Dangers and Problems of Crypto Currencies

Dangers problems crypto currencies

We want to warn you about some dangers and problems of cryptocurrencies.

Investing in crypto currencies is an investment. Investments, not just crypto currencies, can be wiped out, stolen, and lost.

Crypto currencies are currencies and are assigned some arbitrary value.  Everything in life has value and we all value those things differently.  Some days stocks, real estate, gold, and other investments have high value.  Later they crash to a much lower value.  Then the value usually goes back up.

Talk to older people around you.  They'll tell you about multiple stock, real estate, and gold crashes.  These are considered some of the best investments people can make - yet these markets have regular crashes.

The value of crypto currencies, such as Bitcoin, also fluctuates up and down - just like stocks, gold, and real estate.  In our premium website we talk about charts and chart patterns exhibited by crypto currencies.

There are shady people in the crypto currency market - just as there are shady people in stocks, insurance, real estate, gold, and every segment of society.

Are Bitcoin and crypto currencies illegal?

You can buy illegal things with regular US dollars. You can buy illegal things with Bitcoin and cryptocurrency. You can also legally buy things with US dollars, Bitcoin, and cryptocurrency. Our suggestion is to do things legally. In the long run - you make more money, you keep more money, and your life is much easier and happier.

What is the relative risk?

Dangers problems cryptocurrencies

We estimate the overall risk of crypto currency investing to be more than regular stocks, about the same as commodities, less than gambling, and much less than the lottery. We think that commodity traders and gamblers would tell you that they are not risky if you take the time and effort to learn and understand what you are doing and make smart, informed decisions.  Our job is to help you make smart, informed decisions about cryptocurrencies.

By some measures, cryptocurrency are less risky than other investents. For example, cryptocurrencies are a liquid asset. Cryptocurrencies can be easier to sell than stocks and mutual funds. If you decide on a Saturday morning that you want to sell some cryptocurrency - you can do it - on Saturday morning. The buying and selling of cryptocurrencies happen 24 hours a day, 7 days a week. It's like going to your local store and spending US dollars.

If you want to sell a stock or mutual fund, you might can put in the order on Saturday, but usually have to wait till the stock exchange markets open on Monday morning to actually sell it. If you had money tied up in a house, car, boat, or gold coins - what is required to sell them? How long does it take to fix/clean them up, find a buyer, do the legal work?

Realistic Expectations

Some people think that they'll put $100 into crypto currencies and next month be living in a mansion, flying in private jets, drink champagne for breakfast, give up their day job, and have maids and servants.

That is not going to happen.  Perhaps in 10 or 20 years, if you sacrifice, listen, learn, and make good decisions.  But not anytime soon.

Our goal is to help practical, rational investors make smart and informed decisions about crypto currencies.

Here is the bottom line. There are risks with all investments. The risks with Bitcoin and crypto currencies are a little different than other investments. But more the same than different.

Ready for the next lesson?

Additional Reading

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