There has been some sort of a craze about cryptocurrency, especially among young people. This craze has resulted in both positive and negative outcomes- just like any other investment out there. But what exactly is it about cryptocurrencies that sets it apart? What are the risks involved with this type of investment? These questions are a bit difficult for most adults to answer because most of them are not really interested in knowing what it actually is about. Most adults quickly rush to dismiss bitcoin and other cryptocurrencies as an online scam, which for a fact it isn’t- well at least not yet.
Cryptocurrencies, in general, have sparked different reactions all over the corporate world. Some investors have bought into the idea and consequently made significant profits from it. However, there are also high profile investors who have come out strongly against the whole idea. The ultimate truth is investing in crypto is just as investing in any other form of investment. It does come with risks and beyond the risks underlies somewhat huge profits.
So what really are the risks associated with investing in the crypto world? It is a very speculative investment. Despite the fact that most investments are speculative in nature, the level of control a cryptocurrency investor has is very minimal. I mean all you have to do is hope that bitcoin and all its other competitors do not come down as soon as you invest, or before you make profits out of the platform. Does this concept sound familiar to you? Oh yes, it does, Multilevel schemes, Ponzi schemes all have this kind of risk.
Another major risk involved in crypto investment is it appears to be one of the legit get rich quick investments. This is by far the most appealing thing to a majority of young investors. Most young people are interested in making quick money or in this case ridiculous profits within a short period of time. Some young people view investing as a mode of paying off their debts, and cryptocurrency investments sound quite appealing to them as an easy way to go about it.
The reality right now is that investing in cryptocurrency is a high-risk investment. This is always equated to high returns especially in the event that the risks do not actually catch up with you as an investor. Young people are facing even higher risks when investing in this platform due to their inexperience with investments. Their vulnerability to this risks are heightened, needless to say, the investment itself is already a high risk one.
Sadly, most traditional financial advisors are not in a position to give appropriate advice on cryptocurrencies. Most professionals feel challenged because it is a relatively new concept and is still very debatable. This makes it harder for parents, guardians and even professionals to educate the young generation sufficiently enough about investing in this field.