Crypto Investing 101

What is crypto?

Cryptocurrencies are a new form of currency that is digital and uses encryption techniques for security purposes. The transactions are recorded in a public ledger called a blockchain which is decentralized and not managed by any central authority like a bank or government.

In a nutshell = crypto is internet money.

What is blockchain technology?

No one really knows who is behind the pseudonym Satoshi Nakamoto, the creator of Bitcoin and blockchain technology.

Non-fungible tokens

Non-fungible tokens or NFTs are relatively new to the crypto landscape. Purchasing an NFT gives you the rights to a piece of digital art — and the use cases for “digital art” are vast. NFTs can be bought in the form of virtual real estate all the way to a picture of a green monkey. Here’s a list of the weirdest NFTs sold in 2021, including the first tweet that Jack Dorsey, the CEO of Twitter, ever tweeted.

Is it too late to start investing in crypto or NFTs?

We have never lived in a world where crypto or NFTs existed.

Benefits of investing in crypto

Investing in cryptocurrency has people buzzing for a number of reasons.

  • Diversification: The wonderful thing that cryptocurrency provides is an alternative way to invest your money. If you’re already investing in stocks, bonds, real estate, collectibles — crypto gives you another way to put your money to work. And if 2022 is going to be anything like 2021 — the returns you stand to make with crypto dwarf returns from any other asset class.
  • Form of payment: Unlike stocks, it’s becoming more and more commonplace for you to actually be able to pay for common goods and services with cryptocurrencies like Bitcoin or Ethereum.

Drawbacks of crypto investing

  • Volatility: Depending on your time horizon — when you need the money from an investment — crypto may not be a good idea. The shorter your timeline, the safer your asset should be, so that the value of the asset doesn’t fluctuate too much. For example, if you’re near retirement and need your money in a couple years, crypto might not be the safest play.

How big was cryptocurrency in 2021?

2021 was a blockbuster year for cryptocurrency and exchanges.

  • Bitcoin saw its price top out at $69,000 in November 2021.
  • Ethereum skyrocketed to a record high of $4,404 in October 2021.
  • Shiba gave investors a 49,000,000% return on their investment.

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