The year 2020 stood out as an outstanding achievement record year for cryptocurrency with the price of Bitcoin skyrocketing from $5,000 in March 2020 to an overhauling $60,000 in April. However, November witnessed the highest recorded growth in Bitcoin value up to $68,000, which dropped immediately within a month and has not been near around until yet. A Wealth Matrix operated through a secured blockchain technology without the intervention of centralized banks, offering privacy and anonymity to users. It highly eliminates the primary requirement of a bank. it provides you freedom to transact directly without any governing body. The transaction and trading charges are generally low, at least compared to foreign exchanges.
Cryptocurrency Investment Risks
However, just like the stock market, cryptocurrencies are incorporated with an extensive spectrum of risks as well, like highly volatile and swinging markets, unpredictable value changes, risk of hacks and scams, etc. Mt. Gox implosion case was an extreme instance of hacking and loss of approximately 850,000 bitcoins. Even the regulatory standards and taxation also differs worldwide. For example, China has recently banned cryptocurrency transactions, beyond its cryptocurrency which is monitored by centralized banks of China.
However, despite all these risk hurdles, people are constantly showing renewed interest to invest and operate in cryptocurrencies, even more, many experts even look into a bright future of cryptocurrency and say it could probably replace fiat currency someday. However, if you want to minimize the risks in cryptocurrency investment and yet stick with the trend and be a cryptocurrency investor, here are a few ways how you can crack it.
[1] Look for Crypto holdings In Investment Companies. The new wave of keen interest in cryptocurrency has taken in big companies like Microsoft, Tesla, Overstock and Starbucks, and many more. Many of these companies already hold substantial cryptocurrency holdings. Not only large-cap companies but even mid-cap and small-cap companies are increasing in the number who have cryptocurrency holdings. Investing in other companies that have the crypto holding would be a good option to invest your money in case there is a plan of avoiding risk.
However, understanding your profit range in such investments, understanding the amount of crypto holding of the company, and how that is profitable, is also important. According to Douglas Boneparth, the president of Bone Fide Wealth in New York City and a certified financial planner “When you’re thinking about investing in a company because they have crypto exposure, it runs the gamut from how direct or indirect you are in terms of that exposure.”
The balance sheet of a company can reveals a lot of facts about their relative holdings of cryptocurrency for example In June 2021, Tesla had a total holding of $1.31 billion in digital assets. And media reflected a lot of limelight on Tesla ever since its noticeable stake in cryptocurrency, and currently, Tesla’s crypto holdings stand out for approximately 2.4% of Tesla’s total assets.
[2] Invest Mindfully. Many a time there is a lot of hype and talk about any one cryptocurrency. People seem to fall prey to FOMO and start investing in crypto just because everyone seems to be interested in it. But the right way is to dig in for more information from authentic sources like white paper or company sites, and not rely on the hits and waves of social media when it comes to cryptocurrency investment.
[3] Diversify Your Investment Portfolio. Instead of stacking all your funds into one or two major cryptocurrencies, it is indeed smart to diversify your available fund among a few potential digital assets. This way, even if any one or two cryptocurrencies perform in a downtrend you can gain from your other holdings. You can also appoint automated bots to strategically implement your portfolio and maintain your investments.
Risk is an integral part of a stock exchange to financial investments, property investment to cryptocurrency. In short, there is no way to go forward without taking any risk. You perhaps cannot overlook risk factors in any investment form, therefore, seeking ways to minimize risk is rather better, like picking a secure and reliable exchange like crypto-wealthapp.com, diversifying your holdings, planning and picking a strategy suitable as per your investment pattern, and funds, to secure your losses and risk.
