Avoid These Risky Investment Ideas (6 of 10)

Bitcoin/Cryptocurrency: What Traps People

Another investment that has garnered a lot of attention in recent years is bitcoin and various cryptocurrencies. Touted as the tool that’ll replace cash and our entire financial system, many people have placed a massive amount of trust and faith behind these coins. The fact that transactions are anonymous also swings in their favour too.

But that’s really the positive thing about cryptocurrency.

When you see it as an investment, you see that cryptos have small track records, are they are not all that liquid, and fluctuate wildly in price. A good example of this is looking at Bitcoin. It’s the flagship coin, and in December 2017, it hit an all time high of one coin being worth $13,407. Fast forward three months later, and the price tanked to $6,700, over half of what it was worth before. It’s obviously recovered a bit, but it’s far from stable.

The Dangers Of Cryptocurrency

Absolutely, people have been able to invest in crypto and walk away with a lot of cash. About what’s brought people into a fervour to invest in the first place have talked multiple stories of people making millions from this.

But why is there such a divide, and why it’s better to avoid investing in crypto is the industry itself. Because there is a level of animosity to this, it’s hard to tell who you are investing in and where your money is going. This is perfect ground for hackers and scammers to scam people of their hard earned coins and real money.

Overall, the market isn’t transparent and exchanges are prone to hacking, failures, high profile thefts, and various scandals. As such, you see government patching things up by classifying them and regulating them. On top of that, banks are generally unwilling to accept Bitcoins or any other cryptocurrency transactions out of fear of being accused of illicit activity.