Is Cryptocurrency A Good Long-Term Investment?

You are probably reading this wondering whether it is still possible to get filthy rich by investing in cryptocurrency. I believe that with the right strategies, it is. Yet at the same time, you could lose all your money. Investing in Cryptocurrency is just as potentially risky as it is profitable. 

There is good reason to believe that Cryptocurrency is here to stay. I believe that we are yet to see its full potential. We should expect more and more crypto millionaires in the generations to come. We are yet to see the last strain of crypto millionaires. 

Safety is the biggest concern among most Crypto investors. Being that it is largely unregulated, it is not entirely safe. In fact, there is a common saying in the Crypto sphere that your safety is entirely your responsibility.  

Figure: Crypto Investment (Source Forbes)

Pros and cons of investing in Cryptocurrency

To establish whether or not Crypto investing is safe or not, we need to start by exploring both its pros and cons. Hopefully, you will then be able to reach a reasonable conclusion on your own. 

• Pros 

1. Consistent growth rate – It is impressive to see how Cryptocurrency and Blockchain are consistently growing stronger. Crypto is addressing some pressing issues in the financial world while Blockchain touches every industry out there. The number of applications and users continues to increase at an unimaginable rate.  
2. Company and corporate involvement – It is very encouraging to see financial giants like Square and PayPal join the Crypto bandwagon. It is also worth noting that many companies are beginning to gain direct exposure to the cryptocurrency sector. 
3. The increasing pace of adoption – More individuals, companies, and even governments are warming up to Cryptocurrencies and continuously adopting them. This high adoption rate is highly encouraging because it is a sign of a maturing industry. 

• Cons 

1. Crypto exchanges are highly susceptible to cyber-attacks – Compared to the stock exchanges, Crypto exchanges are highly vulnerable to hackers and other criminal activities. Such activities usually lead to tremendous losses among investors. 

It is also much easier difficult to store cryptocurrency than it is to store stocks. Storing them in your exchange wallet is frowned upon because it is not safe. investors, therefore, opt for cold storage in digital wallets. However, that has its challenges; for instance, if you lose your private keys you lose access to your digital coins. 

2. Your success is not guaranteed – There is no guaranteed success for your crypto investment. The competition between the thousands of existing cryptocurrencies is fierce and there is no way to ascertain that the project you invest in will succeed. 
3. The uncertain state of Crypto regulations – To this day, Cryptocurrencies are largely unregulated, no one knows what to expect. Regulators can come up with hostile policies against Crypto in the future. Some governments view Crypto as a threat while others view it as innovative technology. I guess we will have to keep our fingers crossed for now. 
4. It is still a relatively new idea that needs improvement – any products built on cutting-edge technology come with a host of intrinsic volatilities. The Blockchain technology on which Cryptocurrencies are based also increases the risk for investors. Much of the technology is still untested in its development stage. We are yet to fully understand all its real-world scenarios. 

Is Cryptocurrency a good long-term investment?

Many investors view Crypto as a long-term investment, claiming that Crypto will soon replace both fiat currency and gold. Like any other investment, there are ups and downs involved, profits and losses, you name it. Generally, the performance has been impressive with the likes of Bitcoin breaking all-time-high prices over and over again. 

Many Cryptocurrencies are launched with lofty objectives which may be achieved over long-time horizons; thus richly rewarding its earlier investors. 

If you believe in Blockchain technology, Cryptocurrency is a great long-term investment. Is cryptocurrency a Good Investment, before investing in Cryptocurrency for the long term be sure to understand what you’re investing in. Ensure that your coin of interest has a competitive advantage.