Although cryptocurrencies are making a comeback, you should know a few things before buying. For starters, keep in mind that crypto prices have taken quite a beating these past few months. This is despite the impressive gains they showed earlier. Between mid-April and late July, Bitcoin prices were reduced by over 50 percent. Meanwhile, Ethereum prices have dropped by around 57 percent since peaking in May. Moreover, Dogecoin prices fell by almost 70 percent ever since they reached record highs.
Nevertheless, crypto prices came back up recently. Since July 21, Bitcoin saw gains of over 33 percent. In the same time, Ether prices surged by 28 percent, while Dogecoin saw an increase of 20 percent. Now that we’re seeing crypto prices move up, it seems like a good time to invest. But not so fast, here’s what you should know.
If you didn’t get a chance to cash in on the previous crypto rally, now may seem like a good time to start investing. After all, you don’t want to let this rebound get away. However, there isn’t a guarantee that crypto prices will reach sky-high again.
So before investing your money, consider why crypto seems like a good idea. If you intend to get rich in a single day, this can prove risky. But if you think that crypto has a bright future, you should consider investing, rebound, or no rebound.
In that case, your best bet is on choosing a long-term approach. Therefore, it’s only a good decision to invest if you’ll hold onto your crypto for at least a few years. It doesn’t matter if you buy crypto next week, next month, or half a year later. Think of it this way: suppose Bitcoin eventually turns out to be worth half a million dollars per token. Then, would it really matter if you bought it for $35,000 or $39,000 for a single token? Regardless, you’ll make a lot of money if it surges.
You’re probably wondering if crypto is a suitable investment for you. If you try avoiding risk, then probably not. After all, no one’s sure if it will end up succeeding. But if you’re still looking to take a chance, you can find ways to limit your risks.
For starters, you can ensure you have a diverse portfolio with plenty of solid stocks. This way, if things don’t turn out great with crypto, you can fall back on them. Secondly, only invest money into crypto if you can afford to lose it. If you’re funneling life savings to back crypto, it will end in disaster. On the contrary, investing a little so it doesn’t leave a mark on your finances will reduce risks.