With all the hype about crypto, it's very tempting to put everything into the cryptocurrency market for a moonshot. As a cryptocurrency investor, you have to be very disciplined and keep up with the market daily. There is truth to the saying of “not putting all the eggs in one basket.” In fact, before you plan on spending all your money on cryptocurrency, this is a cautionary tale from Reddit about a guy who took out a loan with a 3.5 year of repayment time with an 85% loss. Here are 5 more reasons on why you shouldn’t put all your investments only in the cryptocurrency market.High Volatility: Moonshots come at a cost. It is a wild ride with losers and winners. While there are for sure lots of winners in the market, there are also a lot of people holding bags. The market is very volatile so if you entered in the peek, there is a chance that you lost at least half your money.
Exchanges Go Down: During the peak of the cryptocurrency boom, there were over 100 exchanges and currently, there are now only 79 exchanges. They go out of business either due to legality or thefts. Exchanges are honeypots for internet hackers, so make sure to pick one that is highly secure. If all your investment is tied up in any of the exchanges that shut down, there is a high chance that you will never be able to retrieve your investment. Make sure to pick a safe exchange to keep your investment safe.
Highly Manipulatable Market: Since the market cap is so small, it is really easy to manipulate the market forming a whale to pump the price or to dump the coins to drive the price down. If all your investment is in the same coin, it would be a daily roller coaster to keep up with the price manipulation.
Ponzi Schemes: Since it is a highly unregulated market, there are a lot of Ponzi schemes that might or might not affect the price of the coins. Here is a list of sample Ponzi scheme that went down: Bitconnect, Bitcoinly, Ambis, Bitlake, Ambis, Microhash, Microhas, Thunderbit, Vixice, Metizer, Bitpetite, Lendconnect, Vone, etc. If all your investments are tied up in one of those Ponzi schemes, you could lose 100% of your holding once the Ponzi scheme shuts down.
Storage of Coins: The security of the storage for your coins can matter a lot especially if all your money is tied up in there. Even if you really secure the coins, you could lose the wallet key. Storing coins in any wallet could be a risky business. It is believed that an estimate of $30 billion in Bitcoins is lost forever. If all your investment is in a lost wallet, it could be horrible news.
So the lesson here is to never put all your eggs in one basket. Investing in cryptocurrency can be fun, and the blockchain is an exciting piece of new technology. However, the concept is still new and there is money lost in the business daily. Of course, there are Lambos bought with money gained from cryptocurrency, but there were also people who lost their homes from investing all of their money into the market. During the 2017 hype, there were people who refinanced their homes to buy coins or people who took out loans that they are now struggling to repay due to the 85% lost. Remember to only put what you could afford to lose in cryptocurrency to not repeat those cautionary tales from 2017.
Zeus Exchange is here to help investors diversify. There are plenty of exchanges out there, but Zeus is the first exchange that is not only fully complied with legality, but also will allow investors to diversify via asset tokenization. Institutional investors who had been holding onto company shares could now diversify with cryptocurrency and vice versa. It will make it safer for everyone with a secured platform and quick liquidity. Try it out today!