Cryptocurrencies are considered to be the future of money transactions and maybe even the monetary system itself. The most successful digital currency today is, of course, Bitcoin. But aside from its prominent place in history, many are rushing to make a risky investment in this extremely volatile asset, neglecting serious concerns when it comes to investments into cryptocurrencies.
Many banks are indeed on the verge of accepting, using, and creating a cryptocurrency. And while we are probably still many years away from a complete transition to the world of crypto for the financial sector, the changes are coming. Some even think that cryptocurrency is a great investment opportunity for retirement. But while Bitcoin or other digital coins could potentially pay off, the best way to approach this investment, as well as any other, is with caution.
If nothing else, the story about the all-time high for Bitcoin should be a perfect warning of the potential risks. On December 17, 2017, Bitcoin surged dramatically, reaching a valuation of nearly $20,000 per coin. But days later, it was impossible to sell it for more than $14,626. Such a drop was untypical even for Bitcoin. However, less extreme fluctuations in this unpredictable market are happening all the time.
As the cryptocurrency markets continue to develop and evolve, they will become increasingly complex. So it is probably not a bad idea to have an investment advisor at your side to help you decide which coins are worth your attention and increase your odds of a profitable investment.
You should also remember about such serious risks as hacking and fraud. And since cryptocurrencies are hard to recover once they are lost or stolen, you should be especially cautious about that. At the same time, according to multiple reports, many people lose their money while exchanging digital coins. And there are two reasons for that – exchanges can be hacked or fake. So you should be very careful when you are entrusting your money someone on the internet, even if only for a swift transaction.
Banks and cryptocurrency
According to KPMG, central banks all over the world are in the final stages of launching their digital currencies for cross-border money transactions. The Bank of England, together with the European Central Bank, the Bank of Japan, the Bank of Canada, the Swiss National Bank, and others, are assessing the potential use of digital currencies and examining possible problems.
And its no wonder, since some crypto lenders report ten times bigger growth that traditional banks. Whether new technology will overthrow the current leaders of the industry, we are yet to see. But one thing is clear: with major banks, financial and tech giants backing the development of the crypto ecosystem, cryptocurrencies are here to stay.