Cryptocurrencies have been all the rage lately. Everyone is talking about Bitcoin, Ethereum, and Litecoin. Some people invest in them, thinking they will make a fortune. However, many experts believe that cryptocurrencies are not a good investment. Still, you can make a good outcome if you know how to trade using the Immediate edge. Unfortunately, despite crypto’s popularity, it’s not a good investment option for someone serious about investing their money for a better future. Here is why crypto is not a good investment.

Lack of Intrinsic Value

One of the biggest problems with cryptocurrency is that it doesn’t have any intrinsic value. This means it’s not backed by anything tangible, such as gold or silver. Cryptocurrency is simply a digital asset that can be used to purchase goods and services. However, its value is based solely on supply and demand. If there’s no demand for it, then its value will decrease. The value of a cryptocurrency can also be affected by external factors, such as negative news.

For example, if there’s a hack on an exchange or a major country announces that it will ban cryptocurrencies, the value of all cryptocurrencies will likely drop.

Volatility

Another reason why crypto is not a good investment is that it’s highly volatile. Not only will it go up and down in value daily, but its value can also change drastically over the course of a few months. This makes it very difficult to predict what will happen with cryptocurrency in the future. For example, Bitcoin started off in 2017, being worth around $1000 per coin. By December, it was worth close to $20000 per coin. However, in 2018, the price of Bitcoin crashed, and it’s now worth around $6000 per coin. So, if you had invested $1000 in Bitcoin in 2017, you would have made a lot of money. But if you had invested in 2018, you would have lost a lot of money.

Pump and Dump Schemes

Another reason to be wary of investing in cryptocurrency is the pump and dump schemes common in the market. These schemes involve people buying up a lot of a particular cryptocurrency, artificially inflating its price, and then selling it off once they’ve made a profit. It often leads to the price of the currency crashing soon after. Pump and dump schemes are illegal in many other markets, but they’re unfortunately common in cryptocurrency.

Lack of Regulation

If you think that investment like cryptocurrency is risky, then you’re not alone. Many financial experts believe that cryptocurrency is too risky to invest in. One of the reasons for this is that it’s not regulated by any government or financial institution. This means there’s no one to protect you if something goes wrong. For example, if you buy a cryptocurrency and the price crashes soon after, you’re not going to be able to get your money back.

In contrast, if you invest in stocks or bonds and the price goes down, you can always sell them and get your money back. So, what’s the bottom line? Cryptocurrency is risky, and you should only invest in it if you’re prepared to lose all of your money. If you’re unsure whether or not you should invest, it’s best to consult with a financial advisor. Not only that, but you …