Should You Invest in Cryptocurrencies?

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2017 has been the most explosive year in cryptocurrency history. Not only did it give birth to a lot of blockchain projects but it has also given many investors the greatest return on investment they ever made. During the year, there has been a spurt of new investors flooding the market throwing money at any project they could get their hands on, in fear of missing out. However, with the cryptocurrency market still being young and being historically volatile, there is still no absolute answer on the wisdom of investing in cryptocurrency. However, after observing investors behaviour during the year, it seems that adopting the “Hodl” mentality has been the most rewarding attitude towards the market.

The cryptocurrency market has been extremely volatile since it’s inception. As an investor trying to apply fundamentals before investing in these digital assets would be a bad approach. A huge part of the market is highly speculative and is very sensitive to investors sentiment. The best way to approach investing in something new such as cryptocurrency and avoid deception is to thoroughly research and only invest money that you are willing to lose.

Then comes the technical side, where most of the technology being developed is still not understood by the masses. There are currently many projects using the confusion that stems from the technology as an opportunity to raise ridiculously huge amounts of money without writing a single line of code. This only adds to the fact that doing due diligence before investing in any project is crucial.

On a positive note, there are also plenty of projects that deliver on their promises and some of them are already being used in the real world as better alternatives to products and services we already have.  As shown in the chart below, picking real projects and being a patient investor is very rewarding.

 

What is the status of cryptocurrency in 2018?

The first half of the year has seen a continuous downtrend on cryptocurrency sentiment despite projects delivering on technology and forming real-world partnerships with established institutions. At the current stage, investors are still waiting for market recovery which can happen at any given time.

Deciding to invest in cryptocurrency can bring you significant profits and in some cases, they will surpass your expectations. However, it is important to stay realistic and understand that not all investments will be successes. In other words, the playground is very rewarding for smart investors that do their due diligence.

As a famous Chinese proverb goes: “The best time to plant a tree was 20 years ago. The second best time is now.

 

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