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The cryptocurrency market is booming but is investing in crypto a good idea? If you find yourself asking that but have not become a crypto investor yet, you are in the right place. In this article, the ChangeHero team will provide a balanced overview of key considerations for potential cryptocurrency investors.
Key Takeaways
- Investing in cryptocurrency is not advisable for beginners before sorting out the key considerations. Acknowledging the pros and cons of Bitcoin and crypto is a must before taking the plunge.
- Is crypto safe to invest in? The short answer is not entirely. Some risks of Bitcoin and crypto include price volatility, regulatory uncertainty, lack of consumer protection against scams and fraud, and tech-related issues.
- On the other hand, depending on your situation, there are more than 10 reasons why you should invest in cryptocurrency. The advantages of investing in cryptocurrency include financial sovereignty, global accessibility, and the potential for considerable returns.
Should I Invest in Cryptocurrency?
Regardless of where you got the idea, before you actually use your hard-earned money like that, there are plenty of things to consider. What works for some investors might be a deal-breaker for others, so ask yourself a few questions before making the decision.
That being said, what exactly should you ask yourself? This is what this guide is for.
Is crypto good to invest in even if lose the investment?
You may have heard that cryptocurrencies can offer high returns, which is often the reason that most investors are interested in them. Not unlike other vehicles and instruments, though, this potential comes with significant risks. The cryptocurrency market is highly volatile, meaning prices frequently experience dramatic swings.
Is investing in crypto legal where I am and will it be in the foreseeable future?
Is it safe to invest in Bitcoin or cryptocurrencies today if they might be banned tomorrow? The regulatory landscape for crypto remains uncertain in many jurisdictions. Government policies and regulations can change quickly, potentially affecting cryptocurrency values and trading availability. In cases like El Salvador, Bitcoin is considered legal tender, but more countries restrict or ban cryptocurrency trading entirely.
Do I want to learn how blockchain, exchanges, and wallets work?
Are cryptocurrencies a good investment if I have no idea how they work? Many people do not encounter cryptocurrencies and blockchain in daily life, making this quite a specific but acquirable skill.
Hackers and scammers are not your only concern: you can also lose funds if you make a mistake in transaction details. Investors should have a solid grasp of blockchain fundamentals, different types of cryptocurrencies, and secure storage methods to prevent investment loss.
Am I ready for an unpredictable market?
Does cryptocurrency have a future? For sure but no one can say what is it like. Market manipulation is a real concern, as cryptocurrency markets are even less regulated than traditional financial markets. For instance, while it is a more common issue in lower-capitalized crypto assets, large holders (“whales”) can significantly influence prices. Not to mention that fraudulent schemes are still common to this day.
Am I equipped to do taxes?
Lacking cryptocurrency regulation does not mean there is none at all. Any cryptocurrency investor should consider practical aspects like transaction fees, exchange reliability, and tax implications. Is it smart to invest in Bitcoin right now and how do I prepare? Cryptocurrency transactions may be taxable events in your jurisdiction, requiring careful record-keeping.
Should I invest in crypto if sustainability is an issue?
The environmental impact of cryptocurrency mining, particularly for Bitcoin, has raised sustainability concerns. Regardless of that, is Bitcoin a good investment? Even if you do not care, you have to acknowledge this could affect future regulation and adoption.
Is it smart to invest in crypto only?
Is it worth investing in Bitcoin alone? As tempting as it may be to go all in, diversification is crucial. Experienced investors typically treat cryptocurrency as part of a broader investment portfolio rather than concentrating solely on crypto assets. It bears repeating that keeping more than you can afford to lose in crypto can turn sour more quickly than you can imagine.
Am I ready to keep tabs on the industry and educate myself continuously?
Is Bitcoin good to invest in if I don’t keep up with the news? Even after you go through this checklist, your homework does not end here. Every new position in the portfolio should come after careful research and due diligence: understand the specific cryptocurrencies’ use cases, development teams, and technological foundations.
And yes, investment advice from social media influencers or unsolicited sources does not count! Cryptocurrency promotion often involves conflicts of interest or outright scams. Know your sources before you listen to what they say (that applies to us too — you’re welcome to research more in our blog and come to your own conclusions).
Risks of Cryptocurrencies — Is Crypto Worth It?
Is crypto a safe investment? It is common knowledge that cryptocurrency investing carries significant risks, and whoever tells you otherwise does not have your best interest in mind.
But how exactly risky is cryptocurrency? Knowing the challenges you might encounter when using and investing in cryptocurrencies beforehand is key to investing smartly.
The risk warning is everywhere not to dissuade you from investing in crypto entirely. Rather, it is there to make sure you are educated about the potential risks so you can take preemptive action and secure your investment should you invest in crypto.
Before going into each major point in detail, here are just a few concerns of crypto investors. Price volatility can be extreme, with values potentially dropping 50% or more in days. Regulatory uncertainty means governments could restrict trading or ownership at any time, impacting values. The space is rife with scams, from fake coins to fraudulent exchanges and pump-and-dump schemes.
Furthermore, technical challenges abound: securing private keys requires considerable expertise, and mistakes can mean permanent loss of funds. Self-custody of crypto assets demands careful management of passwords and security measures, while using exchanges exposes investors to potential hacks or exchange failures.
Volatility
The most frequently brought up risk of crypto investing is extreme price volatility. Unlike traditional assets, crypto prices can swing dramatically within hours or days – sometimes gaining or losing over 20% of their value.
This means you might be forced to sell at a loss during market downturns, especially if you need the investment for other purposes. The rapid price swings can also trigger margin calls for investors using leverage, potentially leading to automatic liquidation of their positions.
Additionally, no matter what the narratives push, volatility makes cryptocurrencies unreliable as a store of value or medium of exchange, limiting their practical utility. Even seemingly stable periods can be disrupted by sudden market movements triggered by news events, regulatory changes, or large traders’ actions. This unpredictability makes it difficult to make informed investment decisions or rely on traditional valuation methods.
Regulatory Challenges
Unlike traditional financial markets and services, cryptocurrencies and digital assets are more prone to changes in legality and regulation. Laws around them are not yet firmly established, meaning the whole landscape can change in a very short time, creating extra risks of cryptocurrency investing.
- Government agencies worldwide are still determining how to classify and regulate cryptocurrencies, leading to an uncertain legal landscape. Countries can suddenly ban or restrict crypto trading, ownership, or transfers, potentially causing sharp price declines or leaving investors unable to access their funds.
- Tax regulations around crypto transactions are complex and evolving, creating compliance challenges and potential legal exposure.
- Banking regulations may limit the ability to convert cryptocurrencies to traditional currency or restrict exchanges’ access to banking services.
- Securities regulators might determine certain cryptocurrencies are unregistered securities, forcing exchanges to delist them.
- Different jurisdictions often have conflicting regulations, creating additional complexity for cross-border transactions.
These regulatory uncertainties make it difficult for crypto investors to make long-term plans or accurately assess their risk exposure.
Scams and Fraud
When it comes to scams and fraud risks, the crypto industry looks much better than a few years ago but still far from perfect. Examples are numerous: common schemes include fake initial coin offerings (ICOs) that collect funds for nonexistent projects, pump-and-dump schemes where manipulators artificially inflate prices before selling, and fraudulent exchanges that steal deposited funds.
Phishing attacks target investors’ private keys and exchange login credentials. Scammers often create convincing fake versions of legitimate cryptocurrency websites or wallets.
Social media is rife with impersonators promising guaranteed returns or posing as cryptocurrency figures to steal funds. “Rug pulls” occur when project developers abandon the project and disappear with investors’ money. Market manipulation is widespread due to limited regulation and concentrated ownership. Even seemingly legitimate projects can turn out to be elaborate Ponzi schemes.
The cryptocurrency space’s pseudonymous nature is no longer as tall of a hurdle as it was before thanks to all the progress made in blockchain analysis. Recovering stolen funds or holding fraudsters accountable, however, is a whole different story.
Technical Challenges
Although often neglected, self-custody is another major risk in Bitcoin and cryptocurrency investing. In simpler terms, it refers to the secure storage of data that enables you to access crypto assets.
Self-custody requires managing private keys — if these are lost or stolen, the funds are permanently inaccessible with no recourse. Hardware wallets and cold storage solutions, while more secure, require technical knowledge to use properly and do not safeguard against mistakes on the user’s part. Software wallets can be compromised by malware or security vulnerabilities.
The technical intricacies do not end with storage and management. Sending cryptocurrency to incorrect addresses or using the wrong network for transfers can result in irreversible loss of funds.
Of course, there are also technical issues outside of the user control. For example, smart contract bugs or vulnerabilities can lead to theft or frozen assets. Network congestion results in high transaction fees or delayed trades, potentially leading to losses during volatile periods. Exchange accounts face security risks from hacking, and two-factor authentication must be carefully managed to prevent lockouts. Although you will likely not be able to stay safe from all such risks, understanding blockchain technology, transaction verification, and security best practices is the best course of action to secure your investment.
Benefits of Cryptocurrencies — Is Crypto Still a Good Investment?
Still have not changed your mind and the sections above have only made you wonder ‘Should I invest in Bitcoin right now’? Great, because now is the time to through the benefits a cryptocurrency investment can offer. Who knows, perhaps in your case some of them or the entirety of these upsides will be enough to offset the risks.
Cryptocurrency investing offers financial sovereignty, allowing direct control of assets without intermediaries and enabling transactions regardless of banking access. Digital assets are typically accessible 24/7 globally with lower transaction fees than traditional international transfers, especially for large amounts. Blockchain technology offers transparency, with all transactions publicly viewable and verifiable. Cross-border transactions made with digital assets can settle within minutes instead of days. And last but not least, the emerging technology’s growth potential has historically provided opportunities for significant returns (though past performance doesn’t guarantee future results). These benefits can make crypto an attractive option for certain investors despite the risks.
Financial Sovereignty
The reason cryptocurrencies (namely Bitcoin) came to be is to give people a vehicle to transact value outside of government and institutional control. Users can directly control their assets without relying on banks or financial institutions as intermediaries. This means no account freezes, no arbitrary transfer limits, and no dependence on bank operating hours or policies.
With proper security measures, investors can maintain complete control over their funds using private keys, allowing them to transfer value anywhere globally without requiring permission from third parties. This sovereignty is particularly valuable in countries with unstable financial systems, high inflation, or restrictive banking policies. Cryptocurrency holders believe it protects their wealth from currency devaluation, capital controls, or bank failures. They can also maintain financial privacy while still operating within legal frameworks.
However, this sovereignty comes with responsibility: the burden of managing the security of their funds is entirely on the investors. Just like you do not need to trust the intermediaries, you cannot rely on them for protection or recovery of lost funds.
Accessibility
Unlike traditional finance, anyone with an internet connection and smartphone can participate in cryptocurrency markets, regardless of their location or traditional banking access. This opens financial opportunities to the billions of unbanked or underbanked people globally (although it also exposes them to all of the risks listed above).
Unlike traditional investment accounts, crypto requires no minimum balances, credit checks, or extensive documentation to get started. Markets operate 24/7, allowing investors to react to market movements anytime.
Fractional ownership means investors can start with small amounts, sometimes just a few dollars. The ability to self-custody assets eliminates geographical restrictions and banking limitations that might prevent access to traditional investments. Even in regions with limited financial infrastructure, cryptocurrency can provide access to global economic opportunities and investment options that would otherwise be unavailable to local populations.
Lower Fees and Faster Time
Although we are talking about investments, all users eventually need to transfer cryptocurrencies, and luckily, it can offer a better experience than some fiat rails, such as remittances.
International transfers that typically cost 3-5% through banks and take 3-5 business days can be completed in minutes with crypto for fees often below 1%. Large transfers particularly benefit: sending millions in cryptocurrency costs about the same as sending smaller amounts, while traditional wire transfers scale fees with transaction size. Some newer blockchain networks enable near-instant settlements for fractions of a cent.
For merchants, cryptocurrency payments can eliminate credit card processing fees (typically 2-3%) and remove chargeback risks. Cross-border business payments and remittances become more cost-effective, as crypto bypasses the complex network of correspondent banks and intermediaries.
However, fees can spike during high network congestion, and some exchanges charge significant withdrawal fees, so users must carefully choose their platforms and timing.
Transparency
Another major benefit of crypto and blockchain is the transparency of transaction records (in most cases). Every transaction is recorded on a public ledger that anyone can verify, and it is impossible to manipulate records after the fact. With blockchain analysis tools, investors can track token movements in real-time, monitoring large transfers, exchange flows, and wallet behaviors to inform their decisions.
Smart contracts are usually open-source, allowing verification of how protocols handle funds. Network statistics like mining activity, transaction volumes, and active addresses provide insights into ecosystem health. This transparency helps detect market manipulation, verify project claims about token distributions, and monitor protocol performance.
Additionally, investors can verify their own transactions without relying on third-party reports. The immutable nature of blockchain records creates permanent proof of ownership and transaction history. While transactions are transparent, the identities behind wallets often remain pseudonymous, requiring careful analysis to interpret the data meaningfully. Apparently, there is a huge market for deanonymizing specific wallets and addresses.
Return Potential
Sure, there are lots of benefits to digital assets and crypto, but let’s get real for a second. We are talking about investing, so you are probably here because you want to boost your profits, aren’t you? There is shame in that, provided that you do not go in blindly — this is what our guide has been about up to this point.
It is true that cryptocurrency’s historical return potential has been remarkable. Bitcoin grew from less than $1 to peaks above $100,000, and other cryptocurrencies have seen even greater percentage gains. Early investors in successful blockchain projects have achieved returns far exceeding traditional investments.
If it does not work out in the short term, is crypto a good long-term investment? The emerging nature of the technology suggests the potential for continued growth as adoption increases and new use cases develop. The crypto market is rife with opportunities for informed investors to identify undervalued assets before mainstream recognition.
Additionally, crypto markets’ low correlation with traditional assets can provide portfolio diversification benefits. Staking, lending, and DeFi protocols offer ways to earn passive income on holdings.
However, as is always the case, and crypto is no different, potential returns come with proportional risks. Out of thousands of coins and tokens in the market, the vast majority have failed completely, and past performance doesn’t guarantee future results.
The Bottom Line
Now that we have briefly outlined what lies behind the disclaimers, we hope that you have a better understanding of what crypto investment entails. Should you go through with it or back out is entirely up to you, and if you are still not confident in your judgment, best seek out professional advice.
How do you invest in cryptocurrency? You can find the answer to how to start investing in crypto in the ChangeHero blog as well! Follow ChangeHero on X, Facebook, and Telegram for daily updates, cryptocurrency investment tips, and more content.
Frequently Asked Questions
Is cryptocurrency a good investment right now?
Regardless of the prevailing market sentiment, your decision depends on individual circumstances, risk tolerance, and investment goals. To understand if crypto is a good investment today, learn to use metrics such as the fear and greed index to gauge how safe it is to invest in cryptocurrency at any given time. Although the sentiment and valuations change, some key risks like regulatory changes and technical challenges remain, so before investing, conduct thorough independent research.
Is investing in Bitcoin a good idea?
One of the major advantages of Bitcoin is that outside of dollar-pegged stablecoins, BTC is probably the least risky crypto asset currently in this market. The benefits of Bitcoin, as well as its reputation and tokenomics, make it the first choice for retail and institutional investors alike. Nevertheless, you should stay aware of what the risks of Bitcoin are.
What if I bought 1 dollar of Bitcoin 10 years ago?
In January 2014, $1 worth of BTC would net you 0.0044 BTC, worth $461.83 today. Is Bitcoin still worth investing in? Is it smart to invest in Bitcoin right now? Since then, the factors determining the value of BTC have changed, so there is no guarantee that should you invest in Bitcoin today, in 10 years, it can repeat the same feat. Moreover, the same risks of investing in Bitcoin apply.
Is crypto still worth investing in 2025?
Should I buy crypto now? While fundamental reasons for and against investing in crypto remain largely the same, the market at the moment leans more towards greed than fear. Some investors may want to refrain from investing in an overheated market to not end up buying the top while others believe there is still more room for growth and profit-taking.
Is it the right time to invest in crypto?
Is crypto a good investment today? In a challenging and unpredictable market such as crypto, it is hard to call the right time to invest. You may take the gamble or bet on the technology and long-term fundamentals instead but in any case, do it with regard to your financial situation, risk tolerance, and understanding of the technology.
Should I invest in crypto or stocks?
Although this is a whole different discussion topic, both cryptocurrency and stock investments have their pros and cons to consider. As a compromise, if you are really interested in investing in blockchain technology, you can research stocks of blockchain companies and related derivatives.
Disclaimer
This article does not intend to substitute professional financial or investment advice and is intended to serve as educational material on crypto and digital assets. When dealing with cryptocurrencies, remember that they are extremely volatile and thus, a high-risk investment. Always make sure to stay informed and be aware of those risks. Consider investing in cryptocurrencies only after careful consideration and analysis of your own research and at your own risk.
