Should You Start Investing in Cryptocurrency in 2022?

Should You Start Investing in Cryptocurrency in 2022?

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12/01/2022 by Koinal
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It is never too late to dive into the crypto universe! Check out this post to see if crypto is proper for you and should you invest in it in 2022!
Should You Start Investing in Cryptocurrency in 2022?

The popularity of cryptocurrency increases day by day. You must have heard many people talking about this virtual asset or read many financial newspapers and websites articles. And the word keeps spreading that you might make serious money off this asset if you make the right moves. So it is not surprising that all this hype makes you consider investing in cryptocurrency this year.

Before taking this step, let’s go through some key questions together:

· Do your research about the coins and be aware of the risks; make sure cryptocurrency fits your portfolio and your investment plan; make sure you have enough savings for the near future before taking risks in the crypto universe.

Do your research!

Yes, cryptocurrency is a virtual asset. However, the term includes thousands of coins that vary in values and business objectives. There are many more than popular coins in the crypto universe, such as bitcoin and ethereum. Do your research carefully, learn about your options, and do not quickly buy the idea that the most promoted ones are the best coins to invest in.

Understand the risks!

All investments involve a certain degree of risk. However, when it comes to cryptocurrency, you should be ready for an extreme level of volatility. The value of these virtual assets tends to fluctuate more uncontrollably than stock values, though stocks can also be somewhat volatile. Before adding crypto assets to your portfolio, make sure that you are ready and able to deal with this volatility.

Short-term or long-term?

The fact that cryptocurrency is quite a recent asset does not provide us with track records for decades-long investment, unlike the record for stock investments. This makes it difficult to estimate how it would go if you were to make a long-term investment in crypto assets. Cryptocurrency is only a bit older than ten years old and that is why it is still a bit speculative. This does not mean that you should not consider cryptocurrencies as a long-term investment; nevertheless, you should put some thought into this matter before making your decision.

Build your emergency fund!

We have already mentioned that crypto assets are volatile and speculative, and therefore it is risky to consider them as investments. This is not to discourage you but invite you to be prepared enough to deal with the potential risks that you will encounter on the road. Check your savings account and be sure that you have enough backup that will cover your living expenses for at least three months. If you don’t have enough savings but still want to invest in crypto, create an emergency fund!

Before surrendering to peer pressure, make sure you go into the ins and outs. Then, take your time, start slowly, so that you can fully enjoy this broad and promising universe!

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