In the last couple of years, the wave of cryptocurrency has been powerful, almost taking everyone by storm. Everywhere you turn there’s an advert for trading platforms. It seemed like cryptocurrency was the way to go, the new thing for everyone.
Many people found it strange though. The idea of buying intangible assets and trading them when the value rises did not sit well with a lot of people. But when you see people “cashing out” from buying and trading bitcoin and other digital assets, it tends to become more real as you can see tangible evidence to prove the authenticity of the industry.
So it became a thing and many delved into it headfirst. They thrived in their encrypted ‘Crypto world’ and have been doing quite well for themselves. Fast forward to today and the news isn’t so good for the crypto industry. The collapse of FTX, one of the fastest-growing crypto exchanges in the world has plummeted the value of cryptocurrency.
Prices of Bitcoin and Ether, the two most-held cryptocurrencies, are more than 20% lower over the past week. The price of the Solana digital coin has also been battered. The Tether stablecoin, which is supposed to be a safe place to park cash, recently broke its one-to-one peg to the US dollar. And crypto lending platform BlockFi said that it was pausing customer withdrawals.
Can the Crypto Industry Survive?
The industry is unpredictable. It could get worse. Investing experts have predicted that the market will be very volatile and unpredictable; therefore, a very risky investment. They advise against sinking much of your portfolio into the asset class for this very reason.
So What’s the Advice for Investors?
Risk is a part of life. Many have taken the risk of investing in cryptocurrency and have reaped great dividends. It is not a bad investment at all. However the foregoing is important in light of recent happenings: For those who invest in crypto for the long term using a buy-and-hold strategy, price swings are to be expected. Big dips are nothing to be overly worried about. Your crypto investments should not stand in the way of your other financial goals. You should only invest what you’re OK losing.