As we enter the beginning of the massive upswing in mass acceptance of Bitcoin, cryptocurrency and the blockchain, we will see the public split into two camps: Those who educate themselves (and therefore position themselves for financial opportunity), and those who stay in a state of fear about a new technology they don’t understand—or who stay in a state of analysis paralysis, and therefore never make the jump into actually trying the technology out. Those in the second group are likely to miss out on one of the greatest opportunities in the history of world finance.
Because you’re one of the brave few who’s willing to surf the wave of the future, here’s how to overcome the five fears that stop people from educating themselves on cryptocurrency and potentially supercharging their financial destiny.
1. I Don’t Understand It
Many people don’t want to explore cryptocurrency because they don’t understand it, and therefore they’re afraid of it.
Unfortunately, this means that they’re missing out on a once-in-a-lifetime window of financial opportunity. And additionally, by not taking the time to understand blockchain technology, they’re getting behind on understanding something that will become as central to our lives as the Web became.
On the flip side, people are correct to think that they need to educate themselves. Investing in cryptocurrency without understanding what it is would be as foolish as investing in a stock without having any idea what the company is or what they do.
The solution to this fear is to honor your intuition that you need to be educated on crypto. And remember—it’s not hard! We’ve made it easy at our “Bitcoin Insider” course, but whether you take our course or find some other way to piece together information and skills from other resources, you owe it to yourself to understand this truly Promethean technology—and the opportunities it can bring you.
2. It’s Too Volatile
Cryptocurrency investments are indeed among the most volatile in the world. Their up-and-down swings can leave even the most seasoned Wall Street trader with whiplash.
But look at it this way: One of the reasons that crypto is so volatile is because it trades fast. Not only does it trade globally, it also trades 24/7. What takes the stock market years to do, crypto does in a month.
Volatility primarily affects short-term traders—in fact, day traders rely on it, which is one of the reasons they love cryptocurrencies. Longer-term strategies, however—like position trading (buying and holding a coin for months or longer) or investing (buying and holding long term)—can smooth out short-term volatility.
The danger often comes with panic selling—that is, selling your Bitcoin or other cryptocurrency during a temporary dip in price (usually while thinking things like "Bitcoin is crashing! This is the end!" while panicking), only to watch the price swing back up in value—sometimes even above the price you sold at. In this case, you would either have to walk away from the table, or buy back in—losing some of your stack of Bitcoin or other cryptocurrency in the process. New investors can be particularly vulnerable to this error—especially if they've never been exposed to the extreme emotion that can be caused by watching price charts before.
If you're interested in investing, there's an easy solution to this problem, which is—once you've understood the fundamentals of Bitcoin, blockchain and cryptocurrency—speaking to a registered financial professional, one who can assess your current financial situation and goals, and make good recommendations based on your unique position.
3. I Could Get Hacked
Many potential investors in crypto have been scared off by famous large-scale hacks like the infamous 2013 Mt. Gox scandal, the DAO hack that slowed down Ethereum in its early days, and even smaller scale hacks of users’ private wallets, like the summer 2017 hack of the Jaxx hot wallet.
These are legitimate fears; however, there are bulletproof solutions. Not only have many exchanges massively tightened and streamlined their security protocol in the years since Mt. Gox, but solutions like cold storage allow you to securely hold your coins for years without ever having to worry about being hacked.
Understanding this separates the crypto professionals from the dabblers. We explain how to fully secure your crypto in our Bitcoin Insider course, potentially saving you millions.
4. I Don’t Know What Cryptos to Pick
Crypto isn’t like the stock market. Even though there are over 1300 (and counting) cryptocurrencies, there are really only a relatively small number of actually viable technologies. The big ones—Bitcoin, Ethereum, Litecoin and so on—sit pretty comfortably at the top of the heap. Lots of new and promising technologies are creeping up to the top, also: IOTA, Cardano, NEO, NEM and several others. But along with those, there are tons of alt-coins that probably have little to no long term financial viability. (You don't need to meet any criteria to create a cryptocurrency, unlike the stock market, where a stock must be very carefully analyzed and regulated by the US Securities Exchange Commission or analagous body in other countries.)
Luckily, we've created a free guide to the top 7 cryptocurrencies to show you exactly what the most popular cryptocurrencies are. (Hopefully you've already read it!) This certainly isn't a guarantee, but it's a good indicator of what the market values most. Congratulations, you’re light years ahead of the average new investor!
5. I Don’t Know How to Enter the Market
Entering the crypto markets has become easier and easier (only a few years ago, it was still incredibly difficult and convoluted to even directly buy Bitcoin, without mining it yourself or having somebody pay for your goods or services with it).
Exchanges now abound that offer easy purchase and trading of cryptos. Some are significantly better than others. We cover exchanges and how to navigate them in our course.
6. I’m Afraid of Illiquidity—Will I Be Able to Get My Investments Back Out Into Cash?
Bitcoin was initially a fairly illiquid asset—you would actually have to find somebody willing to buy them off you for dollars and negotiate a price.
This problem has been solved as crypto exchanges sprout up that—YES—transfer your crypto investments back into USD, Euros or other currencies in seconds, which you can then safely transfer to your private bank account in the times it takes for a standard wire transfer to complete.
(NOTE: Liquidity issues can still effect many of the smaller, less supported cryptocurrencies with small market capitalizations. It can also affect the larger coins during times of large activity in the markets, particularly dramatic price moves on Bitcoin or Ethereum. However, on average this issue is making significant strides forward, and as more and more people enter the markets, it creates tremendous financial incentive for the creation of better and better market architecture.)
The Bottom Line
Nearly all of people’s fears about crypto relate either to earlier eras where certain technological problems were not solved, or to issues which can be fixed with a little bit of education, or to unrealistic expectations. Whether you learn how to approach cryptocurrency correctly by using Bitcoin Insider’s resources or somewhere else, you owe it to yourself to master this new asset class!