If you look out, many investment options are available for anyone nowadays. Every opportunity has its pros and cons. The one market that has been creating all the buzz nowadays is cryptocurrency. You must have heard about this market. With all the massive gains it has offered in recent years, people are still sceptical about the market. In this post, we are going to look at the reasons behind that:
- Value-based on Speculation- With all the other currencies, the cryptocurrency value is based on scepticism. The entire currency exists in digital form, and you cannot get that money in physical form. Despite all the gains, there is a strong sentiment among investors that cryptocurrency is exceptionally volatile and no one can predict its movements. So even if you are the most intelligent guy in the room, it is simply impossible to predict the direction of the cryptocurrency market.
- Not backed by anything- The dollar is the world’s de facto currency. Its value is backed by tangible goods such as gold. The cryptocurrency value is supported by faith, not by tangible assets or even another currency for valuation purposes. For many ace investors, it is like trading a bunch of ones and zeros. The risk involved in cryptocurrency is similar to other investments.
- Hard to Understand- The other reason many people are sceptical about cryptocurrency is the concept behind the market. It is rather relatively easy to understand. It is something that can be used as an alternative form of payment online. It gives the user the benefit of making payments anonymous by not disclosing personal information stored on servers. Cryptocurrency requires a lot of time and effort, and many of us don’t have the time or knowledge to learn how digital currency works.
- Cryptocurrency is Volatile- Cryptocurrency is one currency whose value fluctuates more than anything. The volatility is one reason people don’t invest in such markets. Still, if you ask, individuals who have tried their hands at cryptocurrency are often big fans because it allows for a lot more freedom and offers enormous gains in the short run. Cryptocurrency has the potential to be equally great, but for that, people have to put their faith and have to embrace the opportunity for the economic growth it offers.
- Legal Status is again one of the most important factors to consider. Many countries have recognised these currencies or have made laws to regulate these currencies. Despite all the positive news, many people still believe that cryptocurrency is not legal and can be easily scammed online while investing in them. Other than that, many countries are against the concept that raises uncertainty in the minds of the majority of the population.
- The portrayal by Media- Mainstream media has left no stone unturned to paint a derogatory image of cryptocurrencies. Major news channels and print media have criticised the digital currencies that have spooked many potential investors. Undoubtedly, cryptocurrencies are on fire now, helping investors generate vast amounts of wealth, but many are not sure about the technology.
In recent years SMSF Crypto Australia has generated a lot of wealth and has even beaten the market estimates. Proper knowledge and tool can be a lucrative investment strategy immune to inflation and recession.
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Disclaimer- This content should not be considered financial advice and is for educational or informational purposes only.