Proponents of investing in cryptocurrency would love to believe that, at some point, the prices will stabilise and settle into a steady upward trajectory. What has actually characterised the value of the digital coins is a series of violent moves in one direction or the other. It seems like, at least for the time being, that volatility will be the order of the day. And this isn’t your garden-variety volatility.
It’s the kind that would give you whiplash trying to watch it go up and down. All of this begs the question that every investor has to answer when they decide whether or not to make the leap into cryptocurrency: Can you stand the wild swings?
Obviously, the first consideration you have to make is whether or not you have the stomach for such a chaotic ride. If you get queasy easily, you might want to skip it and find a long-term bond somewhere that’s more your speed. But it goes beyond simply being a matter of your intestinal fortitude. What it comes down to is trying to decide if cryptocurrency investing is smart for you as an individual, knowing that volatility is the order of the day with it. And that answer will not be the same for every investor; it’s simply not that cut and dried.
For those who are ready to take the plunge and are looking for some digital help in the matter, a Crypto CFD trader could be the answer for you. You have to do some serious self-inspection first, however, both of your intestinal fortitude and your financial situation, before you even think of proceeding.
Before you decide if you can handle the extreme volatility of cryptocurrency, you need to make clear what you want the capital you invest to do. Are you looking for a big, short-term surge? Cryptocurrency can provide that if you time things correctly. But what about those who want their money to grow over the long haul? In that case, something a bit safer might be a better bet.
How much capital are you planning to spend on cryptocurrency and how badly do you need this capital to increase? If you’re well off and don’t mind to see your money treated so cavalierly by the wild price swings of cryptocurrency, then knock yourself out. But it is not the kind of investment one would make to solidify an iffy financial situation. The risk is simply too great.
Your Blood Pressure
People have a lot of stress in their lives, to begin with. Adding in the agita that will come from trying to predict what your investment in crypto will do next will only add to that stress. Is that worth the potential for monetary gain, which isn’t anywhere near a sure thing anyway? For many jittery people, that answer will be no.
Volatility is not for everyone, and if it’s not for you, then neither is cryptocurrency. Until it stabilises a bit, it’s best suited for those who both afford a loss and handle its psychological repercussions.