Updated: Aug 25, 2021
Cryptocurrencies have been getting alot of attention. The prices of Bitcoin and Ethereum and others have skyrocketed over the past year. The people who have been invested for a while have made considerable returns on their money. People may be asking: How high will it go? Should I buy some now?
Firstly I think cryptocurrencies and the underlying technology behind it being the blockchain is revolutionary. Blockchain technology is definitely going to change the world and how we interact digitally. At this point however I am uncertain how cryptocurrencies are going to be accepted and operate harmoniously in the world since they fall outside our current monetary system. They are not legal tender and are not regulated like other currencies. Time will tell and people can speculate.
Should I buy?
Firstly, I don't see it as an investment. You are merely converting your own currency into digital currency in the hope that someone will pay you more for it in the future. It's largely speculative and hugely volatile. It could very well pay off or it could not. Its a gamble at this point. Just tread carefully. Please!
If you do want to partake in this adventure, I would only put in what you are prepared or comfortable in losing. Before you even consider cryptocurrencies, I would strongly recommend you make sure you already have built up an emergency fund, paid off your high interest debt, are covering all your monthly expenses and are regularly contributing at least 15% of your net income to your retirement accounts. In other words, just make sure that your financial foundation is strong and you are carrying on with the basics.
Also bear in mind that many countries and jurisdictions are taxing cryptocurrencies. If you own or plan to own cryptocurrency please check with your tax consultant or tax authority as to how your crypto will be taxed going forward. Another important point to remember is there no regulation in the crypto world. Be mindful of the institution you are trusting to keep your crypto currency safe.
Best of luck, be careful and keep grounded.
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