You don't have to go too far across most mainstream news sites these days to see another story about how one cryptocurrency or another is growing in popularity. Today, more people than ever are viewing specific cryptocurrencies as viable investment opportunities and a good way to diversify their portfolios. But if you are new to this scene, there are some other things you should know about crypto before you decide to buy bitcoin or another popular option. Here are some important things to remember that can help you safeguard your investment and invest your money responsibly.
Cryptocurrency Is Not Regulated By Any Government
One of the reasons that cryptocurrency grew in popularity is because some people like the fact that it is not regulated by any one specific government. In fact, crypto has essentially no government regulation at all. This allows it to be a worldwide currency, and you can trade crypto with people around the world with ease.
But the other side of the coin means that there is no one to jump in and save you if you make a bad decision due to bad information. Because crypto is unregulated, you really need to research who you are buying your crypto from and make sure it's a reliable site. And if you hear about some brand-new cryptocurrency, understand that no one is going to help you if you jump in with both feet only to have the bottom drop out. There won't be a halt to trading like there is with some stock exchanges when there is a sudden plummet in price.
You'll Want a Reputable Digital Wallet to Protect Your Currency
In addition to purchasing your crypto from reliable sources, you will also want to make sure you lock in your investment with a crypto wallet. These wallets typically give you a special code or key that ensures that no one else can access your cryptocurrency. Some crypto wallets are more established than others, so take your time and find one that feels right for you.
Understand That Crypto Can Fluctuate Dramatically in Price and Be Mentally Prepared for the Roller Coaster
As mentioned above, crypto can plummet in price and that's true. But it can also soar up to the sky relatively quickly if the public suddenly gets behind it. In short, cryptocurrency is very volatile and you can expect the price to go up and down like a roller coaster on a regular basis. Being a long-term investor in cryptocurrency may require you to stomach a lot of ups and downs so just be mentally prepared for what's ahead.