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Is Cryptocurrency Safe? Here Is What You Should Know.


Deciding to invest in Cryptocurrency can reap huge rewards and significant risks

Is Cryptocurrency Safe? Here Is What You Should Know.

November 11, 2020

Many are unsure if Cryptocurrency is safe. We all want to make safe investments. What is the general consensus on Cryptocurrency? Well, according to the Washington Post, Warren Buffet called Cryptocurrency (a legend in the investment world) “rat poison squared.”

Some of you may have heard of Cryptocurrency but are still asking what exactly Cryptocurrency is? According to the Federal Trade Commission’s Bureau of Consumer Information, “Cryptocurrency is digital money. That means there’s no physical coin or bill — it’s all online. You can transfer Cryptocurrency to someone online without a go-between, like a bank. Bitcoin and Ether are well-known cryptocurrencies, but new cryptocurrencies continue to be created.” Some investors see Cryptocurrency as a new way of innovating how we use currency. 

In what scenarios would you use Cryptocurrency? The Federal Trade Commission’s Bureau of Consumer Information states that the use of Cryptocurrency may include “… quick payments and to avoid transaction fees. Some might get cryptocurrencies as an investment, hoping the value goes up. You can buy Cryptocurrency with a credit card or, in some cases, get it through a process called “mining.” Cryptocurrency

is stored in a digital wallet, either online, on your computer, or on other

hardware.” Cryptocurrency presents itself as an answer to multiple problems.

However, is Cryptocurrency a safe investment? The Washington Post attributes some reasoning for Buffet’s rat poison comments by explaining that “Besides the massive price swings, Bitcoin and other cryptocurrencies have been connected with scams, money laundering, tax evasion, cyber thefts, excessive speculation and more. Risks like these may have been easier for regulators to overlook when Bitcoin and its peers sat on the far fringes of finance, but they are moving ever closer to the mainstream, particularly in crypto’s newer forms.” This new, digital form of currency presents many problems that are yet to have present solutions. 

According to The Washington Post, many countries are wary of Cryptocurrency. The Washington Post states that “Their [cryptocurrency] approaches have run the gamut, from a largely hands-off system in Switzerland to the toughness of China, which banned crypto-asset exchanges in 2017 and blocked access to overseas trading platforms. Most countries, notably the U.S., are in the process of formulating a comprehensive regulatory strategy. U.S. prosecutors are investigating manipulation of the price of digital currencies. New York Attorney General Letitia James in April began a case against crypto exchange Bitfinex, claiming it hid the loss of more than $850 million of client and corporate funds.” Cryptocurrency still presents itself as a wild west scenario in the world of investing as little legislation has been put in place.

Deciding to invest in Cryptocurrency can reap huge rewards and significant risks. The Federal Trade Commission’s Bureau of Consumer Information urges consumers to know that there are a variety of cryptocurrency scams and encourage you to look out for “guarantees that you’ll make money, promises big payouts that will double your money in a short time, promises free money in dollars or cryptocurrency, makes claims about their company that are not clear.” Whether it is cryptocurrency scams or consultation services, Synergy is here to help with the smallest to largest, most comprehensive solutions.

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