We have said a few times now that cryptocurrencies are not a safe haven (if anything really ever is) for long-term investing. That’s right, to all of you that truly believe there is some substance behind cryptos as of this moment, think again.
I’d like to go over the long-term implication of putting your eggs in this basket alone.
Consider the fact that anyone can open a line of credit, for example, with American Express. Then, they can essentially hurry on over to their coinable account and ride ten grand worth of coinage.
Sounds pretty cool, right? So what happens if it swings the wrong way?
Panic. All of these investors begin to sell off in what they justify as “risk management” of their personal finances. Although, these aren’t even their dollars at play. They are the credit systems.
This is only one example of how the microeconomics of the murky crypto waters are at play. They show a system in which there are still many flaws, although the security of the system is undeniably a solid piece of technology.
So what to do next? How can you hedge yourself?
Follow a basic, simple rule: Invest in the market with a tangible item that has been used for THOUSANDS of years. Gold is a decent start. Other commodities could work just as well. Regardless, just be sure to protect yourself and be smart with your money. Control your losses, and ensure that if that day does come that everyone is totally off the rails and dumping their digital currencies, you can rest assured you’re investment is protected.