Is to invest in the learning and understanding of the technology
If you are in tuned with the technology or finance worlds, you most definitely would have heard about blockchain technology and cryptocurrencies. They are the biggest deal of 2017 that turned random teenagers and your average joe into millionaires, or so says the media.
On the other hand, cryptocurrencies are also the biggest ponzi schemes and the easiest way to lose your money. Governments are wary of it, banks are unsure of it, and so you should steer away from cryptocurrency.
Despite the mixed views towards cryptocurrency, it has definitely been a head-turner and more people are now aware about it. Even so, a recent survey in August 2018 found that about half of Americans are unfamiliar with Bitcoin, Ethereum, or Litecoin (Source).
Are cryptocurrencies still worth investing then?
Complexity Of Cryptocurrencies
One of the main reasons people are staying away from cryptocurrencies is because they do not understand what exactly it is.
So it is digital money that is not government issued or controlled? Miners use their computers to earn new coins? Coins can duplicate (fork) into new coins that easily? How do you even buy a fraction of a coin? How do you put a price on one Bitcoin?
Not only is it incomprehensible, it can be troublesome to get hold of the coins, what more about storing them securely. And if we were to look at the price charts of cryptocurrencies in 2018, the naysayers will start telling you “I told you so”.
An Elusive Asset
Bitcoin was started by a group of ‘cyperphunks’ and remained a close-circle thing. Even when Mt Gox increased accessbility to these coins, most people did not get it or even heard about it. Likewise, despite the global crypto mania in 2017, more people are learning about it but most people still choose to stay out of the fray.
The extended bear market of 2018 has since weeded a lot of curious and clueless investors. Amongst those that are still invested in cryptocurrencies, they are either those who really get what decentralisation means, and gamblers who cannot care less about their losses anymore. In the former group, you will get the true crypto enthusiasts, the manipulators, and proper institutions and businesses attempting to incorporate the technology.
And there is no telling when the bear market will end. Well you can use technical charts but that is besides the point. There is always the possibility that this bear market drags on or dips further.
To Invest Or Not, That Is The Question
With no end (of the bear market) in sight, perhaps a financial investment in cryptocurrencies now may not be your best option.
Of course, I will tell you that current prices are great for an entry. But if the market goes down, you will tell me that I am wrong. And if the market goes up, you will not know when to take profits.
Hence, my best advice for someone sitting on the fence would be to invest in the education of blockchain, distributed ledgers and cryptocurrencies. Put in the time and effort to learn what it is and how it can affect our lives.
If there was anything I learnt about the Internet and social media, it was first experimented and adopted by the millennials, by coincidence and because of their savviness. By the time most people understood and use it in their daily lives, it has become boring and just a norm for the early adopters. Similarly, cryptocurrencies are the toys and experiments for the savvy people today, and these people are not necessarily just millennials.
When cryptocurrency does become mainstream, it will not cost you anymore to use it. $10 worth of Bitcoin will only get you $10 worth of product or service, be it now or in the future. You might miss out on the potential monetary gains if you are sitting on the bylines today but you are also saving yourself a lot of emotional trauma and unneeded risks.
There is no need to FOMO (Fear Of Missing Out) and blindly jump into crypto. Cryptocurrencies will become the new asset class, eventually.
If you want to invest in them, first invest the time and effort to learn about it.