10 August 2022
2 min read
safe crypto investments

safe crypto investments

Concerns with safe crypto investments

One of the key issues at the heart of institutions and governments around the world considering potential regulations for cryptocurrencies is how to promote a safe crypto investment environment, especially for those along the retail investor spectrum. On one side there are native crypto investors who participate in decentralised finance with a certain level of familiarity and able to distinguish the safest crypto to invest in. On the other end of the spectrum there may be those who have yet to make investments into DeFi at all, because of perhaps scepticism surrounding the legitimacy of crypto. In order to truly democratise investment in digital currencies, DeFi must become simpler to navigate, for the crypto savvy, future entrants, as well as even institutional investors. Safety is a key area to focus on with respect to these goals around simplicity and democratisation.

The goal of nearly any investor of course is to make a profit, and in the crypto space (perhaps just as is the case with nearly any investment goals) it’s important to be familiar with the possible risks, threats and opportunities that could impact investment success.

Challenges to making good returns

Making good returns truly depends on the unique goals – and risk tolerance – of an investor. This, in addition to factors such as education and uncontrollable market factors. Here are 3 terms to know with respect to establishing a safe investment environment as you navigate -- or consider entering -- the world of digital currencies.

Market volatility -

It's vital to be aware of the risks that come with navigating a highly-volatile market. Deep diving into insights from reputable sources can provide an investor with the safest cryptos or digital assets to invest in.

Pump & dump schemes -

Quite evidently, there will be players in the market who will try to influence and make good returns for themselves. You can steer clear from them by authenticating every bit of information you follow.

Crypto structured investment -

A product made of underlying crypto assets with risk hedging measures to safeguard investors returns. This certainly is an emerging space. It gives a scope for democratising the crypto investment space as institutional investors are also taking interest in these investment products.

Besides, it is important to be aware of regulations around crypto investments. Authorities around the world are constantly in the process of formulating policies to provide diverse financial market infrastructures as well as enhance the choice of investment for people. The scope of investing in crypto can vary from one country to another. It is advisable that everyone is aware of the regulatory framework before investing.

Conclusion

Maximising return and hedging risks to minimise the loss is always the best strategy for any investment. Any kind of hearsay perhaps should not stop an individual from staying away from investing in crypto. Rather it is necessary to make informed decisions and build the safest crypto investment portfolio. It is certainly an emerging space and things are rapidly changing for good. New projects are diminishing the risks and focussing on inclusion of more retail investors. Remember there was a time when the Internet was new, then considered a bubble and now needs no introduction. This will be a common thing without any questions really made regarding safe crypto investments.

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