The Crypto Hype is Scaring me more than Halloween!

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The Crypto Hype is Scaring me more than Halloween!

 The Crypto Hype is Scaring me more than Halloween!
Image source: Nattawit Khomsanit,

The word Crypto is trending and has been trending for quite some time now. The craze that this digital currency has caused is immense and an immeasurable now. According to Coinmarket, the market has grown from around US$16 billion to US$2.9 trillion in just five years. As the market math tells us something that grows so quickly and that too in an unregulated setting, involves scrutiny and scanning. Remember the US$1.2 trillion subprime crisis of 2008?

Please read: Bitcoin falls over Evergrande’s default risk

Most of the cryptocurrencies have no intrinsic value which means there is no objective or fundamental value attached to it. Sit back and scan the volatile price movements that these coins have been experiencing. Not to be missed is the 30% price drop in Bitcoin earlier in 2021. The value of these crypto assets is highly volatile, just a celebrity touch or a Musk magic have sent them skyrocketing or deep diving time and again.

Also Read: Bitcoin hits $50,000 for the second time in two months   

Despite all the ups and downs, the crypto enthusiasts still swear by it.

Is Crypto worth the risk?

Investing in crypto assets has been making people stack up profits. There have been stories doing rounds on the internet of even young kids becoming millionaires by investing in these digital assets. There is no doubt that trading in cryptocurrencies can lead to big gains but comes with a risk factor. So, if it is the easiest way to earn profits, it is also the easiest way to lose it all.

Also read: How Do I Choose the Correct Cryptocurrency?

Should you invest in Cryptocurrencies in 2021?

The crypto world is undoubtedly luring. This new asset class comes with high potential and easy accessibility. The best part is this market runs for 24 hours and that too with no bias based on geography or nationality. These are a few reasons for investors routing towards these digital currencies. The adoption to these ghost currencies is growing rapidly and is on an uphill.

On the regulation side, many regulators have started working on a policy framework to keep a tab on the exponential growth experienced in crypto assets. Countries like China are banning it while some are welcoming them with open arms.

Most investors are still struggling to get valid answers to the question of – if they should invest in Bitcoin or for that matter any other buzzing crypto coins. Most of the cryptos have become a brand in themselves. But do these have a value? Now, not to mention is that paper currencies or your dollars have a value attached to it because the government says so. So, does your Bitcoin, Dogecoin, Ethereum, Shiba Inu have any value attached to it?

Ethereum is a network with operating decentralised applications (DAPPs), so perhaps there’s some inherent value there. As for Dogecoin and Shiba Inu, the value of these coins is based mainly on speculation.

We all know how much one Bitcoin is worth in dollars as of now– a value that has been changing all these years. Hence, no stability in terms of its value. Unlike gold and other assets, you can not touch or see it. Hence, no intrinsic value. Yet it is still widely accepted and appreciated. Much like fiat, Bitcoin has value because we believe it has a value. It has a spark and the attention of the incredibly smart leaders like Musk. But is it wise to invest in aspirational money that might have some technical characteristics of money but lacks its feature? Crypto bulls suggest no more than five percent of one’s portfolio should be allocated to digital assets. Some recommend just one per cent.

Regardless, I don’t know about what has smitten the crypto enthusiasts, these scare me more than the scary nights of Halloween.

Also Read: 10 Crypto Terms to Know Before You Invest


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