Crypto FOMO could cost you

Late last week KokoSwap, a little-known cryptocurrency, made global headlines when it registered a bizarre 76,200 per cent rise in one day. Experts attribute the spike to the surging popularity of NFT gaming. NFTs or non-fungible tokens are digital assets that represents real-world art, music, videos etc, which can be sold and bought online. NFTs are transforming the online gaming industry because it allows gamers to play and earn, becoming pivotal players in the gaming economy. Cryptocurrency refers to decentralised digital money thats used to purchase assets, the most popular and the first of which was Bitcoin. Thousands of such currencies are in circulation, and those looking to invest and make quick money seem to be turning away from SIPs and gold to this risky but enticing asset class. So, how exactly can you make money? Firstly, you can invest or trade in the crypto exchange market. For this, you will need to use your real-world funds to buy digital currency, just like you would to buy gold or stocks. You can also use the currency you own to stake and lend to the system or other users. Thirdly, you can participate in the blockchain system by mining or receiving coin rewards for work that you do in the system or virtual world. While quick money seems to be the draw, sceptics caution that because unlike legit national currencies, no central authority controls the value of cryptocurrency, it is left to the currencys users on the Internet to control it. Confused? Let the experts guide you. ‘Invest very small amounts over a long period Prashanth Irudayaraj, Vice president, R&D, Zebpay (Indian cryptocurrency exchange)Weve seen youngsters get into crypto first, and now the trend is reaching everyone. Crypto is for everyone and there are a number of reasons why this is an exciting field. The Blockchain, as a technology, and a financial market, is in its initial phase. We are seeing this technology being used as a tool for shaping a new financial system with properties like public ledgers, triple entry bookkeeping and decentralisation. For example, we see more people consider Bitcoin as a digital gold with its absolute scarcity and global acceptance. When it comes to crypto as an industry, it is not just about the coins as an asset class, but the future possibilities are massive as its going to bring many innovations and solutions in different sectors. Since the market is still in its early stages, you have high volatility in prices and a large pool of coins available to invest in. We recommend starting small with the well-established coins like Bitcoin and Ethereum and do that over the long termthat is invest with small amounts in small increments, over a long time. ‘Invest only if you are young or have cash to spare Preeti Zende, Founder, Apna Dhan financial planning servicesTHE pandemic added to the cryptocurrency craze since the economic downturn led people to seek out quick money. The traditionalists tapped into stocks. The younger lot wanted to experiment with crypto since they are keen to see high returns and fast. The downside to risk is that you can lose it as fast as you make it. Do not go into investing blindly, especially since no single authority regulates digital currencies. Resist the FOMO. If you do choose to invest, the percentage of investment should be in accordance with your overall investment portfolio, and your earnings. Id recommend investing in crypto if you are young, and have only that much to risk. You can also learn as you go along. You can also opt for it if you are already measuring up on your goal-based investment, and have some leftover to take a risk. Middle-aged individuals without any extra margins in your earnings, and without safe investments, should stay away. ‘It will change how humans transact Tanvi Ratna, Founder & CEO, Policy 4.0 (Digital currency policy research body)Bitcoin is the highest performing asset of all time. But its a very risky asset. There are no regulations to govern it, which means your investments are not safeguarded. Its value can crash, or the project you invest in, can vanish with your money. But its also a sunrise industry, a burgeoning sector in its infancy thats showing all the signs of rapid boom. If you understand how it works, you can manage good returns. Its the future of investment, so I would recommend reading up enough on it and educating yourself first. It is gradually changing how human being carry out transactions. It could become for finance what the Internet was to communication.

Crypto FOMO could cost you

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