There’s no doubt that significant returns can be made from investing in cryptocurrency.
In early 2016, one Bitcoin was worth around €300.
If you’d invested then and still had your asset today, you’d have seen its value soar to around €30,000.
That’s nearly 10,000% profit.
These sort of numbers are clearly not to be sniffed at. And while such astronomic rises are unlikely to happen again, playing the market sensibly can still result in noticeable profits. The question remains: Should you invest in crypto?
With the Nash personal finance app – powered by blockchain and crypto – buying and trading is easy.
Cryptocurrencies such as Bitcoin and Ethereum are digital assets run on a distributed public ledger called a “blockchain”. A blockchain is a huge digital record of all transactions made by its currency holders. It’s stored on multiple computers and no single party can go and make changes to the chain history.
Cryptocurrencies are not tangible. You basically own a digital key that allows you to move a unit of currency from peer to peer without the involvement of a third party, like a bank.
This means you can transfer assets without having to pay high fees and enduring long confirmation times.
Most cryptocurrencies are also finite.
Bitcoin has a fixed maximum supply. Because a central bank cannot simply print more, Bitcoin is not subject to inflation in the same way that national currencies are.
Investing in anything exposes your money to risks and rewards – and the same is true with crypto.
However, because the cryptocurrency market has a reputation for volatility, investing can mean bigger risks and bigger rewards. You should always factor this in when considering making an investment.
• It’s not advisable to invest your life savings into crypto.
• You should never invest more money than you can afford to lose.
• If you want to make money, you should always look at crypto investment as part of a long-term strategy, as you would with traditional investments. Investing big and expecting short-term gains can be a dangerous tactic.
The short answer here is: yes.
Experienced traditional investors – like banks, hedge funds and pension schemes – all have a vested interest in the crypto market.
In fact, in 2021 JP Morgan Chase – a global leader in financial services – advised finance professionals to diversify their portfolio by putting 1% of their investments into Bitcoin.
The advice wasn’t intended for low-level private investors, but the message is quite clear: Bitcoin is an asset you can rely on.
Why Bitcoin, though, and not crypto in general? Because not only is Bitcoin the original cryptocurrency, it’s incredibly reliable: the Bitcoin blockchain has never been successfully attacked and it is the most easily accessible coin, being traded on hundreds of exchanges.
When sophisticated investors want to diversify into crypto, they usually choose Bitcoin.
You can instantly buy and sell Bitcoin, NEO, Avalanche and other popular coins using the Nash app.
While many crypto exchanges impose high fees and take custody of your funds, we charge just 1% – and you control your assets.
At the time of writing, inflation is rising and there is a lot of understandable talk about what to invest in when this happens.
Cryptocurrency is certainly an option.
First of all, it’s important to note that there will only ever be 21 million Bitcoins created. It’s written in the underlying code.
As such, some experts have suggested that Bitcoin, rather than being an inflationary asset like pounds, euros or dollars, is deflationary and should increase in value over time.
Which makes sense, right?
Investing directly in crypto during an inflation rise is never risk-free.
To lessen the risk you might want to contemplate crypto-powered savings rather than crypto investments. You can read more about the difference here.
It’s also very simple to do this with Nash.
Crypto savings generate interest in a similar way to traditional banks, earning you interest by lending your funds out. The main difference is that with crypto there are no central banks setting the lending and borrowing rates or taking large cuts of the profit, so rates can often be higher.
And who doesn’t want that?