Chances are, if you have any interest in investing, or you’re trying to avoid making mistakes as a first-time investor, you’ve heard about cryptocurrency. There’s a good reason for that!
Cryptocurrency has become increasingly popular in the market in recent years. The most popular trading app for cryptos, Coinbase, has over 30 million users. Needless to say, people can’t seem to get enough of cryptocurrency.
But, for others, it can still be confusing. The good news? You don’t need to be an investment expert to get started with cryptocurrency. But, it can be helpful to learn a bit more about it.
With that in mind, let’s take a look at four interesting facts about cryptocurrency that can help you to decide if you want to learn more or dip your toe into investing in cryptos.
- They Are High Risk
People have made millions of dollars from cryptos. That’s enough to entice many people to give investing in cryptocurrency a try. But, they are high risk and can essentially “vanish” at any time. So, while you may experience a high reward, you’re also running a great risk with your investment. It’s up to you to decide if it’s worth it.
- There’s More Than Just Bitcoin
When you think of cryptocurrency, Bitcoin is probably the first thing that comes to mind. But, there are actually over 1,300 virtual currencies you can buy into. Yes, Bitcoin is the most popular, but that doesn’t always mean it’s the best. Do your research to determine which cryptos you want to buy.
- You Will Be Taxed
The IRS doesn’t consider cryptos to be a form of currency. Instead, they view cryptos as property. That means you still have to pay taxes on them. If you’re new to the world of cryptocurrency, utilizing a service like a Crypto Tax Software can make it easier to ensure you’re doing things the right way.
Because cryptocurrency is so popular, the IRS is really cracking down on making sure those who have it are paying taxes on it. So, if you do have any cryptos in your possession, it’s important to report them to avoid getting fined or penalized.
- It Is Trackable
It’s very difficult for anyone to commit fraud when it comes to cryptocurrency, because it is trackable and traceable. It isn’t kept in a bank. Instead, every transaction made with cryptos is public as long as you know someone’s wallet ID. If you do, you can search for it on the blockchain and see where their cryptos are being sent, how they are coming in, etc.
Everything is public when it comes to cryptos, which is a nightmare for identity thieves. It makes buying and selling cryptos more secure, knowing that it would be pointless to try to “fake” anything or do any dark shopping.
The more you learn about cryptocurrency, the easier it becomes. It also becomes more exciting as an investment opportunity. While it may not be the best investment options for beginners, it’s a great opportunity for those who are willing to take a risk and consider the potential for quite a handsome reward.