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Investing in Cryptocurrency: Expectations vs. Reality for Entrepreneurs

4 Mins read
  • Entrepreneurs can invest in cryptocurrencies to stabilize their investments, but they must temper their expectations.

When you are running a business, you need to make sure that your hard earned profits are invested properly. You need to make sure that you have a good retirement plan. However, you should also look at other alternative investments worth trying.

One of the best ways that investments that business owners can make is buying cryptocurrencies. The value of bitcoin increased from $0.06 on October 1, 2010 to $48,162.71 on October 1, 2021, according to this chart.

However, it is important to make sure that your expectations are realistic. You need to know how to invest in cryptocurrencies properly and maintain a diversified portfolio.

The Lowdown on Investing in Cryptocurrencies

Although the cryptocurrency market has been around since the tail-end of the 2000s, it’s only in recent years that it’s gained a massive following. And like many things that have only newly caught fire in the public consciousness, cryptocurrency has its own mystique about it. Much of what the ordinary person knows about crypto is hearsay, and this is often the kind of knowledge that they take with them when they make a decision to invest.

What’s it really like to be into cryptocurrency, and how do common expectations about crypto trading differ from its actual reality? To answer that, here’s a quick briefer on the myths and the realities of crypto. Although the outcome of your crypto trading journey really depends on factors like which coin you choose, these are the truths that most cryptocurrency investments have in common.

Expectation #1: Crypto Trading Will Always Be Rewarding

Perhaps the most common assumption that belies the true nature of cryptocurrency is that it is something of a magic bullet. But beware the snake oil salesmen who will advertise the crypto trading journey as one that will make you an instant millionaire. there are a lot of benefits of investing in cryptocurrency, but you have to be realistic.

In truth, the speculative nature of crypto trading makes it a high-risk and high-reward kind of game. There will definitely be moments where you could stand to lose a lot of money, and even the “bull runs” (or periods of high market interest and rising prices) won’t last forever. Only someone who is willing to take the risk and be levelheaded about the amount of money they’re investing should pursue crypto trading—else they get disheartened by a fairytale dream of what they think it will be.

Expectation #2: Crypto Trading is Unsafe by Nature

While it’s true that crypto investments involve risk—and that unfortunate incidents like theft and fraud happen in the crypto market—there’s also a lot of unreasonable fearmongering about how unsafe it is. Even new crypto investors can be confident that their activities are backed by sophisticated technological systems. These also tend to become better over time. The value of bitcoin is expected to be worth 100,000 this year.

Crypto traders can rest assured that there are many dependable and custom-built resources out there that can help them protect their hard-earned coins. For example, if you choose to trade in a privacy coin like Monero, you’ll be able to find a secure XMR wallet to house your assets.

Expectation #3: Coins Are the Only Expenses You Have to Account For

Most people who get into crypto know that it’ll be expensive, but their idea of “expensive” may only encompass the trading itself. In reality, other crypto-related fees can rack up, such as those for transacting within a certain system or for joining a mining pool. If you want to get serious about mining cryptocurrency, you will also have to spend on a mining rig and its energy consumption.

If you want to start investing in cryptocurrency, you will have to make room in your budget for these miscellaneous expenses. The sooner you prepare for this reality, the better your overall trading journey will be.

Expectation #4: It’s Only Wise to Invest in the Most Popular Coins

There’s no denying that popularity is an important factor in cryptocurrency trading. If there’s a large trading community backing a certain coin, that means that you have more traders to interact with. It may also mean that you’re guaranteed a well-developed system for trading and that more establishments support that coin as a form of payment. But even then, popularity is not the only indicator that a coin is worth trading.

In reality, cryptos other than Bitcoin (BTC) and Ethereum (ETH) have started to make an impact in the market. Investors can choose between a variety of coins, and these coins may offer them something different from the popular cryptos—for example, more exhaustive privacy features or an energy-efficient proof-of-stake system.

Expectation #5: It Will Be Hard to Keep Track of Cryptocurrency Trends

When investing, it’s always good to keep track of market trends and see how these affect the assets in your portfolio. You might already see the logic of doing this for real estate or stock investments, but assume that it will be difficult for crypto.

Thankfully, the world of crypto is no longer as obscure or mysterious as it was before. Now that crypto trading has become somewhat mainstream, it’s no longer hard to find resources that will improve your awareness and help you become a savvy trader. You can read free commentaries from experts online, and you can also use online charting tools to keep abreast of the market.

Conclusion: Temper Your Expectations and Trade Wisely

In summary, there’s value in learning as much as you can about the realities of cryptocurrency before you go into trading. Knowing that, you can do two things to bolster your chances of success in crypto: set reasonable expectations for what your journey will look like and trade with your eyes open.

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About author
Ryan Kh is a big data and analytic expert, marketing digital products on Amazon's Envato. He is not just passionate about latest buzz and tech stuff but in fact he's totally into it. Follow Ryan’s daily posts on Catalyst For Business.
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