Is The Crypto Market Bouncing Back Here s What You Need To Know
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In July, the cryptocurrency market bounced back to a (the total dollar market value of crypto today) for the first time in recent months. But while the market looks healthier than just a couple of weeks ago, it's still far from last November's peak, which reached $3 trillion. In an economy with and , is crypto still a worthy investment?
After bullish highs in 2021, cryptocurrency dropped to pessimistic lows this year, tumbling into territory which investors are dubbing another "crypto winter." The $2 trillion crypto market crash wiped out investor gains, cost thousands of people their jobs and obliterated once staple digital currencies, including the crypto token luna, which lost all of its value following .
While crypto is starting to trend upward, volatile highs and lows are nothing new in the crypto markets -- and skeptics have long characterized crypto as an empty bubble destined to burst. Critics have called , and simply a new digital version of an old con primed to . But investors see the world of digital coinage as a step forward, a kind of "Money 2.0" that will democratize finance and . Amid the seesawing prices and teetering sentiments, one thing hasn't changed: Cryptocurrency remains controversial, risky and wildly volatile.
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What are the risks of investing in crypto?
Before investing in crypto, you should know there's almost no protection for crypto investors. And since this virtual currency is extremely volatile and driven by hype, that's a problem. It's easy to get caught up in tweets, TikToks and YouTube videos touting the latest coin -- but the adrenaline rush of a market spike can easily be washed away with a dramatic crash.
You should be on the lookout for crypto . One often-used scheme is a , in which scammers encourage people to buy a certain token, causing its value to rise. When it does, the scammers sell out, often pushing the price down for everyone else. These scams are prominent, and they took in more than in 2021.
From the US government's current policy perspective, you're on your own. At this time, the government provides no deposit protection for crypto as it does for bank accounts. This may change following , which directed government agencies to the risks and potential benefits of digital assets.
So far as we can tell, only one company offers : , with a Crypto Shield offering that promises to cover your accounts from hacks. Other companies, such as Coincover, provide theft protection, which alerts you if there's suspicious activity on your account. Coincover maintains an insurance-backed guarantee that if its technology fails, it will pay you back up to the amount you're eligible for, which depends on the level of protection the wallet you use offers. (Neither Coincover nor Breach Insurance will cover you against scams.)
Despite all the hype, scams, periodic crashes (and persistent risks) in this market, Cesare Fracassi, who runs the at the University of Texas, Austin, still thinks crypto has a viable future.
"I think crypto holds a possible solution to some of the problems of the traditional financial sector," Fracassi said. "The current, traditional financial system is noninclusive, it's slow and expensive and incumbents, including large banks and financial institutions, basically have a lot of control. I think crypto is a venue through which you can actually break the system."
How do I start investing in cryptocurrency?
If you're considering buying crypto now, as prices have dipped, it's worth noting that there's no guarantee the market will recover. But the simplest way to get your feet wet with crypto investments is to use US dollars to buy a cryptocurrency using a popular exchange like , or . A handful of well-known payment apps — including — will let you buy and sell cryptocurrency, though they generally have limited functionality and higher fee
>Whether you're using Coinbase, Binance, Venmo or PayPal, you'll be required to provide some sensitive personal and financial information... including an official form of identification. (So much for
>Once your account is set up, it's simple to transfer money into it from your bank. And the barrier to entry is quite low: The minimum trade amount is $2 on Coinbase and $15 on Bina
>Read more: What percentage of my portfolio should be in crypto?>Crypto is so new, there isn't enough data yet to decide how much of your portfolio "should" be in cryptocurrency, according to Fraca
>"We need decades of returns in order to understand whether a specific asset is good in a portfolio," Fracassi said. "We know that on average stocks return about 6% more than bonds. That's because we've had 60 to 100 years to see the average returns on stocks and
Like all investment decisions, how much you pour into crypto will depend on your risk tolerance. But investment professionals suggest that investors keep their exposure low, even for those who are all in on the technology. Anjali Jariwala, a certified financial planner and founder of , recommends that clients allocate no more than 3% of their portfolio to
If I make money on crypto trades, do I have to pay taxes?>Yes. Whether you're buying, selling or exchanging crypto, the IRS wants to know about it. Your depends on your particular situation, but crypto investments are broadly treated like other investments, including stocks and bond
>You don't need to report crypto on your tax return if you didn't sell or exchange it for another type of crypto. Buying and holding also doesn't need to be reported. If you did sell or exchange crypto, though, you'll need to report any gains or losses realized, just like you would for stocks and bond
>Adding crypto trades won't make your tax return any easier. But like , and now connect with wallets and exchanges to automatically track your cryptocurrency holdings, sales and tr
Is there a way to learn about crypto without investing in the currencies themselves?>Buying tokens is the most straightforward approach to experimenting with cryptocurrencies. But other opportunities exist for exploring the crypto world while potentially protecting your money from seesawing swing
>Here are a handful of alternati
>Buy shares of crypto companies. Many companies in the crypto space are publicly traded. Buying shares of Coinbase Global or rather than of the coin itself allows you to benefit from the business proceeds of these companies, which are in part generated by crypto. You can also buy shares of companies that make crypto-related hardware, such as Nvidia and
>Invest in crypto ETFs or derivatives. , or ETFs, are available for crypto. ETFs are baskets of securities, such as stocks, commodities and bonds, that follow an index or sector, in this case, crypto. Futures and options are also available for some crypto products, though these advanced types of investment vehicles come with thei
Get a job in crypto. LinkedIn, Indeed and Monster list thousands of jobs in crypto. Whether you've got a traditional finance background or you're a software engineer, there's a boom in the blockchain labor 해외선물 사이트 market. There's also , a job board dedicated to bl
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br>s.Whether you'll plunge into crypto waters is ultimately up to you, but bear in mind it isn't the only place to start your investing journey. And beyond crypto, there are other digital assets to consider, too, including . But if you do take the plunge, be sure to invest in a to keep your digit
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