substantially each year as crypto has become more popular.

Bitcoin is still the most well-known cryptocurrency of the bunch. But there are also a host of other types of crypto that have popped up over the last decade. This includes:

  • Ethereum
  • Tether
  • Binance Coin
  • Cardano
  • Dogecoin

Since there are so many types of crypto, it has become increasingly challenging to answer the question, “Is cryptocurrency a good investment?”

Certain types of crypto might be better investments than others. It’s why you shouldn’t blindly invest in crypto based on things like media hype.

What Does It Take to Invest in Crypto?

The concept of investing in crypto might still be new. But it’s surprisingly easy to buy and sell crypto pretty much on a whim.

There will be a bit of a learning curve that’ll come along with investing in crypto. But once you get the hang of it, you can do it directly from your smartphone or computer with just a few clicks.

This is the process you’ll need to go through to buy and sell crypto:

  1. Choose a cryptocurrency exchange
  2. Set up an account with a crypto exchange
  3. Decide which type of crypto you’d like to buy or sell
  4. Use a crypto wallet to either convert cash into crypto or vice versa
  5. Protect the key for your crypto wallet to keep everything in it safe

It’s great that buying and selling crypto has become so easy. But at the same time, it can also result in people making mistakes when investing in crypto.

If you aren’t patient enough about buying and selling crypto, you might end up making poor investments over time that could cost you money in the long run.

Is Cryptocurrency a Good Investment?

Most people will buy and sell smaller amounts of cryptocurrency when they first start with it. They’ll do this to give themselves time to experiment with crypto to see how they can use it to turn a profit.

As time goes on, you may want to begin making actual investments in crypto. At this point, you’ll need to know the answer to the lingering question, “Is cryptocurrency a good investment?”

Unfortunately, the only surefire answer to this question will be, well, it all depends. 

There are people out there who have made millions of dollars off Bitcoin and other forms of crypto. In quite a few instances, these have been ordinary people who have managed to strike it rich with crypto.

Some people have lost thousands of dollars by sinking large amounts of money into crypto. At least some of them would tell you that investing in crypto isn’t a good idea.

But we would say that crypto can be a good investment if you’re smart about how you choose to invest in it. You’ll need to be patient to some degree to turn a consistent profit off crypto in the months, years, and even decades to come.

How Much Risk Comes With Investing in Crypto?

Investing in crypto can be tricky for some people because there is at least some risk that’ll come with doing it. A recent survey found that many people realize this, with about 60% of Americans referring to crypto investing as highly risky.

Crypto can be risky because of how much the prices of different types of crypto can fluctuate. It isn’t uncommon for crypto prices to rise and soar, sometimes within short periods.

Many newer forms of crypto aren’t anywhere near as stable as you might like them to be. It can be almost impossible to predict how the value of crypto will increase and decrease on a daily basis.

The good news for crypto investors is that there is always a chance their investments will go up in value dramatically and make them rich overnight. The bad news is that crypto values can come crashing down at a moment’s notice and put people in a tough financial spot.

Just about all investment opportunities will come with some risks. But crypto, in particular, can carry risks that force people to be more careful when investing.

Can You Manage Risk When You Invest in Crypto?

If you’re interested in investing in crypto, you’ll need to take specific steps to manage the risk you’ll be taking on. The harder you work to lower your risk, the better off you’ll be when investing in crypto.

So, how can you manage your risk when investing in crypto? Here are a few things you should consider doing:

  • Limit how much of your investment portfolio is devoted to crypto
  • Avoid buying and selling crypto simply because of the media hype that surrounds it at times
  • Practice patience when it comes to buying and selling crypto
  • Stay up-to-date on all the latest crypto-related news
  • Try not to tie up all your money in any one specific type of crypto

You may also want to investigate crypto hedge funds to see how they work. It could be just what you need to invest in crypto while limiting the risk you take.

What Is a Crypto Fund?

As we alluded to, a crypto fund might solve your problem when you’re looking into investing in crypto without taking on a ton of risk. More and more crypto investors are putting their money into crypto funds rather than buying individual types of crypto.

So, what is a crypto fund, also often referred to as a crypto hedge fund? Well, it’s essentially a fund managed by a financial expert who picks and chooses different types of digital assets to invest in. Investors can then participate in crypto hedge funds and have them managed by experts.

A cryptocurrency fund will lower the risk investors will have to take on when investing in crypto. Their money will be spread out among a bunch of different cryptocurrencies, increasing their chances of seeing steady returns on their investments.

Are Crypto Funds Risky?

Investing in a crypto fund instead of investing in crypto on your own isn’t going to eliminate the risk you’ll face altogether. No matter how you invest in crypto, there will always be some risk associated with doing it.

But because crypto funds are managed by industry experts, the risk you’ll face will be substantially lower than it would be otherwise. Someone who knows what they’re doing will be in charge of managing your crypto fund to ensure it provides the best returns possible.

Investing your money in a crypto fund will take a lot of the guesswork out of the equation for you. You won’t need to worry about reading every crypto-related article and buying and selling crypto on your own all the time.

You can rest assured knowing your money is being invested wisely in a crypto fund. You can also read through regular reports on your crypto fund’s performance to see how well it’s doing.

What Are the Benefits of Crypto Funds?

Investing in crypto through a crypto fund will provide you with a wide range of benefits. It’ll do more than just reduce the risk you’ll face when you invest in crypto.

Take a look at several other benefits of investing in a cryptocurrency fund:

  • Diversifies your cryptocurrency investments
  • Introduces new forms of crypto you may not be familiar with into your investment portfolio
  • Puts you in a position to see steadier returns on investments
  • Helps hedge your investments against things like inflation
  • Gives you a better sense of how well your crypto investments are doing on a monthly and yearly basis
  • Enables you to invest in the latest forms of crypto and other digital assets

At the end of the day, you’ll find that you will be so much less stressed out when you invest in crypto through a crypto fund. You won’t feel like you’re taking huge risks every time you choose to buy or sell crypto on your own.

Which Cryptocurrency Fund Should You Invest In?

Does investing in crypto through a crypto hedge fund sound like a good idea to you? Then you’ll need to find the right cryptocurrency fund to invest in. This might be easier said than done.

There are hundreds of crypto funds at this time, and that number is continually growing. It can make it challenging to figure out which cryptocurrency fund would be the right option.

Your goal should be to look around and try to find the right crypto fund for your specific situation. It should be through a company you know you can trust to provide you with an excellent crypto investment opportunity.

TrueCode Capital would love to talk to you more about investing in crypto through crypto hedge funds. We can also work to provide you with an even more precise answer to the question, “Is cryptocurrency a good investment?”

You’ll feel better about investing in crypto when you have all the facts. You’ll also see why investing in a crypto fund makes so much sense.

Contact Us to Discover More About Crypto Funds

If you’d like to get additional information on partnering up with a crypto hedge fund, TrueCode Capital can assist you. It’ll let you take advantage of everything investing in crypto has to offer.

By doing the necessary legwork, you can feel a lot better about investing in crypto. You’ll have more confidence in your decision to do it when you know you’re doing it in the right way.

You won’t find yourself asking, “Is cryptocurrency a good investment?” At least, not as often.

Reach out to us today to speak with someone about your crypto investment needs.

Learn More: Take the crypto quiz

Take a three-minute quiz to learn how to become a more confident crypto investor.

When you take the quiz, you’ll get a 15-page PDF report summarizing your qualifications:

  • Do I understand my wealth objectives?
  • Do I have the knowledge to confidently invest in crypto?
  • What is the impact of crypto investing in my portfolio?

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