With any hot investment, there are always trading myths that accompany them.
Cryptocurrency is no exception.
The biggest misconception is that it’s far too late to start investing in cryptocurrency. However, that’s not the case at all. In fact, after the U.S. SEC delayed its decision on a Bitcoin ETF, many coins have pulled back to bargain prices, at least temporarily.
The second misconception is that cryptocurrency is a passing fad.
Again, that’s just not true. Cryptocurrencies “are unlikely to disappear completely and could easily survive in varying forms and shapes among players who desire greater decentralization, peer-to-peer networks and anonymity, even as the latter is under threat,” JPMorgan said.
Three, investors believe it’s nothing more than a house of cards.
Just like any other asset, cryptocurrency certainly has its own share of issues. But even the doubters have to admit that its applications have been game-changing. In fact, blockchain technology is already creeping into healthcare as a way to store and safe-keep patient records.
Barely a day goes by without a reminder of how banks are using blockchain to transform transactions. Not only does the technology remove the need for middlemen, it can speed up transactions and increase trust among users.
The best part – it may just save banks billions of dollars.
Four, the security threats make this a useless investment.
While there are certainly plenty of hacks and stolen coin stories, a big contributor is a lack of security practices by investors. Each investor is always given a private key that provides access to their own personal wallet. When that key is exposed, owners run a risk of theft.
Also, the blockchain, a public ledger of all Bitcoin transactions, has never been hacked.
The big banks are attempting to help institutions with trust issues, too.
That’s because Goldman Sachs may offer custody services for cryptocurrency funds. That means Goldman would hold the securities on behalf of the funds, which then cuts the risk for clients worried about potential loss.
Five, no merchants will ever accept cryptocurrency.
This is a personal favorite because of how laughably wrong it is.
Expedia, Subway, PayPal, and Microsoft are just a few of the companies that already accept cryptocurrency payments. Even Overstock.com announced their acceptance of cryptocurrencies as a form of payment. They now accept Bitcoin, Ether, Litecoin, Dash, and Monero, for example. Whole Foods, Bloomberg, BigFishGames, Dish Network, and Intuit accept it, too.