Cryptocurrency is a digital form of money that allows you to pay for stuff electronically. Crypto currencies such as Bitcoin, Litecoin, and Dogecoin have now made their way around to Generation Z.
Cryptocurrency is another form of investment that many people partake in. Bitcoin is a famous example from 2009 has helped many people book hotel rooms on Expedia, shop for furniture on overstock, and buy Xbox games according to CNN Money.
But with all the cryptocurrencies gaining new interest after years of volatility,is it really worth the investment?
Just like any investment there is a high risk. The value could plummet leaving you broke, scams can rob you blind, and because of the lack of regulations there is a high possibility of price volatility and manipulation.
“Crypto regulations are complex, disorganized, and haphazard. One area of particular concern for investors is tax treatment. A lack of regulation or what some term as regulatory greyness means some investors are scared off investing because they don’t have a clear understanding of what tax obligations require consideration or what records must be kept,” said Anthony Black, editor of Blockchain, a cryptocurrency exchange explorer service that supports all cryptocurrencies.
I personally never took the risk of investing my own money into cryptocurrencies, because of the high risks that are readily available. I do believe that investing is important, but you need to read into what you’re investing in.
My friends are all about cryptocurrencies; specifically Bitcoin and Dogecoin. They go on and on about how it is on the rise, how they receive money, and mainly how everyone is doing it.
What they failed to do is understanding what they are truly investing in, and if they are making the right decisions.
According to ABC everyday, an online news website; bitcoin is not a good asset, because “It doesn’t produce earnings or cash flow like a business or rental property,” not only that, but paying interest could bleed you dry.
When paying interest to cryptocurrencies it introduces you to counterparty risk, “if your company lending your Bitcoin goes bust, you can end up losing money.”
According to Investopedia, the transactions investors make through cryptocurrencies, “makes them well-suited for a host of illegal activities, such as money laundering, and tax evasion,” but Bitcoin for example is one of the few poor choices that is protected from conducting illegal business, because of the forensic analysis that blockchain has helped authorities arrest criminals.
I don’t believe i’ll ever invest in cryptocurrency, because of all the high risks that are still present.