The cryptocurrency has come a long way from being first developed in 2009. Its value has soared high, and it continues to be one of the most sought-after investment opportunities. But cryptocurrency is a new concept that has a huge fan base traction in the last few years in the bit signal, but it also comes with some major myths and misconceptions. If you’ve been thinking about investing, you need to know the truth behind some of the most common things you’ve heard about cryptocurrency. These kinds of myths are a roadblock to the success of crypto assets.
Is cryptocurrency a bubble about to burst? Is it unsafe and unregulated? Is it illegal?
These are all myths circulating ever since the first cryptocurrency was launched. Let’s address these myths one by one. Cryptocurrencies have a lot of myths surrounding them, and some of them are even true. But with the right information, you can navigate the crypto world safely. Here’s what you need to know:
Myths about cryptocurrency
With many myths stopping the growth of crypto assets, some are discussed below.
- Volatility can lead to a crash.
Many people believe that the volatility of cryptocurrency will lead to a crash—this is a myth! Cryptocurrency is not like the stock market; it is an entirely different form of currency and financial system. The volatility of cryptocurrency has nothing to do with how well it will work as an international currency.
It’s true that the value of cryptocurrencies changes quickly—and often dramatically. But that doesn’t mean it’s an unstable investment. It just means it’s not for the faint of heart, and investors need to be willing to ride out the volatility. Cryptocurrencies are very volatile, making it easy for them to crash, but it also means they could rise. You have to be sure you’re in it for the long haul if you want to invest, not just play around with short-term trades.
- Crypto has a bubble life.
Another myth is that crypto is just another fad or trend that eventually dies out. Cryptocurrency isn’t going anywhere simply because if there are people on this planet who want more control over their money and want a way to send money across borders quickly and easily without paying exorbitant fees, then there will be cryptocurrency. The great thing about crypto is that it doesn’t need governments or central banks to operate—it’s independent of those systems, which means anyone can use cryptocurrency now and in the future.
No one knows if cryptocurrency will be around forever, but there’s no reason to think it won’t be. For example, if you’re planning on investing in Bitcoin, Bitcoin’s market cap is at $64 billion as of November 2017. That makes it more stable than 99% of other currencies worldwide. If you’re trading short-term, this is something you’ll want to keep an eye on so that you don’t get caught off guard when the bubble pops.
- Cryptocurrency is unsafe as the government does not regulate it.
This one is just plain wrong! Cryptocurrency regulations are in place in countries all over the world. Cryptocurrencies are safe because they’re based on ledger-based blockchain innovation, creating immutable records of transactions made using cryptocurrency wallets. Thus, crypto might not be regulated by the government; it is still a safe asset and has billions of investors all across the globe.
- Crypto is illegally used.
While cryptocurrency has been used illegally (just like cash), saying crypto itself is illegal is not a fair deal to be done. Thus, it is just a way to keep you off track, every asset, currency, or investment can be put to use illegally, and thus it just depends on an individual’s perception. Indeed, this is just a half-true side of the coin, and thus, there is no reason to be away from an asset that can make you a billionaire.
Final way
This myth likely persists because cryptocurrencies still tend to be more volatile than standard currencies, which means there’s more room for growth and loss. While this should be considered when investing in cryptocurrency, you shouldn’t let the fear of volatility keep you from taking advantage of this new economic opportunity.