Topic: How safe it is to invest in cryptocurrency - page 11. (Read 2413 times)

There are no investments that would mean safe from losses these days. But investing in bitcoin has become safer today because its now starting to be more recognized and even big institutional investors are already investing in it. However, if you want to take advantage of the market despite of its price volatility, having good knowledge and skills in the crypto market will help you manage the risk and increase your chances to be more profitable and become successful in your investments.

5% is still significant. Keep in mind this is essentially a regressive tax. Inflation hits the lower class the hardest, so if the purchasing power can't be at least maintained, it surely should not be reduced, let alone reduced by design. If the rate was kept at 2% and central banks were okay with inflating the currency at that rate in order to maintain economic activity, I'd still say crypto (bitcoin in particular) would be "safer" without regression built in by design. Bitcoin's deflationary, it could theoretically only get more valuable if the market decided that it holds value as the total potential supply gets lower. Currency is targeted at 2 percent but they don't maintain those goals year over year, at least not post-COVID.



That's fair, but my point is geared towards the idea of relative risk between a long term investor and a day-to-day trader. Day trading incurs more risk, generally speaking. That's not true for everyone, of course.

I don't know what you tell it day trading or long trading. After opening a trade I never sell at loss. I wait until the price reached a minimum profitable stage per day. if my target is filled within a day then it's good I close the trade, If the target is not filled on the first day I wait for a couple of days but I don't sell at loss anymore. I do follow this way when the market shows a boring stable stage like the past couple of months market showed a boring movement between 30K to 40K. But when it started to give a bullish signal I like to keep holding for long term, like now the market is giving potential bullish signals, I paused my short trading and open a long trade from 40K.

Everything would really be depending on projects potential on which even just on a year duration basis then 5% increase would really be just minimal or already conservative kind of approach speaking

with yearly gains but not all would really be that patient and selection of coins that we would be dealing on would really be varying on each person thats why outcome couldnt really be just the same.
Safe is something a word that doesnt really fit out on this market because even good coins do plummets on a year time so its not really giving out some assurance.

Even with volatility, investment in crypto is not a day-to-day operation. That's day trading and it's akin to gambling with built in risk incurred by the trader. Long term investing also has built in risk, but it's fairly minimal and you'd have to actually try to lose value on your assets over the long term (or make some terribly unfortunate investments). What's risky is leaving your finances in traditional currencies which have a built in mechanism of inflation, targeted at 2 percent yearly. Seeing current trends, the real numbers they're willing to admit to are easily 5%+ depending on the currency.

Don't put cryptocurrencies and bitcoin in the same basket when it comes to safety of investment. Putting money in bitcoin is very safe as long as you can accept short term volatility. If your goal is 3+ years in that time span you can be sure that either the stable average price will be higher or at least the volatility will give you some options to sell at a profit. IMO it's going to be the first option but if you become impatient there's going to be a higher price for you to capitalize on.

Altcoins are a 50/50 bet. I've seen enough of them die not to expect much. A dollar put in bitcoin is always a safer choice than that dollar invested in a pump and dump scheme like dogecoin.

Of course it is a volatile investment, which is why anyone who is investing has to be careful. But, being a volatile investment doesn’t make Bitcoin a bad Stock or asset.  The problem is that people never plan themselves properly while they are about to invest in Bitcoin. Some of them don’t even understand what they are doing, they always just come in based on stories that they have heard.

And knowing how the media is, we only hear the news about people who has been successful investing in cryptocurrency, but we hardly see any media that carries news about those that has lost their money. So people usually think that it is an easy thing, and they just go in without having a good strategy or preparation, and that makes them to end up losing their money.

Ethereum is not very decentralized. PoS will make it even less decentralized because then the richer you are, the more power over the network you have. In Bitcoin no one has more power over anyone else, no matter how rich you are. And most important thing is that Ethereum has Vitalik and co. running everything, no matter how decentralized it would be otherways. They can make decisions to affect the whole network. So it is a big red flag regarding decentralization.

One more thing is premine. Bitcoin had zero coins premined. Ethereum just gave millions at the start to their founders and their friends. Again, huge red flag.

Yeah of course there always is the possibility of failure, just like in everything else in this world. I agree about investing only what you can afford to lose, but as I was saying if someone decides to take a small, I repeat small, extra risk, doing it now it's easier compared some years ago. As usual there is a huge difference buying bitcoin or Ethereum rather than some shitcoin hoping it makes 300x.

That just tells you how shitty other altcoins are.


I don't know if you know this, but 70% of the total Ethereum supply has been premined. Also, last time I checked top 100 addresses owned ~40% of all ETH which is a much higher number than BTC has (afaik its 14%). Given those numbers, Ethereum is still far from BTC.


That is also questionable. Remember the DAO hack from 2016 when Vitalik & co decided to rollback the network in order to negate $50 million worth of exploit? By the way I am not saying that ETH is shitcoin, but in all things that really matter it can't compare to Bitcoin, especially if you look at it from the long term hold point of view.

The most important thing when investing is to always think 2 sides, namely profit and loss, all types of investments that provide large profit opportunities then automatically the opportunity to lose is also large, and what I like about bitcoin is that the opportunity for big profits is very easy to achieve even in a short time, but we should always be wise not to sell all assets or put all money into bitcoin.

               You should be clear with what you are talking about. Crypto currencies as a whole is definitely not a safe haven specially for beginners or even veterans that do not know basic technical analysis or the basic "dos and don'ts" when looking for a good coin to invest in. Heck, even bitcoin cannot be considered a safe investment due to it's volatility. Not unless you are investing money you can forget about and ignore regardless of market conditions. But yes, given the right conditions and the qualities bitcoin has, it is indeed a safe investment to some extent.

To assess the safety of investing into cryptos, one can roughly estimate how the price changed over time and figure how much can be lost and how likely (and how fast) it can be recovered if one keeps hodling. So unless we take the last ATH point of Bitcoin which wasn't reached yet after the prices fell, Bitcoin does lose about 50% of value from time to time, sometimes over the course of a short period, such as one month. But losses around 15% are more common. Also, Bitcoin does bounce back eventually, but it can easily take half a year, and in older history took around 3 years, actually (from December 2017 till December 2020). Of course, one must also remember that if something didn't happen before, it doesn't mean it'll never happen in the future.

Altcoins are actually more risky investments than Bitcoin. Moreover, the price of altcoins in satosh almost always falls, which is why it is believed that investing in bitcoin is the most profitable. There are cases when some altcoins grow very well, but finding such a token for investment is not easy. There are thousands of altcoins, and only one bitcoin.

Bitcoin is a source of income for many families who were poor, but they need capital

I think Ethereum is also among the alts the one with the most decentralization,,, and this comes from me a person who used to think it was not. To be fair, no coin can be decentralized from the beginning, and no coin can claim 100% decentralization but Bitcoin is the only one and with Ethereum catching up,,, that can be said to be in control of no single person.

That is important as you say, but as I also said in an earlier post on an altcoin thread utility is really the true marker of value. Bitcoin and Ethereum have real, actual users.

Everyone else is pretending or incentivizing utility.

And what are you trying to say about cryptocurrency is risky and not all investment in cryptocurrency is risky? That sounds contradicting lol.
And if not ALL investment in cryptocurrency is risky, can you enumerate types of investment in crypto that does not bear a risk?
 In terms of investing into the right coin that only means investing in Bitcoin, because most altcoins bears a lot of risk than hodling Btc.

Cryptocurrency is a risky investment because of its high volatility and also very profitable, but not all investment in crypto is risky in as much as you do your research thoroughly and invest in the right coin, people might complain about pump and dump in crypto but it's actually being done also in stock market, so this doesn't mean that crypto is not really safe

I wouldn't also trust in that assumption of "if wallets, exchanges and platforms we're using  are safe". There is this quite old saying: Not your keys, not your money, We have numerous examples of (mainly) exchanges falling down due to mismanagement, poor coding, poor and bad security practices, hackings and even states/justice bringing down platforms over hacks to attempt to return money to costumers and most of the times, costumers get nothing back. So, I would be very careful!

Everything that is made on computer code, is prone to errors, bugs and therefore, exploitation, no matter how much you invest in OpSec. So, in extreme situations, you want to have your own security and truly understand it. I heard someone say something like this, which I completelyagree, somewhere in the past: If you have an extremely complete and complex OpSec that you don't fully understand, will be a worse OpSec than a simpler one which you deeply know and understand.

This is not true like many have pointed out. Most of the cryptocurrencies actually are not very decentralized. It does not matter if there are nodes or miners around the world if there is still private company or founders or some foundation on top of that with power to change the system, change its rules, protocols or whatever.

Bitcoin is the only one which has true decentralization with wide enough spread around the world and no founder or company in the center of it.

After understanding this, it is very safe to invest in Bitcoin in the long term. In short term it is very volatile, meaning price will change much, because it is still very young assett so it is still in price discovery phase.

Why is it safe to invest in Bitcoin? Because it has open rules which everyone can verify from its open source code and it is immutable. It is and wants to be system that does not change it rules. System where you can trust for it to remain the same. No matter what happens in the world, no matter who has how much money, no one still has power to change the rules of how it operates. Not even the most powerful government in the world.

That is why it is very safe to invest in it. So now you just need to learn more about it. Learn:
- How it operates
- What are the immutable rules it has
- What are the halvings
- What are all the use cases of how people around the world uses it and why
- What are the problems with fiat money that Bitcoin fixes
- What is inflation
- How Bitcoin helps green energy shift making green nergy more affordable
etc.

Good luck on your journey. If you learn these things, it will change your life for the better. For yourself, for the people close to you and for the nature and climate of this planet.