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    Are cryptocurrency a good investment?

    This is a question that’s often asked about cryptocurrency. And it is a good question because everyone invests in order to make money. No one would invest in something that doesn’t make money.

    At the same time, this is a difficult question to answer because cryptocurrencies are a new form of investment. And because it is new, it is still very speculative and somewhat risky. But, there is a lot of money to be made from them, as you might have heard. The fact that they are new could be a good thing. When something is new and many people don’t know about it, and it is a good project, getting in early can be very rewarding. 

    With that said, there are a few things that can be done to ensure a sound understanding before putting money into a cryptocurrency project.

    Understand the project

    The oldest rule of investing is to know what you are investing in. You wouldn’t put your money in just any project, right? Start by looking into the project. You should be able to answer a few questions about the project: What is the cryptocurrency for? Who is behind the project and the team? What does the project do or intend to do? Is it possible? Is there a market for it? 

    If these questions are easily answered and clear on their website or by a simple Google search, then it is very possible that it might be a good investment. But perhaps the most important of those questions comes down to basic business: is there a market for it?

    Go in as a long term investment

    It’s a new area of investment, and as such, it will take time to mature. There are projects like Polkadot, Fantom, Solana, and many more that are a good example of long term investments. They are transparent, have a clear mission of what they want to accomplish, and are doing it.

    Investing in cryptocurrency for a short time period and hoping for big gains is not a wise idea. If the project fails, all the money could be lost. That’s why it’s important to understand and love what a project is about. Of course, there are stories like that of Dodge Coin and others that can make someone a lot of money for a minimal investment, but that is if one gets in at the right time.

    But that’s no better than market timing, which is nearly impossible. You can rest easy knowing what problem a cryptocurrency is trying to solve because then you know you are in it for the long run and, in the short term, you wouldn’t worry so much about the price movement. If you are investing for the long term, then the answer to the question is very simple.

    Are cryptocurrency a good investment?

    Prepare for the risk

    It’s not new news that people lose money on cryptocurrency investments. But it is also no news that people make a lot of money investing in cryptocurrency. The difference between those that make money and those that lose is how prepared they are for the risk. Never invest money that you cannot afford to lose. Make sure it’s money you don’t need immediately or in the short term.

    Although they can swing double, triple, or even thousands in percentage in a short time, it is also good to think about the alternative; they could fail as well, and the investment amount could be lost. So striking a balance is good. A good way to strike that balance is by putting in only the money that is not needed in the short term, understanding the project and getting in early. Buying the dip is also a good way to get in when the price is low.

    So, are cryptocurrency a good investment

    The short answer is yes. Given the price movements and the many people who have made millions, it is a good investment. But having the right mindset and understanding what you are getting into is the best way forward. Since cryptocurrency are largely unregulated, investors run the risk of losing a great amount without recourse. That is why it is even more important to do the research necessary and have a full understanding of the crypto environment before putting money into it.

    Let's build wealth, together!

    Do you want to learn strategies to grow your money? Passive income is the best way to build wealth by making your money work harder than you. I am doing it and I want to share my ideas with you. Let's build wealth together, enter your email below.

    Tate Nanje is an Author and blogger who has been traveling the world since 2009. He teaches English, Business, and Crypto investing. My books on Amazon


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