What to consider before investing in cryptocurrency.
Cryptocurrency can be volatile, with large swings in value over short periods of time, which may give you pause if you’re risk averse. Keep in mind that anyone can launch a cryptocurrency, and how it’s regulated is in flux, so it’s vital to thoroughly vet any possible investments to avoid scams.
You may also find it helpful to consider why you want to invest in crypto. Are you looking to cash in on a trend, or do you have a thought-out strategy in mind? Feldman recommends, “Never invest in anything with the belief that you can’t lose. There is no such thing as an easy way to make a lot of money without risk. You should only invest in a cryptocurrency if you believe in its long term prospects and are willing to absorb large price swings.”
Another factor Feldman suggests investors consider is that, “while cryptocurrency might be a powerful long-term investment opportunity, it may be wise to use caution and be clear about your intentions and expectations before diving in. When investing, it’s critically important to take a long-term perspective. This is especially true for assets that can move rapidly up or down like crypto. When investing in highly volatile assets, it’s easy to make the mistake of emotionally driven decisions, such as buying when the price is rising in fear of missing out or selling out when prices go down. Typically these are not good investing strategies.”
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