Cryptocurrency – a new form of digital investment is in the season, and it is worth gold; with days, its prices are reaching the skies. Dogecoin and Cardano are some of the market leaders. Many individuals have gathered for investment with the sudden rise in these currencies.
However, apart from earning income, this form of investment – cryptocurrency trading, has no use. Moreover, the market is highly volatile and what if the investment runs into losses in place of gains? So, is it worth investing in cryptocurrency?
Having discussed with several experts who offer finance assignment help on investments, it is clear that people should not invest in cryptocurrencies. Here are the 4 prominent reasons they highlight.
Bitcoins are plenty
Contrary to what is promoted for the publicity of cryptocurrencies, it is not low in number. Its scarcity is a façade. What most individuals forget is that cryptocurrencies have a digital existence. Thus, it is as low in count as gold and other physical metals. Therefore, the count availability of bitcoins is in the hand of programmers; the more they mint the hardware, the more it will be produced.
Problem with the utilisation of cryptocurrency
There is a problem with cryptocurrency utilisation. If one looks at the actual proportion, one can understand the situation. More than 18 million cryptocurrencies are available today, and investors have held on to nearly 7 million coins.
The rest of the 11 million remains unutilised by investors. Looking at the global context, the GDP of the entire world was 93.86 trillion in 2021. Bitcoins contributed a meagre 2.9% to the gross development product of the world.
Lack of tangible measurement values
Investment in other forms of the market has physical values to measure it as an asset. Suppose an individual wants to buy shares of a public limited company. In that case, one can rummage through the company’s income statements and balance sheet, scan the industry’s activities, and learn about its management from the recent conference calls and presentations.
Simply put, one can have all the needed information before investing in the company.
However, one can never conduct any research for investment in cryptocurrencies.; no practical data is available about the investment products. For example, one may learn about the transaction settlement times and the current count of tokens circulating. Still, none of this information can provide any update on the values of cryptocurrencies.
Flat currencies may no longer exist
Many experts who offer accounting homework help believes that people often take wrong decision with their cryptocurrency choices. For example, most investors contribute to digital coins in place of flexible blockchain technology that offers more value for investment than other forms of cryptocurrencies. We can use it for remodelling supply chain management and advance overseas payment.
Many organisations are testing teetering blockchain to flat currencies. As a prime example, if more companies secure patent syncing assets based on blockchain to the digital token as Mastercard did in 2018, it will end using the digital token in blockchain networks.
Blockchain will take years to mainstream
Blockchain is now broadly tested to measure its scalability. Thus, it is still a light year away from gaining in the market. When cryptocurrency arrived a few years back and sold like hot cakes, it was evident then that blockchain technology would become a part of cryptocurrency shortly.
However, nobody anticipated the dilemma about blockchain would arise. No profitable organisation is ready to plunge into the expensive and time-consuming industry.
Forgery is a serious issue
Anyone can hack crypto easily and misuse its its data or information.The cryptocurrency industry is relatively new; not all investors take a dig into the sector with explicit knowledge.
Thus, these individuals become prone to theft or forgery. In addition, not many cryptocurrency investors know that crypto coins must be stashed in digital wallets; else, they are susceptible to hackers.
Taking advantage of this little knowledge of the investors, many North Korean hackers have created cryptocurrency blogs and publications that trap money from the vulnerable crypto coins and fuel unethical activities in the isolated economy of the country.
No regulatory bodies to control
In cryptocurrency, everyone can maintain anonymity. Although regulatory bodies control the purchase and sale of the products, even the Securities and Exchange Commission of any country has little control over the market.
Though this lack of regulations is one of the prime reasons for its hype, it can be problematic if things don’t work out legitimately.If someone steals currencies, The federal commission of any nation cannot help much.
Tax calculations are confusing
Crypto do have taxes on it.If one thinks that the income tax calculation of the country calls for a justification, one must wait to invest in cryptocurrency and then make the statement. Every nation’s revenue and taxation department wants its citizen to report the investment-related gains and losses, even one linked to purchasing goods and services.
For example, if a citizen purchases a bitcoin worth $40000 and uses its 1/4th to buy a new appliance, the individual may need to calculate the bitcoin’s value at the time of transaction and note its associated capital gains or losses. One needs to be a master of tax calculation to recognise that.
To sum up,
It is entirely up to the investor whether or not to put their money in cryptocurrency. However, despite many benefits, the world of digital currency is altogether volatile. Therefore, one must consider the risks involved and have explicit knowledge about the latest advancements in cryptocurrency before investment.