Last updated on May 31st, 2023 at 07:40 am
Cryptocurrency has been known today as the most beneficial investment opportunity. Notwithstanding, not everybody is still aware of the opportunity, and also not everybody aware completely trust the new trend.
It is safe to say that this lack of trust is a result of the volatility of the market and also the degree of risk that is associated with it. You should be aware that the risk associated with cryptocurrency is complex. The price of a particular coin cannot be predicted or established simply by talking about it.
You must have to do your research, learn more about it the phenomenon, and have proper knowledge of the market before knowing if the price will rise or fall and deciding to invest in it.
To be a professional crypto trader, you require skill, some tools, and also must be enlightened about the crypto market and its volatility. We have listed some essential details about cryptocurrencies below, so you will be aware of what people think about them.
- Cryptocurrency is not always profitable
- The market volatility can be dangerous
- Fear Of Missing Out (FOMO) can sometimes help
- Cryptocurrency is used illegally
- More crypto investment might equal more risk
1. Cryptocurrency is not always profitable
Before investing in cryptocurrency, you might think that your investment will bring you positive returns, but that is not always the case. If you are a newbie, you might have entered the crypto market with enthusiasm and the hope of making higher profits.
But a fact you should understand is that the market will not always provide you with profits. The volatility of the market makes it such that investors are always met with profits and losses. So if you are thinking that you are entering the crypto space to make an endless profit, then you should think well because you might be mistaken.
2. The market volatility can be dangerous
Having understood the volatility of the market, it could be said to be very profitable to investors. However, daily traders are believed to be the most beneficial in the crypto market.
If you think the volatility will always be favorable to you, then you are wrong. This is because volatility comes with a very substantial amount of risks, and if you don’t know how to analyze it, then it is going to be a problem for you. If you don’t understand the volatility of the market and are not ready for it, then investing in cryptocurrency might be a very bad decision for you.
Related: Is Cryptocurrency Still Worth Buying?
3. Fear Of Missing Out (FOMO) can sometimes help
Many times we see on the internet or hear from some “crypto expert” saying that FOMO will ruin your investment and probably end your crypto journey. You should understand that the fear of missing out can make you take steps when the market is in complicated situations.
So, if you fear a particular situation in the crypto market, then you should probably think twice about it. Think very well and make your decision on the crypto market because things can change at any time.
4. Cryptocurrency is used illegally
If you think cryptocurrency isn’t used in illegal or illicit activities, then you are wrong. First, you should know that cryptocurrency transactions are not traceable with sophisticated means, therefore this day, it is used for illegal activities.
A few examples can be given, for example, cryptocurrency has been used for money laundering and also for funding some terror groups and also activities that targets the cyber space.
So, if you are a newbie, you should have this registered in your mind and understand this aspect.
5. More crypto investment might equal more risk
Its not always a right move and profitable making more and more investment in cryptocurrency. It might be believed that more and more investment will bring more benefits to the investor, but that is not always the case, it can also bring more losses.
You should be aware that the market can go sideways at any moment and also for a long time, so it is advised that you make a wise amount of investments in cryptocurrencies. Always follow what is called the “5% rule.” This rule advises that should only take risk of only 5% of your capital investment and you will be always safe in the space.
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