Should You Invest in Cryptocurrency in College?By Ernest Hamilton, UniversityHerald Reporter
If the rapid rise in tuition fees isn't affecting you and you've got enough cash in hand to think about investing, then this article is for you.
Whenever we discuss investments, we usually think of real estate, mutual funds, gold, or stocks. Now, there's a new option to consider.
We're talking about cryptocurrency. It may sound cryptic, but it's just a form of digital currency, and it's been around for over a decade. Today, there're more than 3,000 variations of the new financial medium.
You can buy it or use a process called 'mining.' You'll store your asset in a digital wallet, which is another way of saying you keep it online or on your computer.
Let's take a closer look at the factors you'll want to study if you're contemplating adding these monetary units to your portfolio.
Used on the internet, these cyber currencies, such as Ethereum and Ripple, are not put in circulation by any central bank or financial authority.
While authorities have little jurisdiction over cryptocurrencies, this doesn't mean that they're not regulated. For instance, bitcoin tax Canada refers to the levy you'll have to pay on the units you hold if you're a citizen of that country.
The downside is that you don't have any protection for the asset you hold. If you lose your digital deposits for whatever reason, the government cannot recover them for you as they would if you put your money with banks or financial institutions.
A Popular Medium of Exchange
More people are beginning to use these currencies because they offer a very convenient way to transfer funds. There's also no need for third-party involvement, and it costs less than the fees charged by financial institutions.
This demand for such currencies will continue to grow as consumers look for cheaper options to transact online, meaning that they're here to stay.
Lower Confidence in Fiat Currency
With central banks continuing to print cash to boost economies, investors lose faith in conventional monetary units like the US Dollar.
High-interest rates charged by financial institutions are also driving people toward cryptocurrencies. As the demand increases, under normal circumstances, so will the value of the digital money.
The value of cyber monetary units fluctuates all the time. Tomorrow, your portfolio might only be worth a fraction of what it's valued at today.
You might not recover what you've lost, so there's no guarantee that you'll make money from your investment.
Beware of Scams
With interest in cryptocurrencies growing, scammers are taking advantage of less-informed consumers to rip off their savings.
A common ruse is to offer business and investment opportunities and assure you financial freedom.
Be aware of the typical signs of fraud. They usually appear in the form of promises that are too good to be true.
If you're guaranteed you'll make a profit or double your investment, it's likely a racket because no one can control market forces.
Exercise good judgment. Do further research if you find any information that's not clear. Look into the proposer's background to establish their credibility.
Is it Worth Investing in Cryptocurrency?
All investments carry some level of risk. We suggest that you consider the facts we've offered and exercise due diligence before you make a decision.
Avoid following the crowd or hype. Instead, weigh the pros and cons very carefully. Don't rush into any investment because you hear of people making money.
After all, you're still a college student. You've got many years ahead of you to grow your wealth. When in doubt, stay on the sidelines, watch, and learn. Cryptocurrencies will be around for a long time.