Original note posted on Black Enterprise
Here’s an amazing statistic: Almost 57 million people are expected to buy cryptocurrencies in the next year. This activity is predicted even though more than 20 percent of Americans have never owned a cryptocurrency.
At the same time, according to a new study, a major hurdle preventing people from buying cryptocurrencies is not understanding them. In fact, almost one in four Americans doesn’t understand cryptocurrency at all.
The Ascent surveyed 2,000 American adults in May 2021 and asked them if they understand blockchain, where to get information about cryptocurrencies, and what tools they use to invest in crypto between queries.
- To know more: The billionaire creator of Ethereum has already expected the collapse of the cryptocurrencies
So what is cryptocurrency? Basically, it’s a digital form of currency and an asset class. It can be used to buy goods and services worldwide. Well-known cryptocurrencies include Bitcoin, Dogecoin and Ether. The high-profile investors reportedly include Tesla CEO Elon Musk and rapper Snoop Dogg.
In the past few days, Dogecoin and Bitcoin have suffered depreciation for various reasons that hit the entire industry. The cryptocurrency market slumped $ 500 billion, falling from more than $ 2.5 trillion to $ 2.02 trillion. CoinMarketCap.
Matt Frankel, a certified financial planner at The Ascent, said Black company via email that cryptocurrencies are digital assets that, unlike fiat currencies such as the US dollar, are not regulated or issued by any central bank or authority.
Other important findings from the Ascent study are:
1. About 57% of Americans believe that those who haven’t invested in cryptocurrencies can still make a profit.
2. Over 51% of Americans who own cryptocurrencies have bought them for the first time in the past 12 months.
3. 41% of Americans would consider getting part of their salary in cryptocurrency and another 31% would consider getting all of their salary in cryptocurrency.
4. About two-thirds (65%) of Americans would consider signing up for a credit card that offers rewards and cashback in cryptocurrencies.
5. Coinbase is the leading exchange: 67% of US adults who own or have owned cryptocurrencies have used this exchange. More than 28 percent of those surveyed did not use any other exchange.
Given the pros and cons, Frankel says that use cases for cryptocurrencies are both a payment method and a store of value. Cryptocurrencies can be used to pay for goods and services at merchants who accept them, and since most, especially Bitcoin, have limited supply, they are often referred to as “digital gold”. He added that the downsides are that cryptocurrencies are not widely used in the real world and prices are extremely unstable.
With that in mind, is now a good time to buy cryptocurrencies? Frankel claims that there is absolutely no way of knowing what the price of a cryptocurrency will be in the future. Trying to measure the price of an asset rarely works well. “If you feel like cryptocurrency is something you want to immerse yourself in, the best way to do this is to build your position in smaller increments over time, rather than buying it all at once.”
- To Learn More: 4 Cryptocurrencies You Should Buy This Year
He pointed out that 20 percent of people who don’t own cryptocurrencies are excluded because they don’t understand how to buy them. However, says Frankel, buying Bitcoin and other cryptocurrencies might be easier than you think.
“You can buy Bitcoin through platforms like Cash App and Venmo, and if you want a variety of cryptocurrencies, a trusted US-based cryptocurrency exchange like Coinbase or Gemini is a completely safe and easy-to-use form of purchase.”
Other personal finance experts recommend buying or investing no more cryptocurrencies than they can bear to lose. They say investors would do well to take this into account as the market can be volatile and unpredictable. They point out that while the cryptocurrency has made solid gains, it has also seen major drops.
Observers suggest that potential buyers do their homework and do thorough research to become aware of the potential risks of cryptocurrencies before they dive in. Ascent’s Frankel highly recommends reading a Bitcoin or Cryptocurrency manual before purchasing – the Cash app has a great manual that is easy to follow.
There are also podcasts like this one that offer advice on buying and investing in cryptocurrencies.