Cryptocurrency is all the rage these days, with terms like crypto millionaires and NFTs (non-fungible tokens) on everyone’s lips. Since we all like quick cash, investing in crypto is something we should consider. If you need some capital to start investing, Galaxy Credit is a 24-hour money lender in Singapore that is fully licensed and widely trusted.
In this article, we explain what exactly Crypto is, what its risks and benefits are, and whether you should invest in it. If you are looking to make some quick cash to either pay loans or increase your net worth, crypto could be just what you are looking for.
What is Cryptocurrency?
A cryptocurrency is a form of payment that can be exchanged online for goods and services. The most famous of them is Bitcoin, which was invented in 2009 by an anonymous person. It works via blockchain technology, which transmits data and records transactions. Also, cryptocurrencies are decentralised, which means they are outside the authority of governments and banks.
Many companies, including a few Singaporean ones, issue their own cryptocurrency, also called tokens, which can be used to buy goods or services that the said company provides. There are currently more than 10,000 different cryptocurrencies being traded publicly. All cryptocurrencies also have the same value in every country and there are no exchange rates.
There are three main ways to hold cryptocurrencies. All involve having a “wallet”, which is an account that holds your crypto. Firstly, you can hold them on exchanges such as Binance or Coinbase. On such platforms, you will be issued a “hosted wallet”, so-called because these platforms hold the wallet. The second way is to have a “non-custodial” wallet, which means you have full control over your crypto. The downside is that if you lose your password, the wallet is gone forever. Lastly, the “hardware” wallet. Unlike the previous two options, a hardware wallet is a physical device the size of a thumb drive that stores your crypto. The upside is that you cannot be hacked since this is offline, with the downside being an inconvenience.
So, how do you make money? Much like stocks, the value of your portfolio increases when the price of the crypto token/s you hold rises, and vice versa. In other words, you make money when you sell the crypto tokens at a profit.
As with most investments, there are risks. Crypto is known to be more volatile than stocks or gold, which is why it would be good to keep a healthy capital at bay so that you may buy more when it drops and sell when it’s at a higher price. For quick cash to capitalise on buying the dips, Galaxy Credit offers the fastest personal loans in Singapore, as well as flexible repayment programs that fit your budget. Furthermore, our personal loan process is streamlined and efficient, leaving you with more time to monitor the market.
There is also no sure-win crypto token. Although there are many established tokens with reputable companies behind them, the market is very competitive, with many tokens getting unlisted every few months. If you happen to hold such tokens, you lose all their value.
Another risk is vulnerability to hacks and criminal activities. For example, if your crypto is stored on an exchange, hackers can hack into your account and transfer your assets to their accounts. Since crypto is untraceable, it would be impossible to recover your crypto tokens.
Lastly, there are scams. These tokens are often either hyped-up to offer extremely good services, such as giving you a percentage of their earnings, or entice you to invest by a tactic called “pump and dump”. “Pump and dump” happens when a token suddenly rises many times in value, attracting you to buy at an already high price. Once enough people buy at a said high price, the manipulators will “dump” the price by selling all their tokens, leaving you at a great loss. You may end up needing to pay loans that you have borrowed to buy such tokens looking for quick cash.
Many see cryptocurrencies as the currency of the future. We may end up using coins like Ethereum or Bitcoin to pay our monthly bills, or to procure certain products or services. Hence, buying these coins now can be considered a long-term investment.
There is indeed such a thing as making quick cash. In May 2020, Bitcoin’s price was about USD $9,500. Today, it is about USD $33,000. Many coins have grown exponentially over just a few days, such as DogeCoin, which often pumps dramatically due to a tweet from billionaire and Dogecoin fan Elon Musk.
The technology behind crypto, blockchain, is also why many people believe in digital currency. This technology is touted to be able to revolutionise industries from shipping to gaming. Having many believers and potential, it is thus safe to believe that cryptocurrency is not a fad and will only become more important as time goes on.
Lastly, cryptocurrencies have high liquidity. This means that you can sell or buy them very quickly at market price. For example, if you need money to pay loans, you can simply liquidate your tokens for fiat, which is a term for real-world money. Otherwise, visit a 24-hour money lender in Singapore such as Galaxy Credit, which responds swiftly to your financial needs.
Should You Invest In Crypto?
Yes, at least a little, and always within your means. It is important to remember to never invest more than what you could comfortably afford to lose.
Investing in crypto means you are diversifying your portfolio, which is always a good thing. This is especially true if you believe in the technology behind the tokens that you buy, and also that crypto usage will become more widespread as time goes by.
For more financial insights or needs, visit Galaxy Credit, a 24-hour money lender in Singapore, anytime, any day.