The cryptocurrency market is exploding. There are currently thousands of cryptocurrencies available to invest in. And the top 100 cryptocurrencies have at least $1 billion valuations each, with Bitcoin holding a valuation over $1 trillion.
Despite these numbers, many people still think that cryptocurrency investing is a scam, a waste of money, or something worse. There are many reasons why people still aren’t investing in crypto.
Only 13% of Americans have actively traded crypto in the last year, in large part, because they still don’t understand what it is and why it’s important. But that 13% are escaping inflation and seeing massive gains on their investments in relatively short timeframes.
If you want to see your money start growing, you need to learn what cryptocurrency is, and what isn’t. Keep reading below to expose the top myths surrounding crypto so that you can start investing with a clear head.
Myth #1: Cryptocurrency Is a Fad
Bitcoin was the first cryptocurrency created and released to the public. When it launched in 2009, only the cypherpunks and technophiles held it.
For a few years, Bitcoin was a fad. No one actually knew what it was, but word spread that this new digital currency was going to be worth a lot someday. So a small group of people start stocking up on it, and the general public ignored it, blissfully unaware.
But today, Bitcoin is impossible to ignore. With a valuation of over $1 trillion, this is now a major asset class. Over 100 million individuals own some Bitcoin.
Major corporations are investing in it. Tesla has millions of dollars of Bitcoin on its balance sheet.
Governments are investing in it. El Salvador recently established Bitcoin as legal tender in the country, and other nations are likely to follow suit.
And Bitcoin is just one of many important, highly valued cryptocurrencies available. This asset class is becoming more dominant. If you are interested in smart investing, it’s time to stop ignoring crypto and start adding some to your portfolio.
Myth #2: Cryptocurrency Investing Is Gambling
Many people treat investing like gambling. Gambling is the process of putting money into something, hoping that you generate a profit. But when it comes to gambling, you have no say in the output of a result.
Gambling is betting on a slot machine. There is no research you can do to figure out which machine to use, when to use it, or how often to use it. You can’t increase your chances of a profit.
Investing in cryptocurrency is not gambling. You can do tons of research, figure out which coins serve a true function, and which are likely to increase in value. You can do a lot to skew the odds of profit in your favor.
All investing is risky and can be considered gambling. But anything that allows you to mitigate risk through research is not considered gambling.
Myth #3: Crypto Is Risky
Crypto is risky. But the biggest risk is not investing in it at all. The opportunity cost is greater than the potential for loss.
Crypto isn’t going anywhere. Because it’s decentralized, there are no central authorities, such as a government or bank, that can shut it down, ban it, devalue it, or make it go away.
The only way that cryptocurrency can go away is if the internet goes away. And by that time, the world will end so it doesn’t matter anyway.
It’s also unlikely that major coins will lose all of their value. Value is driven by demand. In order for coins to drop, all current investors need to collectively decide a coin is worthless and dump it onto the market.
But for major coins like Bitcoin, Ethereum, Cardano, Solana, and others, that isn’t going to happen.
Crypto is risky, in that it is volatile. Price fluctuations of more than 20% in a day aren’t uncommon. But reputable coins bounce back and keep pushing upwards.
Myth #4: Crypto Doesn’t Have Real Value
This is one of the major myths that plague the crypto market. Those who are opposed to crypto say that it has no inherent value.
They say it’s a digital currency that doesn’t represent anything. It’s just a couple of lines of code, and the only reason the price increases is due to hype.
But that’s not the case. First off, let’s talk about the dollar. If you want to discuss something with no inherent value, we need to start there.
The US dollar currently represents nothing. It was once backed by gold in the bank. Dollars represented gold, which was a real, physical asset with real value, due to high demand and limited availability.
But the dollar was removed from the gold standard. Now, the dollar has no value in and of itself, because it’s just a piece of paper. The only reason it has value is that the government, and the central banks, say that it has value.
But it doesn’t have much value, since the government keeps printing money, devaluing the currency daily.
Cryptocurrency has value in many different ways. Some cryptocurrencies provide valuable functionality. For example, Solana has value due to its blockchain network.
The open-source, censorship-resistant blockchain technology provided by Solana provides a robust, efficient platform for building decentralized applications (dApps).
It’s a network that can handle thousands of transactions every second, unlike many other slower cryptocurrencies. So Solana, and its underlying technology, is creating tons of value, and the value of the Solana coin reflects this.
Myth #5: It’s Too Late to Start Investing
In 2021, if you haven’t already started investing in cryptocurrency, then you missed out on amazing opportunities. Investing just a few thousand dollars in the right coins a year or two ago could mean that you could retire today.
But just because you’ve missed out on the early gains doesn’t mean it’s too late. Cryptocurrency is still in its infancy. This is still the beginning. The big coins are going to continue growing.
It’s not too late to get in on the action. The sooner you do, the sooner you get to ride the wave.
Myth #6: You Need a Lot of Capital
When it comes to many other investment vehicles, like stock market brokerages, index funds, and so forth, there are usually minimum investment requirements.
Sometimes you have to invest a minimum of $1,000, or $3,000, or even $10,000. And you have to buy full shares of the asset you want to obtain.
But with cryptocurrency, you can buy as little as you want. You can start off by investing just $10 if you want. And you never have to buy an entire coin. You can buy fractions of any particular asset.
So even though Bitcoin may have a price of $60,000, you can buy $10 worth.
Myth #7: Crypto Is Easy to Steal
You may be hesitant to buy crypto thanks to the scams and hacks and lost funds that hit the news. And yes, it’s true that hackers are targeting crypto. But they target anything that has money.
But most of the time when people lose their crypto, it’s their own fault. When you buy crypto on an exchange, you shouldn’t leave it there. You can, but exchanges are the main targets for hackers.
Hackers know that most of the crypto is sitting on an exchange. So if they can steal someone’s login information, which is relatively easy, they can get in and cipher those funds.
Crypto should instead be stored on a personal wallet. A wallet is a software application that stores crypto in a more secure way. You can download a wallet to your phone or computer, so your funds are far less accessible.
For maximum security, you can buy a hardware wallet. These are physical storage devices that store your crypto offline, in cold storage, away from an internet connection. Theft by hacking is impossible.
Myth #8: Crypto Is Full of Scams
Cryptocurrency is decentralized. It’s an open-source community, which adds to its scalability, transparency, and innovation.
For example, anyone can create and launch their own cryptocurrency. You can just copy the code that powers Bitcoin, Ethereum, or any other cryptocurrency, make a few changes, and launch your own coin.
As a result, there are thousands of cryptocurrencies that are created as a way to make a quick buck. These coins don’t represent anything of value. Pardon my French, but these coins are referred to in the crypto world as shitcoins.
It’s easy to spot one of these coins, and even easier to avoid them entirely. If only a few wallets hold the coin, it’s likely a scam. If there is less than a few million invested in a coin, it’s likely a scam.
If everyone on Reddit is telling you to buy a coin, it’s likely a scam.
So yes, crypto is full of scams. But if you just stick to reputable coins that exist to serve a purpose and have lots of investors and a large market capitalization, you can avoid 99% of scams out there.
Myth #9: Crypto Is Hard to Purchase
Many people are interested in buying crypto, as they are starting to realize that it’s here to stay. But they just don’t know how to do it.
They think they have to set up a complicated investment account or go on the dark web in order to buy it. But today, purchasing crypto is easier and safer than ever before.
To make it fast and simple, you can find a Bitcoin ATM near your home, drive over, deposit cash, and own some Bitcoin. Easy as that. Just visit bytefederal.com to find the nearest location.
Or, you can start stocking up on Bitcoin and other cryptocurrencies without getting off the couch. All you need to do is set up an account with an online cryptocurrency exchange.
These are much less complicated than brokerage accounts through traditional investment firms. Crypto exchanges are intuitive and simple to use, even for those who aren’t technologically inclined.
If you can place a Door Dash order on your phone to buy lunch, you can invest in crypto.
To set up an account with the best cryptocurrency exchange, like Coinbase, Binance, Kraken, Gemini, or any other, you’ll need to verify your identity. This is required by law and helps to prevent crime and money laundering.
So make sure you have your photo ID handy, as you’ll need to include a screenshot of it.
With your account verified, just deposit some funds that you want to invest, and purchase some coins. Of course, investing in crypto, just like any other asset, does pose risk. Only invest what you’d be willing to lose.
While losing it all is less likely, you will experience major price fluctuations. Your investment could drop 25% tomorrow, but then rise 50% next week. It’s the nature of crypto.
Myth #10: You Have to Go All In
A widespread myth is that you have to go all-in on crypto in order to make money. For example, you hear stories of people putting their life savings into crypto. Or they sell all of their traditional investments and buy as much Bitcoin as they can.
And while many people have done this, and made millions of dollars, it isn’t necessary.
For example, say you just wanted to invest $1,000 into crypto. If you bought Bitcoin in January 2019, you would’ve got in at a price of $3,800. If you held that for a few years until now, you would’ve seen Bitcoin’s price rise to $67,000.
That’s some serious growth. You’d be up over 1400% and your initial investment would be worth $15,000. You can use a Bitcoin investment calculator to see how much you missed out on by not investing when your friend or coworker told you to do so.
Or let’s look at a more recent opportunity: Solana. This coin saw huge growth in 2021. It started in 2021 at a price of $1.86 and hit $158 in September.
A $1,000 investment in January could be worth more than $80,000 just nine months later.
So you don’t have to start with a lot of money. Nor do you need to be an active trader. Just buying and holding for the long term is the most profitable strategy anyways.
Don’t Miss the Boat Again
Unfortunately, cryptocurrency investing is full of common myths that keep most people away. While this is great for the early adopters who make tons of money, it’s not great for the general public, whose wealth (or lack thereof) is wasting away thanks to high levels of inflation.
Don’t be ignorant or unaware. Crypto is here to stay and will become the dominant asset class in the near future. Don’t miss the boat again. Hop in and sail with us to the moon.
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