In recent years, cryptocurrency has increasingly become a popular investment consideration for young people. A recent report from the Association of Investment Companies (AIC) has revealed that of non-investors aged between 20 and 40, an impressive 70% are aware of cryptocurrency such as bitcoin. This is well ahead of traditionally popular investment options such as individual stocks and shares (59%), premium bonds (49%), bonds (43%), investment funds (23%), forex (21%), and venture capital (7%).
The rise of this new digital currency is clear to see, yet questions around what cryptocurrency is and how to go on investing in it remain. Firstly, cryptocurrencies are decentralised digital currencies, designed to be secure and anonymous and functioning without a central bank. Cryptocurrencies use cryptography – computer sciences used to make and manage data – as a method of verifying transactions. Bitcoin was the first established cryptocurrency, yet various others have since been created, with their values fluctuating considerably.
Putting money in cryptocurrency can involve lengthy and time consuming processes, so anyone looking to invest should be sure to weigh up their options and understand the risks. It’s important to remember that the value of cryptocurrencies can rise or fall abruptly and the investor could end up losing their entire investment. What’s more, cryptocurrency investments are largely unregulated and comments from government officials that have been less than enthusiastic about such currencies only add to the sense of risk.
Those without sufficient funds wanting to put money in cryptocurrency could be better served looking toward alternative investment products on the market. Another option would be to purchase small amounts of Bitcoin (for example, £10) to get a feel of how it works, learning more in the process. This option is suitable for those wanting to dabble in the cryptocurrency market and better understand the term “cryptocurrency” in action.
In summary, cryptocurrency represents a new and innovative world of digital currencies. With its meteoric rise to popularity among young people, understanding how to invest and what the associated risks are becomes increasingly important. It’s worth noting that cryptocurrency investment is largely unregulated and the associated risks, though not yet fully understood, should be taken into consideration by those looking to put their money into such currencies. Anyone wanting to dip their toes into cryptocurrency markets should be sure to fund their investment from reputable sources, understanding all associated risks before parting with their hard-earned money.