Cryptocurrency is an ideal investment if one is keen to take significant risks with their assets, as the market is highly volatile, and the value of crypto coins can go up and down frequently. However, if
you are careful, you can avoid losing all of your money. In recent years the prices of cryptocurrency have surged extensively, but in 2022, they plunged again. You need to be financially literate about cryptocurrency if you are keen to invest in the above.
Kavan Choksi- the need to be aware of cryptocurrency investments
Business and finance expert Kavan Choksi states that when you invest in cryptocurrency, you should always consider the facts and not the hype that surrounds it. Before buying and selling cryptocurrency, you should know how it works. In the UK, the Bank of England will surely not agree to allow you to invest in cryptocurrency as if you are reckless; you will risk all of your savings.
Understand the investment risks of cryptocurrencies
No investment is without risks, and cryptocurrencies are no exception. Since they are decentralized, they are free from government or any financial institution control. Remember, cryptocurrencies are highly volatile, and this is their main defining factor. If you get lucky, you can earn high returns, but in case the market dips, you can lose everything.
Do not fall prey to scams
In the UK, if you want to invest in cryptocurrencies, ensure you do not fall victim to scams. In the month of November alone in 2021, there was around one million pounds worth of scams involving cryptocurrency that was reported to Santander UK every month by customers. One of the most types of scams is when the criminal hacks into one’s computer and freezes the person out of his own cryptocurrency account.
In the UK, those people that hold money with firms that are regulated under the Financial Conduct Authority (FCA) fall under the protection of the Financial Services Compensation Scheme. For instance, if a building society or a bank becomes bankrupt, customers will get compensation of up to 85 thousand pounds that is available to the customer via the FSCS. A majority of the crypto assets are not under the regulation by FCA, and so if the cryptocurrency platform or exchange goes bust, there is no guarantee that you will receive your money back.
Cryptocurrencies are significant for long-term investments in the market
Business and finance expert Kavan Choksi states that if you are aware of the risks of cryptocurrencies in the UK, you can make better-informed choices. It would help if you were mindful of the market trends and global news that affect the financial markets. Cryptocurrency investing is not recommended for inexperienced traders.
He also adds that when it comes to cryptocurrency investments, you should hold them for the long term. In this way, you can analyze the market and earn lucrative returns from your investments. He recommends that investors should bank on portfolio diversification and invest 1% of their money in cryptocurrencies. In this way, they can avert the critical risks of cryptocurrencies and, at the same time, enjoy the lucrative rewards they offer when they appreciate in value with time.
