Play smart

Bitcoin and other coins have been regularly making headlines lately, thanks to big price moves – usually up. But does this mean that you need to have time to jump on the bandwagon? Perhaps not.

The problem is not just bitcoin or other digital assets that have been speculating during wild rallies.
It's also about regret - how many lost opportunities, for which it is worth reproaching yourself. Most do not understand what digital assets are and it can be tempting to buy just because friends and neighbors are talking about it. With over a thousand now, virtual coins seem to be here to stay, as is the underlying blockchain technology.
But how it all turns out is just a guess. These currencies exist in digital form. New coins are mined, created by computers that solve complex mathematical problems. They are stored in virtual wallets, and transactions occur and are recorded in computers around the world in a public ledger - the blockchain. You can buy coins at specialized exchangers. Cross-border payments are easy and cheap, because bitcoin is not tied to any government and is not subject to regulation. It and altcoins can be used to make purchases anonymously, which partly explains the money laundering connection. One of the basic rules of investing is that you must understand what you have.
Cryptocurrency raises the bar for knowledge requirements to a higher level. There are other reasons to be careful.

The economy is questionable

One of the reasons for the growth of digital currencies is that they are difficult to create, which ensures a moderately slow increase in supply, which has added to the fear of missing out among users.

Bitcoin is the most important player in the crypto market.

It has recently been valued at $160 billion. This made him more valuable than most companies in the stock market. However, corporations make millions and billions of dollars by providing important products and services. Digital currencies, for the most part, do not have this ability.

Parabolic prices

This is another way to indicate that prices are overheated and volatile. Earlier, the bitcoin chart rose steeply. With other assets in the past, such rapid price increases often preceded colossal disruptions. Those who buy today are simply hoping to sell it to someone at a higher price. Without a valuation or stabilization mechanism, it is an extremely risky acquisition.

Regulators won't help?

The US Securities Commission and other watchdogs are showing increasing interest in new currencies from a fraud-fighting standpoint, but that doesn't mean they'll help investors get out of the game unscathed if it turns out to be unfair.
In fact, the SEC's recent response was clear enough: you're on your own. There is a risk that the cloud will be hacked or the computer with the digital wallet will crash.
Bitcoins will remain, but access to them will never be returned without a key.

The wrong reason to invest

The opportunity to make money is a great temptation for investors. But some people may also be motivated by emotional insecurity—the fear of missing out. You hear other people bragging about how much money they make, so you start worrying about being left out, or worse, being considered a fool for missing the last train. Such feelings are not a good excuse for risking money. When people let their emotions influence their financial decisions, the outcome is rarely favorable.

If you are still willing to dive into the crypto world, minimize the potential for regret and financial harm by limiting your investment to what you can afford to lose.

---