It’s hard to ignore the headlines that Bitcoin and the other cryptocurrencies have garnered over the past five years, especially at the end of 2017. However, the first few months of 2018 have highlighted some of the potential problems. As such, investors new and old may wish to look at alternative markets.
Many will still want a small amount of cryptocurrency in their portfolios. But it’s probably best to avoid making those digital currencies the focus of your attention. Here’s why.
1. Volatility Makes It Impossible To Plan Ahead
Ultimately, there has to be an incentive for making those investments. Whether it’s saving for a deposit on a home or your child’s educational fees doesn’t matter. Cryptocurrencies are so volatile that you can never truly predict their future with any real authority. So, while they can potentially bring a huge ROI, it’s hard to enjoy those proceeds until you’ve cashed in your investment. While this is true for other commodities, it’s infinitely worse with Bitcoin et al.
2. There’s No Real Asset
Cryptocurrencies may hold a market value, but there isn’t a physical asset. The digital and decentralised currencies can, therefore, become worthless at any moment. Experts like Jordan Belfort (Wolf of Wall Street) have been very sceptical. They suggest that the bubble is already bursting and could lose all value at some stage. Whether that happens or not, there’s no doubt that this makes it a very risky area to trade in.
3. You May Need A Big Investment
It’s unlikely that you’ll be Bitcoin anytime soon. However, even Ethereum and other digital currencies can be very expensive. Conversely, the ones at the lower end of the scale may take years to show any real change – that’s if they ever do. That doesn’t mean you have to start trading in real estate. Investing in more tangible and easily researched markets such as SPI Futures can be very positive too. Better still, you can start with a lower risk, which can only be great news.
4. You Aren’t Helping Anyone
Generating a positive ROI will always be the primary goal of any investor. However, there’s no denying that you may have other visions too. This may include supporting charitable causes or providing affordable housing. Still, knowing that the investments are aiding society or supporting something close to your heart can feel as vital as the capital gains. Cryptocurrency isn’t going to satisfy this aspect, so do take it into account.
5. The Ship May Have Sailed
Cryptocurrency has been one of the most exciting things to enter the market in recent times. Many people have made significant sums of money from it too. However, it could be argued that the biggest boom that the industry will ever see has already passed. Timing is everything in this world, and those that left it too late may be better looking elsewhere. After all, there are plenty of ways to make a healthy ROI without touching cryptocurrency. Don’t be afraid to embrace the slow and steady slog.
