Cryptocurrencies are digital assets that function as mediums of exchange, stores of value, and in some cases, can even be used to participate in software programs like games or financial products. They have gone from a niche interest among tech evangelists to trillion dollar valuations and widespread mainstream attention. While they have many unique benefits, they are also very volatile and may not be suitable for everyone.
Traditional currencies are printed on paper bills or coins that you can carry around with you and put in a bank. Cryptocurrencies are stored in digital wallets, which can be kept on your computer or phone, or in apps that allow you to manage your investments. They aren’t backed by any government, bank, or financial institution, and they’re not insured against loss as money in the bank is.
As such, cryptocurrencies are often referred to as “unbacked” currencies. This can be a risk for new investors who are unfamiliar with the technology and might not have a plan in place for what to do if their cryptocurrency investment loses value.
To mitigate this risk, new investors should look for reputable cryptocurrencies with solid development teams and a track record of stable growth. They should also examine how widely a cryptocurrency is being used. Most cryptocurrencies make public metrics available that show how frequently their systems are used, and growth in this area could be a good sign that the currency is establishing itself in the market. Finally, they should look at who is leading the project — a well-known leader can be a positive signal.
The most important thing to remember about crypto is that it can be easy to get caught up in the hype. It’s also easy to make mistakes that can cost you a lot of money. Here are a few of the most common pitfalls to avoid:
Crypto investments can be very volatile, so it’s important to spread your money out among different assets. Otherwise, if one of them plunges in price, you’ll be heavily exposed. It’s also wise to invest in a variety of different coins, as each serves its own distinct purpose in the blockchain.
In addition to traditional car dealerships, BitPay partners with Lamborghini, Ferrari, and classic collector cars to accept crypto for the purchase of a new vehicle. Similarly, you can use the BitPay app or extension to turn your crypto into gift cards for furniture and home decor retailers such as World Market and Pottery Barn, or hardware and home improvement stores such as Lowes and Home Depot. If you’re looking for the ultimate ride, you can also use the BitPay Card to buy a brand-new Lamborghini or Ferrari from an RM Sotheby’s, Ducati Indianapolis, or Taboo Imports dealership.
