Finance, Investing

Is Cryptocurrency a Good Investment? Should You Buy in 2023?

Business Advice | 29 March 2023 | 1 year ago

If you are looking to invest your money, you won’t find yourself short of options. You could decide to invest in property, or stocks and shares, or you could buy cryptocurrency. There has been a lot of talk about cryptocurrency in recent years, and there is no denying that many people have made money from investing at the right time. However, that’s not to say that cryptocurrency is a good investment in 2023.

What is Cryptocurrency and How Does it Work?

Cryptocurrency is a digital currency, and transactions are verified and maintained by a decentralised system. This differs from standard currency, which is verified by centralised authorities and every transaction is monitored. With cryptocurrency, it’s possible to spend money anonymously and make purchases that cannot be tracked. This is because cryptocurrencies use encryption technology, allowing them to work as a currency, as well as an accounting system. Instead of storing cryptocurrency in a traditional bank account, you need to use a cryptocurrency wallet to access your funds. Some people choose to use cryptocurrency for anonymous purchases, whereas others benefit by investing in it as an asset. There are a range of cryptocurrencies out there, but Bitcoin and Ethereum are the two main ones.

Is Crypto a Good Investment?

If you know anything about investing, you will know that all types of investments carry a risk, but cryptocurrency is known for being one of the more volatile options because things change daily. Though it might be a good investment now, things can change very quickly, and there is no knowing if rates will drop tomorrow.

After experiencing huge growth across the 2010s, cryptocurrency saw greater backing by businesses and banks. This led to a demand for more and greater regulation, lending it credence. However, the sector as a whole crashed in 2022 for a number of reasons, which has impacted cryptocurrency. The war in Ukraine, higher inflation, technical issues and collapses of exchanges – such as Celcius and FTX – have all made cryptocurrency a riskier investment than others.

What is the State of Cryptocurrency in 2023 and Should You Invest?

At the moment, cryptocurrency is relatively cheap and this is enticing a lot of people into investing, but it’s unlikely to reach the heights it has done previously. It could take months, or even years, to make a serious profit in the cryptocurrency sector. If you do invest, you need to be prepared to lose the money, as making a profit is not guaranteed. You also need to avoid leading your cryptocurrency in an exchange, as this is a risk.

Sign up to our newsletter to get the latest from Business Advice.

Related Topics

Financial Planning for Small Business Owners
11 September 2023

Financial Planning for Small Business Owners

Read More →
Navigating Financial Challenges: 5 Tips for SMEs
17 August 2023

Navigating Financial Challenges: 5 Tips for SMEs

Read More →
What is Debt Financing?
14 August 2023

What is Debt Financing?

Read More →
What is Straight Line Depreciation and Why is it Important?
11 August 2023

What is Straight Line Depreciation and Why is it Important?

Read More →
Understanding VAT
3 August 2023

Understanding VAT

Read More →
Financial Planning for Small Businesses
2 August 2023

Financial Planning for Small Businesses

Read More →

If you enjoy reading our articles,
why not sign up for our newsletter?

We commit to just delivering high-quality material that is specially crafted for our audience.

Join Our Newsletter