Would it be smart for an investor to take on such a risk? It’s clear that the winners are those who bought into bitcoin, say, back in 2022. What if you really want to become a crypto-millionaire now? What are the pros and cons?
Investing in cryptocurrencies at the current stage is indeed fraught with considerable risks, but it could also yield high profits after the halving event and the continued rise in BTC’s value.
Needless to say, now is not the best time to jump into the market. Bitcoin and a number of other coins have soared to all-time highs, shattering multiple upside targets over the past couple of years. These gains occurred amid heightened interest from institutional investors, the adoption of cryptocurrencies by major companies and further dissemination of blockchain technology. After such movements, corrections are inevitable, but they can start unexpectedly for everyone.
That said, one should not rule out further growth of cryptocurrencies. After the halving event, bitcoin is expected to rally again above $100k and even higher over the next few years.
Investment risks are associated with the high volatility of cryptocurrencies, regulatory restrictions, cyberattacks, as well as uncertainty surrounding further adoption by households. The advantages are its decentralized nature, limited issuance and rising areas of application.
If you would like to become a crypto-millionaire now, it’s better to forget about such an idea. You can bet all your money on upside and end up in a downward correction. God forbid that black swans unexpectedly should show up after you enter the market. Markets are impacted by multiple factors, not just spot bitcoin ETFs. It should be noted that no one knows what to expect from the markets going forward. Everyone trades in expectations and probabilities.
With proper risk management and cold calculation, cryptocurrencies can be a good investment over the long run. But you should only invest funds that you can af3ford to lose.