Cryptocurrencies: Tread with caution

Bitcoin has seen its share of mixed reception- while luring some investors with potentially huge rewards; it has been scaring others away with equally high stakes. This volatile nature has led to people wondering on its reliability and investment rate- with people scampering helter-skelter for a conclusive solution. Truth is, the cryptocurrency can certainly be volatile, with the recent plummeting rate down by 25% over five days after concerns grew that a new currency called Bitcoin Cash would make Bitcoin itself a less attractive payment option. Although that fear didn’t last long, the seed of discontent was sown. Yet, one must keep the following points in mind: Price swings are an incredibly common occurrence in cryptocurrency space, with all the volatility going on. This can be due to the fact that cryptocurrencies lack in regulation, with swings like 25% of the total value or more. Predictors state that this state is likely to remain unless some sort of regulation is introduced- but at the price to losing the essence of what cryptocurrency stands for. Hence, coping with the volatile nature should be nothing but a natural practice amongst investors. The unregulated standard requires one to take extra precautions in terms of safety and security. Unfortunately, hacking has become a norm for malicious entities and in this case, major blockchain hacking has lead to investors losing a lump sum. Therefore, locking down a reliable and trustworthy cryptocurrency wallet should be the first step. The word of the street states  that the cryptocurrency space is a bubble- a notion vouched by analysts. The rapid price-rise has taken away the sustainability of the industry a.k.a there is no long term security. In such a situation, diversifying your holdings is a prudent way to protect yourself against sudden failure.

— The author is the founder of Bitsachs.