There are many ways to earn more money, including letting your money work for you and grow passively through investing, starting a business, real estate, or getting a side gig on top of your full-time career. However you decide to make more income, you always want to make sure you’re making the best decision for yourself and your financial goals. After all, you’re trying to make money at the end of the day. Many people choose to make more money over their lifetimes by investing. Some people prefer safe investments such as CDs and high-yield savings accounts, while others choose riskier investments, such as stocks and cryptocurrency, for a chance at a higher return on their investments.
Cryptocurrency is considered one of the riskiest types of investments, so experts agree it shouldn’t make up more than 5 percent of your portfolio. Instead, your portfolio should be diversified enough to prevent you from losing too much money if one market drops. While cryptocurrency is a high risk, it can also be a high reward for savvy investors, making it a lucrative option for new and experienced investors alike.
However, many people wonder what the safest cryptocurrency is to invest in because they don’t want to take on too much risk. Well, we have some bad news for risk-adjusted investors; cryptocurrency is a high-risk investment no matter which crypto you buy, but there are some that you might feel safer investing in than others. This article will discuss the safety of investing in crypto, the safest cryptos to invest in, and how you can keep your investments safe.
Is Crypto Safe?
To figure out if crypto is safe, you must first define what safe means to you. Safety could pertain to the value of the asset or the security risks involved with investing in crypto. These are two different questions, so let’s consider them both.
Is cryptocurrency investing safe?
When we talk about safe investments, most people refer to the amount of risk involved as it pertains to the value of the asset. For example, some stocks are considered safer than others because their value continues to increase with slight drops here and there. However, crypto is a volatile investment, which means prices fluctuate daily. If you’re concerned about fluctuations in value, crypto is not a safe investment for you.
You can even lose everything by misplacing your private key, which allows access to your digital wallet where your crypto is held. If you forget your key, all of your assets are lost since there’s no type of insurance for individuals or businesses that will cover this loss. Additionally, while cryptocurrency is viewed as property, you cannot get insurance for it even when you still have it since it’s not regulated.
Cryptocurrency is still relatively new, and many investors still don’t know whether to invest or not. Because it doesn’t have the same history as the stock market, it’s prone to swings that can cost you everything. Some cryptos are more prone to drops and swings than others, though. For example, Bitcoin fluctuates just about every day, and it fluctuates a lot.
If you choose to invest in crypto, you can make your investment safer by never investing more than you’re willing to lose. If you can only invest a few hundred dollars at a time, that’s okay. Never invest money that you need to pay bills because you can’t guarantee you’ll get a return on your investment.
Is cryptocurrency investing secure?
The second question regarding the safety of cryptocurrency has nothing to do with its value at all; instead, people want to make sure their transactions are safe from cybercriminals who would steal from them. While cryptocurrency investing is relatively secure thanks to blockchain technology, it’s not the safest type of investment because it’s not regulated by any entity. Cryptocurrency is decentralized, meaning no government is in control of it, so there are no guarantees about its security.
Additionally, crypto scams are common. Many of these scams involve emails telling you to pay them in Bitcoin so they won’t reveal something about you to the public. Additionally, other scams send congratulatory messages saying you’ve won tokens when really they just want to collect your account information so they can steal from you.
Additionally, there are no second chances when investing in crypto. You can’t take back a transaction once it’s occurred. Blockchain helps make crypto secure because it prevents transaction editing, but there’s nothing you can do once you’ve decided to buy or sell crypto. If you make a payment in crypto, there’s no getting it back since crypto doesn’t allow for refunds the same way a credit card would.
Safest Cryptos to Invest In
The two safest cryptos to invest in are the two that have been around the longest and gotten the most media attention: Bitcoin and Ethereum. While neither of these types of crypto can be considered a safe investment because prices fluctuate regularly, they have more history, which can provide you with some information on what to expect when investing in them. Additionally, because they’re more widely known, more people are investing in them, making them less prone to swings in value.
Additionally, these two cryptos offer some security features through their blockchain technology. Bitcoin was originally created to be secure and avoid the need for a third party, but all types of crypto can be hacked, so nothing is inherently safe.
Very few investments can be considered completely safe, especially cryptocurrency, no matter which tokens you buy. Everything carries risk, and crypto is one of the most volatile investments. As we’ve discussed, cryptocurrency investing cannot be considered safe, but if you never invest more than you’re willing to lose, you can make it a safer investment for yourself. Additionally, some cryptos might be safer than others, but it all depends on their security protocols. You will also be responsible for the safety of your crypto assets, so there’s no getting your money back if you lose your key or your wallet gets hacked.