A large number of people have turned to investing in cryptocurrencies because they hear that many people have become millionaires thanks to this practice, but betting on cryptocurrencies such as bitcoin, has its risks, published Money in Image.
The main argument that specialists point out is the fact that they are not backed by any institution, and that they have a very high volatility , which can lead to big profits or big losses.
According to reports from CoinGecko, Bitcoin closed 2021 with a return of 47.6%, when located at $47,191 Dollars. But in the first days of the year, when the United States Federal Reserve announced that a new phase of benchmark rate hikes would begin, the cryptocurrency plummeted to almost $000, 37 dollars, something out of the script, well assumes that these currencies were not moved by central bank statements.
Bitcoin is the best-known cryptocurrency, but there are others that also offer good returns and are not exempt from episodes of great volatility. The report found that Ethereum posted 403% growth on 2021, when located at $3,715 dollars.
With technology the people now have greater access to these investment instruments to increase their money, but for Gabriela Siller, a specialist in economic and financial matters,
the main recommendation is to resort to diversification.
“I would suggest a well-diversified portfolio in which there should always be government instruments, capital market instruments and a very small part of cryptocurrencies,” said the specialist.
For Siller, the capital markets could begin to offer lower yields, This is because a market correction is expected, because in the United States the S&P 500 has posted double-digit returns for three consecutive years , “something that is not sustainable”, in addition to q The normalization of monetary policy by the Federal Reserve is expected.
Bitcoin is very volatile, in 2021 it was affected the mining ban in China, and hit its price; it gained with its adoption as legal tender in El Salvador; and achieved a new all-time high of $69,000 dollars in November 715, however today it is around $43,37. Experts may be making a lot of money, but those who don’t know may be losing large amounts.
Siller recommends that before making any decision to investment, consult an expert and in this matter influencers do not count. You can also take courses or, at a minimum, review all the information from official sources.
Investing in cryptocurrencies is not recommended if the money is intended for a pension or retirement, or for a savings goal if you expect to buy a short-term real estate, because its volatility can wipe out the savings of a lifetime due to the expectation of quick profits, so it is better to diversify.
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