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Every financial investment scheme has some drawback. Whether its low interest rates or its high volatility, every investor needs to understand the drawbacks of what they are re investing into. This article is for all those new investors who are looking to invest into the cryptocurrency market but do not understand some of the risks or flaws associated with it. After you have a complete understanding of the risks we will help you get started with questions like u201cHow do I buy cryptocurrency in Canadau201d.
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Every financial investment scheme has some drawback. Whether its low interest rates or its high volatility, every investor needs to understand the drawbacks of what they are re investing into. This article is for all those new investors who are looking to invest into the cryptocurrency market but do not understand some of the risks or flaws associated with it. After you have a complete understanding of the risks we will help you get started with questions like “How do I buy cryptocurrency in Canada”.
Let’s start with some of the drawbacks that are faced by every cryptocurrency investor.1) No regulating body: The whole point of cryptocurrencies were that they will not be regulated by anyone. This means that each individual is responsible for their investment and any loss/fraud cannot be reported to anyone and will have to be borne by the user unlike other financial markets where banks and other institutions act as regulating bodies and reimburse anyone in case of theft or fraud.
2) Extreme Volatility: Volatility and cryptocurrencies go hand in hand, these investments are not for the faint hearted as they are extremely volatile and unpredictable. When it comes to stock markets, there are certain things termed as circuit filters which control the volatility of any particular stock and prevent a stock from plummeting or sky rocketing in one day. In the cryptocurrency market we might see a coin double in a single day or vice versa.
3) No dividends unlike stocks: For those investors who seek a stable income, this is a very big drawback. In the stock market, fundamentally strong companies reward their investors and this is termed as dividend. Dividends are usually rewarded twice a year depending on the company’s performance. This is a good stable income for anyone who plays it safe. However, this is not available in the cryptocurrency market.
4) Prone to a lot of scams: Cryptocurrencies are prone to a lot of scams and thefts because of no regulations. There are several cryptocurrencies introduced Into the market only to rob your hard earned money. They will keep rising and might seem like exciting prospects but as soon as you invest some money in them they will turn the other way and drain out all your funds.
What are some of the safe ways to get started in the cryptocurrency market?The safest way to get started would be to do your due research before making any sort of investment. Look at factors such as market capitalisation to determine the popularity of a currency and then make an investment decision. For investors who want to get started but are afraid of the volatility factor then they can invest in coins termed as stable coins.
These coins are free of the volatility of the cryptocurrency market as they are pegged to an underlying asset(Dollar, Pound , Canadian Dollar etc). For anyone looking to buy stable coins like Tether or wondering how to buy QCAD in Canada, they should visit the Netcoins website today.SOURCE CREDIT: https://netcoinscanada.wordpress.com/2021/08/31/some-cryptocurrency-drawbacks-compared-to-other-investments/
