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Although cryptocurrencies are considered a risky investment, they can still provide a good return if you are willing to take the high risk similar to betting on TonyBet Canada.
Is it a good idea to invest in cryptocurrency?
Before you start investing, it is important to research the market and its various aspects in depth. This will allow you to make informed decisions regarding the asset.
What are the risks of investing in cryptocurrency?
Several governments and financial regulators have warned investors about the risks associated with buying and selling cryptocurrencies. When an investment is presented in various ways, such as through celebrity endorsements or in headlines, investors tend to pile in without any thought about the potential risks.
Here are several risks.
1. Volatility
Extreme volatility is a crucial factor of cryptocurrency. While you are able to make high income, simultaneously you could forfeit everything.
2. Scams
In November 2021, the UK’s largest bank, Santander UK, reported that it had received about £1 million worth of cryptocurrency scams. One of the most common types of fraud is when criminals steal money from their victims by hacking into their computer.
3. Fake promises of high returns
Despite the various warnings, some companies still claim that there are many investors taking advantage from cryptocurrencies. This is not always the case and even can be, as there are risks involved.
4. No compensation scheme
Unlike bank deposits in the UK, cryptocurrencies do not usually have a compensation scheme. In the case of a cryptocurrency exchange going bust, investors would not be able to get their money back. Also, if you lose your password, you could end up with nothing as there is nobody to aid you to get it back.
Is cryptocurrency a good long-term investment?
According to some of the most prominent investors, such as pension funds and banks are now taking advantage of the surging popularity of cryptocurrencies. In February 2021, for instance, investment bank JP Morgan Chase noted that it could allow its clients to diversify their portfolios by putting 1% of their assets into bitcoin.
In particular, investing in cryptocurrencies that are not well-known or supported is not an ideal choice.
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