The crypto market has seen tremendous growth in recent years, but it has also been met with scepticism and mistrust. With volatile prices, numerous hacks, and fraudulent activities, it’s understandable why some people are hesitant to trust the crypto market. In this article, we will examine the reasons why people may not trust the crypto market, and why, despite the risks, it’s still worth considering as an investment option.
The Volatility of Crypto Prices
One of the main reasons people may not trust the crypto market is the volatility of crypto prices. The value of crypto assets can fluctuate dramatically in a short period of time, making it a risky investment. For example, in December 2017, the price of Bitcoin reached an all-time high of almost $20,000, but by December 2018, it had dropped to around $3,200.
However, it’s important to note that volatility can also be a good thing for investors who are willing to take on more risk. The crypto market has the potential for significant returns, and many investors have made significant profits by buying low and selling high.
Another reason people may not trust the crypto market is the number of hacks and fraudulent activities that have occurred. The anonymity of the crypto market makes it a prime target for hackers, who can steal crypto assets with relative ease. Additionally, fraudulent activities such as Ponzi schemes and exit scams have also been reported in the crypto market.
It’s true that the crypto market has seen its fair share of hacks and fraudulent activities, but it’s important to remember that this is not unique to the crypto market. Any market, whether it be traditional or digital, is vulnerable to fraud and hacking. However, by being vigilant and doing your own research, you can minimize the risks of falling victim to these types of activities.
Lack of Regulation
Another reason people may not trust the crypto market is the lack of regulation. The crypto market operates outside of the traditional financial system, and there are currently no global regulations in place to govern it. This lack of oversight can make it difficult for investors to protect their assets and can also lead to fraudulent activities.
While it’s true that the crypto market currently lacks regulation, it’s also important to note that this is changing. Governments around the world are beginning to recognize the potential of the crypto market and are starting to implement regulations to protect investors and prevent fraudulent activities.
The Potential of the Crypto Market
Despite the risks, it’s important to remember the potential of the crypto market. Blockchain technology, the underlying technology of crypto assets, has the potential to revolutionize the way we conduct business and transfer value. Additionally, the decentralization of the crypto market allows for more secure and transparent transactions.
Furthermore, crypto assets such as Bitcoin have shown to be a hedge against inflation, as the supply of Bitcoin is limited and cannot be printed by a central bank, this makes Bitcoin and other crypto assets a good option to store value in the long term.
The crypto market is not without its risks, but it also has the potential for significant returns. The volatility of crypto prices, hacks, and fraudulent activities are all valid concerns, but they are also present in traditional markets. As with any investment, it’s important to do your own research and understand the risks before investing. The crypto market is still in its early stages, and as the market matures and regulations are put in place, it will become more trustable.