Back in the early 2010s, crypto investors could be laughed at as naive fools who are wasting their money by investing in Bitcoin. Bitcoin started conquering the world in 2009, when it appeared on the online market. At first, the virtual currency didn’t take off particularly well, but slowly its popularity grew and new cryptocurrencies started to appear on the market. This is how altcoins were born, which since their birth have strived for the same or even better results than Bitcoin.

Each of us knows that investing is never completely safe, but the possibilities to accumulate wealth are based above all on taking risks. Some are willing to take the risk and some are not. Cryptocurrencies have, however, become a popular investment target alongside apartments and shares. Today’s investors are aware of the risks, evaluate future events and familiarize themselves with cryptocurrencies very well. All of this is reflected in the growth of the popularity of cryptocurrencies and fluctuations in values.

Investing always involves risks

There is no such thing as a risk-free investment, because without risk there are no profits. Typically, the potential size of the profits is linked to the size of the risks: high risk brings big profits and low risk small profits. Or, as is possible with investing, all invested funds are lost. When investing, you should invest only as much as you can lose without problems. Some invest their savings and others take out loans. To the delight of investors, websites such as lainat.fi compare quick loans for consumers. By finding the right amount and loan for you, you can invest with a little more peace of mind. However, remember the risks, because even if you lose the entire amount you invested, you still have to pay back the loan.

You should always familiarize yourself with cryptocurrencies before making an investment decision. As a foundation, you should thoroughly familiarize yourself with various cryptocurrencies and especially your own favorites. The most successful investment decisions have been made by those investors who invested in Bitcoin with small amounts during 2009 and the beginning of the 2010s. They are known today as Bitcoin millionaires. Every altcoin (that is, a cryptocurrency born after Bitcoin) strives for the same success story as Bitcoin, but unfortunately, only Ethereum has so far come close to great popularity.

Cryptocurrencies can be purchased from various crypto exchanges. However, it is worth getting to know the stock exchanges in advance as well as the popularity of Western stock exchanges. For example, the German crypto exchange is a safe choice for Finns as well. If you have doubts about the stock exchange’s website, you should not join the website under any circumstances. It is important to be aware of the risks for both the investment target and the stock exchange, because the growth in popularity of cryptocurrencies is also reflected in the interest of criminals in building scam websites.

What should be considered when investing in cryptocurrencies

The value of cryptocurrencies is not regulated by central banks and governments, and their value is not based on gold like fiat currencies. It is clear that cryptocurrencies are significantly more volatile than traditional currencies. The value of cryptocurrencies is directly based on their popularity, which is particularly visible on social media. If a cryptocurrency is popular, its value is high. If, on the other hand, the popularity fades, the value of the cryptocurrency also collapses quickly.

Many also incorrectly assume that cryptocurrencies are not taxed. In Finland, however, taxation guidelines have been drawn up for cryptocurrencies as well, which every investor must follow. Taxation of cryptocurrencies enters the picture at the point when the value of the currency is realized in one way or another. This can mean, for example, making purchases with cryptocurrencies or exchanging cryptocurrencies for fiat currencies or other cryptocurrencies.

Summary

Cryptocurrencies are a very interesting phenomenon that can be seen especially in the world of the enlightened computer generation. Some strongly believe in the success of cryptocurrencies, while others are still waiting for the bubble to burst. Nowadays, it is common for students to invest their student loans in cryptocurrencies, while hoping for success for the amount they invested. Unfortunately, however, there is no such thing as a risk-free investment, so every euro invested ultimately means an increase in risk.

The first cryptocurrency Bitcoin made several Bitcoin millionaires in its time. In terms of popularity, only Ethereum has reached the same level, which, however, is not a direct competitor of Bitcoin due to its features. Bitcoin is specifically a cryptocurrency, while Ethereum is an entire ecosystem. In order for new cryptocurrencies to succeed, they must offer investors something new and different. Just like the meme coin Dogecoin has done.

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• Source: Plato Data Intelligence: Platodata.ai