Cryptocurrency investing may be one of the most lucrative ventures of all time. While it’s unlikely that people will attain the comparative wealth of Mansa Musa (the former ruler of the 14th century Mali Empire), plenty of punters will be happily putting in their two weeks notice by the time this decade draws to a close.
Yes, you can profit immensely from the current volatility in the crypto marketplace, but it has become a giant headache keeping up with everything. Ask yourself, are you checking the price of Bitcoin every waking hour? Have you subscribed to twenty different Youtube channels for cryptocurrency investing advice? Can you not stand the idea that you won’t have a spare $500 or $1,000 to invest in the avalanche of new ICO’s which seem to be popping up every week?
It can all be very time consuming and mentally taxing, which is why I feel it’s important to highlight four common problems associated with cryptocurrency investing.
1. Safety Is Hardly Guaranteed
This is an entirely new asset class which essentially didn’t even exist in the first decade of the 21st century. And like anything which hasn’t been implemented before on a mass scale, there is going to problems along the way.
There still aren’t any real solid research and rating agencies to give you any “buyer beware” red flags. Instead, there are just a lot of random articles, hearsay saturated hype, and “expert” pundits weighing in with a muppet level of understanding themselves.
Simply put, without many years of past performance data, it’s really unclear what might happen at the macro level. And imagine making that cool million and a hacker steals it? It’s happened before.
2. You Don’t Really Know Anything
Whether you are conversing with a Millennial or a Boomer, the common man really doesn’t “get” cryptocurrency, and it wouldn’t really matter much if they did. Yes, if you are a genuine computer scientist you might be able to comprehend the tech behind this new(ish) platform, but you will still be unlikely to understand it’s upcoming impact on global economics.
The ‘personal incredulity‘ fallacy runs rampant with cryptocurrency, and especially amongst older people. “Just because I don’t personally understand cryptocurrency, it must therefore not be real.”
3. It’s A Growing And Unclear Headache
The cryptocurrency markets are like New York City. It never sleeps.
Things can go up and down 20-50% in just a single 24 hour cycle, and some of the most substantial movements can occur during the most ungodly hours of your time zone. That is because everybody in the world has access to the same cryptocurrency markets. So was 4am, while you were sleeping, the most lucrative time to buy or sell Litecoin in your global position? Well tough.
Additionally, there are now frequent trading delays with some of the top applications like Coinbase, and there are unclear tax implications for cryptocurrency investing. Again, these are primarily negative symptoms which have occurred because the technology (and hype) are so new.
4. Greed And Arrogance Are Running Amok
By now you have heard about people mortgaging their houses to buy bitcoin right? Does gambling your most valuable tangible asset on a volatile and intangible entity, which can’t shelter you from the rain or cold, sound like a wise decision to you? Well some people think it is.
The cryptocurrency boom is also inevitably turning (probably) once humble human beings into arrogant and self-congratulatory shadows of their former self.
Self-made men, who don’t look a day over 25, are smoking fat cigars while they give youtube presentations on “what’s hot” in the marketplace to their hungry followers. People are posting pictures of their burgeoning portfolio valuations on social media, anxiously awaiting a flood of “likes” and showers of praise-tinged-with-jealousy. Internet huckster Tai Lopez of course has to butt in and annoy you with vague Youtube advertisements preying on people’s desires.
My simple advice to you is this. Be wise and be humble when you dive into cryptocurrency investing. Enjoy the ride, but don’t become a victim of your own hubris.
This article was originally published at CryptoGeography. Permission to reprint this article elsewhere is granted, provided that all text and hyperlinks (including this footnote) remains intact.