Everyone is talking about cryptocurrency right now but no one is willing to expose the down sides of this highly-speculative market.
Here are five aspects you should be aware of before you begin your journey in the crypto world and risk your assets.
5) High commissions
The first thing you should expect before investing in crypto is not a big return but big commissions. No one really touches this subject but it’s real, it’s out there and it’s a huge problem.
On Bitcoin you end up paying a 35% fee for a normal speed transfer while hoping that the miners will pick it up and deliver it to your destination ID. This doesn’t happen all the time so you end up waiting hours or even days before you get an update on your coins. High commissions are real and they’re here to stay.
4) Slow trades
Now that the mainstream media talks about crypto on a daily basis, pretty much everyone decided to jump on board hoping for a get-rich-quick opportunity.
This is impacting the community heavily with most website not being able to process all transfers or even register any new accounts. That means you’ll pretty much be stuck with your coins on an exchange or stuck with your money in your bank account while trading websites refuse to deal with you.
Be persistent and arm yourself with some patience if you’re looking to make a crypto purchase. It will take a long time until the system improves.
Yes, panic. Expect a lot of panic and a lot of misinformation in the crypto world. Any rumor can impact the coin price in a good or a bad way so before checking the price charts 20 times a day remember that cryptocoins don’t function the same as Apple or Facebook shares.
You can lose half of your value within minutes of investing in a coin or double the money in less than one week. Give it some time after making the purchase, take a deep breath and convince yourself that you’re happy with the profit before selling.
2) To go rich
The best case scenario after investing in cryptocurrency and holding it for a while. After you find out that your investment is now up 1000% or whatever, you start celebrating and calling everyone you know to tell them that you’re now rich.
Then, you soon find out that you have to transfer your currency to an exchange market, sell it for Bitcoins, and then find a bank that’s willing to take huge lumps of money without asking too many questions. Also, you find out that there’s a HUGE chance that you’ll lose all your coins after they leave your wallet – assuming that you reached this stage and your wallet was not cracked or your Android, Windows, Mac, or iOS device was not damaged during the holdup.
Then you have to face the panic, the slow trades, and the high commissions to realize that your coin was actually meant to use it as it is, not to exchange it into FIAT.
1) To go broke
Yes, there’s also the opportunity of going broke with cryptocurrency, just like when you accept any other financial risk. This usually happens when overexcited people buy high and sell low because of the rumors. And, of course, when people are betting capital they cannot afford to lose hoping to encounter the number 2 situation on our list but instead they face number 3, 4, and 5.