Despite cryptocurrency continuing to gain popularity, not everyone feels comfortable diving into this investment. It’s a relatively new and unknown asset that’s surrounded by question marks for many people, but that doesn’t mean it’s not an investment worth exploring. Similar to other cutting-edge technologies, cryptocurrency wasn’t immediately accepted with open arms. Maybe you’ve been meaning to get involved and research more about how it can benefit you, but you weren’t sure where to start. Our accountant for cryptocurrency is here to help guide you through any fears that you have and assist you in feeling confident in your transactions.
Cryptocurrency skeptics are nervous to invest not only because they don’t understand crypto, but also because they believe it is too volatile. The trades are nonstop and faster than in any other market, leading to constant price fluctuations. For example, in 2017, the price of BTC rose from $1,000 to $20,000. By the time mid-2018 rolled around, the price fell back to $5,000. Still, this is an asset that isn’t going away any time soon and there are steps that you can take to feel more comfortable. Our team at Founder’s CPA has outlined some tips to help you overcome any fears that you have.
Knowledge is power. One of the easiest ways to become more comfortable with cryptocurrency is through education. If you don’t understand the market and how it fluctuates, you won’t want to put your money behind it. Don’t just think of cryptocurrency as a digital currency, think of it as an asset that has overlapping characteristics with other traditional investments. If you see that prices are coming down and you’re tempted to sell, don’t panic. Know that the prices can swing drastically in short periods of time. Of course, you can always talk with an accountant for cryptocurrency for professional guidance.
Even though Bitcoin is the most popular type of cryptocurrency, there are actually over 2,500 options at your disposal. Other popular options include Litecoin and Ethereum, but it could be worth researching the different options that you have beforehand. Don’t take this research lightly; you’ll want to do a deep dive to see whether you’re investing in something that is legitimate before putting your money behind something.
Previous instances of panic, such as when you sold your Bitcoin in a moment of doubt, can provide learning moments for you. In reality, the price of Bitcoin sharply rose as soon as you sold your asset. Even though you likely don’t want to relive these moments, you must be able to reflect on them and learn from your mistakes.
Even with the right education, you can’t be successful 100 percent of the time. The ups and downs of cryptocurrency are what make it both risky and rewarding. Go into your investment knowing that it’s impossible to be profitable at all times and to accept the losses as they come. In the same vein, know that losses can swing the other way eventually and result in wins that you can celebrate.
Finally, seeking the guidance of an expert can help you overcome your fear. Many seasoned professionals study the cryptocurrency market and can help you navigate your questions. This is always a great strategy that can make you feel more comfortable with your investment.
At Founder’s CPA, we know that you might not feel comfortable out of the gate with your cryptocurrency investments. Allow our team to step in and help you with cryptocurrency accounting and taxation. We can help with your accounting system setup, tax calculations, and so much more. Contact us today to get started.
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