Investment opportunities in cryptocurrency currently seem attractive to many investors, given the great benefits they have gained from this market. The price of “Bitcoin” in 2020 was about 8 thousand euros, but by the end of March 2022 it reached about 40 thousand euros, and there are many success stories and quick profits that attract more investors to this market.

Cryptocurrencies are a non-cash digital payment method, which is managed and traded in a decentralized online payment system that is highly protected away from the control and control of banks. 300 million people own cryptocurrency by the end of 2021.

The number of investors is expected to continue to rise, as Hartmut Walz, an economist and financial expert at Ludwigshafen University of Applied Sciences, explained that buying cryptocurrencies has become easier than before.

Online brokers often provide individual coins for sale, and some savings banks even want to make it possible for their customers to purchase cryptocurrencies through their checking accounts soon.

Timo Emden, a specialist in cryptocurrencies at Emden Research, pointed out that the interest in cryptocurrencies has increased significantly, and added, “Cryptocurrencies have entered the traditional financial world, and have proven themselves in the asset class, so it is useful that Conventional banks are taking the lead and making these currencies available to their customers.”

private key

And if the investor wants to buy encrypted digital currencies, such as Bitcoin and others, it is often bought from foreign trading platforms, and then it is transferred to the investor’s wallet, which is a type of digital wallet, and the owners of the digital wallet must keep what is known as the “private key.” (Private Key) is in a safe place, and it takes some time and money to create and configure the private key.

But it seems easier with online brokers, as it only takes a simple click or swipe gesture to buy cryptocurrencies and store them in the digital wallet.

“Cryptocurrency is a new asset class with great potential, especially when this technology is used in other sectors,” Timo Emden added. Looking back at the recent past, investment opportunities can be identified.

On the other hand, Hartmut Walz warned that the ease of buying cryptocurrencies is a fatal signal, since this leads to it reaching the wrong target group, and experiences with the asset class are still weak, and investors should take into account that many currencies were stopped a while ago For a long time, many investors ignore the risks of buying.

Cryptocurrencies are classified as a high-risk asset class and are quickly being abandoned as doubts arise. (Getty Images)

A stroke of luck

Hartmut Walz added, “Profits from cryptocurrencies are just a stroke of luck, and no one can predict the future of this market,” to the extent that one tweet from Elon Musk, founder of the electric car maker Tesla, was enough to move prices Cryptocurrency, when it was announced last year that Tesla cars can be bought with cryptocurrency.

Many investors rely on encrypted digital currencies during times of crisis, such as gold, especially since these currencies are not controlled by any of the traditional banks, and in the case of Bitcoin, for example, their numbers are limited like precious gold, which cannot be mined from the ground indefinitely. named.

high risk

But Timo Emden cautioned that cryptocurrencies do not provide any protection in uncertain market stages, as currencies are classified as a high-risk asset class, and are quickly abandoned as doubts arise, and the “safe haven” narrative remains unresolved. real.

For this reason, experts stressed the need to be careful and cautious when investing in cryptocurrencies, since the risk of default is much higher than stocks, and investors should expect a complete loss sometimes.

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