The Threat of Fraud Is Keeping Some Investors Out of Crypto. Here's Why I'm Investing.
Crypto markets remain volatile. But over the last year or so, the prices of most major cryptocurrencies like Bitcoin (CRYPTO: BTC) have skyrocketed. This has drawn unprecedented attention from investors and the wider world. Yet despite the huge price gains, many investors remain on the sidelines due to worries about crypto scams and fraud schemes. These fears are not unfounded. According to new research from The Motley Fool, "Investment scams are costing consumers millions, and cryptocurrency is a top payment method."While the threat of fraud is keeping many investors out of crypto, I'm still a big believer in cryptocurrencies. There are two main reasons I'm staying invested.There's an old saying in the finance world: Currency is the bubble that never pops. Well, not never. Throughout history, several currencies have imploded due to hyperinflation or governmental collapse. But in general, when they are in use, currencies have stood the test of time. Most global currencies today are considered fiat currencies. That means that they are backed by nothing but the social understanding that they are worth something. The U.S. dollar, for instance, do not have any direct value relation to gold or silver. You can't trade it into the Federal Reserve for a certain commodity or tangible good. The U.S. dollar retains its value because we all agree that it has value.Continue reading
Crypto markets remain volatile. But over the last year or so, the prices of most major cryptocurrencies like Bitcoin (CRYPTO: BTC) have skyrocketed. This has drawn unprecedented attention from investors and the wider world. Yet despite the huge price gains, many investors remain on the sidelines due to worries about crypto scams and fraud schemes. These fears are not unfounded. According to new research from The Motley Fool, "Investment scams are costing consumers millions, and cryptocurrency is a top payment method."
While the threat of fraud is keeping many investors out of crypto, I'm still a big believer in cryptocurrencies. There are two main reasons I'm staying invested.
There's an old saying in the finance world: Currency is the bubble that never pops. Well, not never. Throughout history, several currencies have imploded due to hyperinflation or governmental collapse. But in general, when they are in use, currencies have stood the test of time. Most global currencies today are considered fiat currencies. That means that they are backed by nothing but the social understanding that they are worth something. The U.S. dollar, for instance, do not have any direct value relation to gold or silver. You can't trade it into the Federal Reserve for a certain commodity or tangible good. The U.S. dollar retains its value because we all agree that it has value.
