You might be at the dinner table, sizzling up the barbecue, or making small talk with a colleague at work, and suddenly the conversation stalls. All eyes will be on you, the resident crypto enthusiast, and before you know it, someone will be asking the inevitable question. “So…what about that crypto?” If you’ve ever convinced someone to join Team Crypto, this scenario will be familiar to you. Sometimes the questions asked can cause a big discussion. However, sometimes they are simply naive or misinformed.
1. “When does the bull run start?”
This question will trouble any experienced crypto investor. Cryptocurrency trading can be thrilling, but it can also be unpredictable.
While it’s important to understand the overall trends that asset cycles follow (more on that here), there’s really no foolproof formula for predicting when the next bull market will begin. Importantly, it’s rarely smooth sailing through each stage of the market, and there can be bounces, pullbacks, and (hopefully) significant volatility along the way up.
Even the Federal Reserve’s recent decision to cut interest rates by 50 basis points instead of the expected 25 basis points is making investors rethink everything. From changes in the global economy to geopolitical events (presidential inaugurations, wars, pandemics, take your pick), market confidence can be a wild card. Prices can skyrocket or plummet overnight. The key is to never invest more than you can afford to lose and to always have a strategy in place. Do you want to make a profit at a certain price or build a long-term savings pot? Do your own research, and if you’re still unsure, consult a professional.
2. “Aren’t cryptocurrencies just a scam for criminals?”
Ah, the old stereotype. Indeed, during Bitcoin’s early days, the cryptocurrency had quite a reputation for shady transactions. However, the universe has evolved by leaps and bounds. Today, cryptocurrencies power everything from secure decentralized finance (DeFi) platforms to cross-border money transfer systems, and are even helping emerging economies avoid broken financial systems.
The truth is that blockchain’s transparent and immutable public record of transactions (ledger) is often the last place criminals want to hide. With increasing regulation and strict Know Your Customer (KYC) requirements, using a trusted exchange for your cryptocurrency transactions can help keep your assets and personal information safe. (TLDR: Cryptocurrency is for everyone, not just criminals!)
3. “So, would you mind buying me some coffee with it?”
Oh, this is good! Sure, more places are accepting cryptocurrencies (yes, you can technically buy coffee with Bitcoin!), but that’s not the only thing that matters. In addition to their myriad everyday uses, cryptocurrencies are useful investment vehicles and, similar to gold, can be thought of as long-term stores of value in digital form. The idea of paying for your daily latte with cryptocurrency sounds cool, but most investors aren’t exactly pouring BTC or ETH into a cappuccino. It’s more about building wealth. Don’t spend money on coffee. (As a side note, it is worth considering stablecoins as a good “middle ground” between fiat and cryptocurrencies. Read more here.)
4. “Should I invest my life savings in cryptocurrencies?”
This is the ultimate frown when it comes to crypto queries. No experienced investor would recommend investing their entire lifetime savings in a single asset class, especially one as volatile as cryptocurrencies. Bull markets are exciting, but cryptocurrencies are a high-risk, high-return game, and getting good advice on diversification is a good idea.
5. “Are cryptocurrencies just a bubble waiting to burst?”
This question reflects classic skepticism. There was a bubble (hello, 2017!), but cryptocurrencies have matured and are now supported by large institutional investor interest, from hedge funds to tech giants. (Most big technology advances have bubbles along the way to mainstream adoption.) Blockchain technology isn’t going anywhere. Whether you live up to the hype or not, the underlying technology is here to stay.
6. Which cryptocurrency should I buy?
There is more to cryptocurrencies than Bitcoin, and each type has its own purpose and value. But this is so personal that it’s hard to tell someone which one to buy. That’s why it’s so important to do your own research. Exploring different cryptocurrencies can help you understand which ones fit your goals and how they work together within the larger digital economy. This is no different than analyzing which stocks to invest in. You should ask how long the company or token has been around, what its use case is, and research product-market fit, track record, and team. (Learn more about the crypto coins sold by Easy Crypto here.)
One last point
Cryptocurrencies are exciting, fast-paced, and constantly evolving. But it’s not about instant wealth or avoidance from criminals. The next time the conversation dies down and you want to ask a crypto-savvy friend a question, consider avoiding these minefields and adding something more interesting to the discussion about crypto potential and the latest interesting use cases. How about that?
Disclaimer: Investing in cryptocurrencies involves risk. Always do your own research or seek professional advice. Terms and conditions apply
