3 Cryptocurrencies to Invest In – Can You Handle the Risk?

CRYPTO

By now, most investors have probably heard about cryptocurrencies. Cryptocurrencies are pervasive in news headlines as an asset to invest in for the future. The hoopla surrounding cryptocurrencies makes it difficult for investors to distinguish between investments, and to know which cryptocurrencies to invest in.

Cryptocurrencies are digital money or virtual currency. It is a digital asset stored on a network of distributed computers. The computers use cryptography and encryption to make and verify transactions between people and institutions.

What is Cryptocurrency?

Like any investable asset, there exist risks to an investor. Early on, cryptocurrencies had a reputation for being used in criminal activities. However, they are now increasingly mainstream, with banks, large companies, governments, and the wealthy investing in or backing cryptocurrencies. This fact has added credibility to the asset class. There is, however, still high volatility and risk of hacking.

Risk of Investing in Cryptocurrencie

Bitcoin is the preeminent cryptocurrency and the oldest one. Reportedly, the cryptocurrency was created by Satoshi Nakamoto in 2009. However, no one has stepped forward and claimed to be this person. He mined the first Bitcoin and published the first journal article on it.

Bitcoin

The second crypto on this list is Ethereum, not really a cryptocurrency. Ether (ETH) is the actual cryptocurrency underlying Ethereum. The blockchain technology platform that drives ether is Ethereum. In any case, Ethereum is now often referred to as a cryptocurrency, but there is a distinction between it and ether. Vitalik Buterin invented the concept of Ethereum in 2013, and the platform was launched in 2015.

Ethereum

The volatility of most cryptocurrencies leads us to the next one to invest in, USD Coin (USDC). USD Coin attempts to solve one of the shortcomings of most cryptocurrencies, their volatility. It is a type of cryptocurrency known as stablecoins. The token does this by trying to maintain a peg of one USDC to $1.00. USD Coin was announced and launched in 2018 based on Ethereum. It is managed by Centre, a consortium including Circle and Coinbase (COIN).

USD Coin

Cryptocurrencies are an alternative investment asset class. Investors seeking diversification may consider crypto. However, they are often risky and volatile in many cases. In addition, not all cryptocurrencies are the same, and today, there are thousands making selection more difficult.

Final Thoughts on Cryptocurrencies to Invest In

We have listed three of the common ones in different market niches. Just remember, cryptocurrencies are not regulated, and you can lose money.

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