7 min read 

People invest in various niches these days. Investing in stocks and gold is not novel anymore and with time newer means of investment are being tried out. If you are keen on trying out newer investment options, cryptocurrency is a suitable option. This is basically a form of digital currency created through advanced encryption techniques called cryptography. What was earlier a purely academic concept became reality with inception of Bitcoin in 2009. Over the years, it has gained traction and now wealthy lots and renowned investors are also eyeing it and other emerging types of cryptocurrency for investment.

Should you invest in Cryptocurrency?

This is the thought millions of potential investors are pondering over! The main hurdle faced by the majority is lack of knowledge on nuances of cryptocurrency. It is not as simple as investing in mutual funds or gold, for that matter. However, the truth is that with time number of investors in this digital currency is growing, all over the world.

Why you may think of investing in cryptocurrency

Listed below are three major reasons to think of investing in Cryptocurency.

  • Bitcoin is growing massively- There is no denying Bitcoin remains the most popular type of Cryptocurency. It still has the majority of share in the nascent digital currency market. The wider reach and coverage has made it a viable form of investment. Despite the myth and skepticism regarding the long term sustainability of Bitcoin the faith of investors seem to be growing.
  • Ethereum is on the heels of Bitcoin- If you consider Bitcoin to be the gold among the forms of Cryptocurency, Ethereum takes the place of silver. Ethereum is a platform that lets users create decentralized applications and it is also a currency. Since this is more flexible in nature than Bitcoin, Ethereum has succeeded in attracting major players like Microsoft and Intel.
  • Conductive regulations may be introduced- It is actually shortage of regulation and anonymity of operation which leads to abuse scopes in There have been instances of criminal organizations resorting to alternative cryptocurrencies and those incidents actually tarnish the image of cryptocurrency sector. However, like a silver lining to a dark cloud, stricter regulations may be introduced. Digital currency advocates are actually lobbying for implementation of norms that thwart risks of theft and abuse of these currencies. It is quite possible that govt regulations and norms will be introduced for fair dealing of such new era digital currencies.

The hurdles and pitfalls ahead

There is no denying the majority of investors are still cautious about investing in unregulated currency like Bitcoin. Some are testing the waters by making small investments in these currencies. However, it makes sense to consult a veteran financial analyst to gain required knowledge on nuances of these currencies before you make the initial investment, however big or small. At least, you will be aware of the potential pitfalls of investing in a volatile sector. You have to understand the fact that any form of cryptocurrency lacks intrinsic value except for what a buyer wants to pay for it at a specific point of time. This makes it vulnerable to unpredictable and massive price swings. This in turns hikes the risk proposition from the investor’s perspective. These are definitely not your in your favor if you have a conservative approach to investment.

What the future looks like?

While no one can exactly predict what the future holds for Cryptocurency forms, the present looks quite upbeat. Despite the few incidents of theft and abuse that made headlines, mass interest in Bitcoin and other forms of cryptocurrencies is going up with time. In future, integration of cryptocurrency with mainstream currency forms cannot be ruled out.

The limitations that existing forms of cryptocurrencies have- like hacking, server crash affecting digital fortune- will be ironed out by advancements in technology. However, it remains to be seen how mainstream they can become. Their complex nature will ensure a majority of people staying away- even in the future.

To become intrinsic part of the prevalent financial system, cryptocurrenceis need to mature or evolve. There has to be a balance between maintaining anonymity and abiding to a set of regulations- to benefit the users in the long run. More provisions for consumer protection should be introduced while ruling out loopholes for money laundering and thefts.

Where it all leads to

Cryptocurrency is maturing with time and its popularity is also on the rise. However, as an investor it would be prudent to learn the nuances of those currencies well and invest after weighing all pros and cons.

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NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
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