Cryptocurrencies are gradually conquering minds, hearts and wallets. The possibility of a direct exchange BTC to ETH in a dozen ways is no longer particularly surprising. In some countries, the number of cryptocurrency holders already exceeds 50% of the adult population. And yet, for the vast majority of earthlings, cryptocurrencies are still little understood.
The youth of the cryptocurrency market is fertile ground on which legends, myths, horror stories and other examples of folklore grow wildly. We will focus exclusively on myths, frightening and not so.
Myth 1. Crypto is a bubble
In 2010, the price of bitcoin was less than $1, and now it has broken through the $30,000 mark again. There are also other cryptocurrencies whose prices have risen hundreds and thousands of times. Such a rapid growth formed the basis of the myth that cryptocurrency is a bubble that will definitely burst, and investors will lose all their money.
But what is a bubble? This is an economic cycle when the value of an asset rises unsustainably. The most famous bubbles in history are the notorious “tulip fever” in the Netherlands in the 17th century and the dot-com bubble in the early 2000s. By the way, the price of the most expensive tulip in terms of modern money was close to $55,000.
And yet, during its existence, the cryptocurrency market has already gone through several cycles, when the value of digital assets either rose or fell. But after each fall, Bitcoin and other cryptocurrencies reached new price records. Such fluctuations in asset prices are typical of young markets and over time they stabilize and become more predictable.
Myth 2. Cryptocurrencies are nothing more than a passing fashion.
Just a few decades ago (in fact – at the end of the last century), computers and e-mail were of interest only to a very narrow circle of technology lovers. When Steve Jobs said that computers would soon be in every home, he was asked with skepticism: “Why are they needed there?”.
Cryptos are experiencing the same thing now. So far, a relatively small number of people use them, but modern cryptocurrencies create entire ecosystems. And according to analysts, they will continue to develop and find practical application in the real economy.
There is a growing interest in decentralized finance programs that are safer, more reliable, and cheaper than current systems. Tech giants are exploring ways to connect the real and digital worlds, and take blockchain technology as the basis. States are no longer only thinking about creating their own cryptocurrencies, but are also actively testing digital versions of state currencies. Therefore, virtual assets will evolve and change, but will not disappear anywhere, just like the technologies on which they are based.
Myth 3. You need to have a lot of money to buy cryptocurrency
Most people learned about cryptocurrency when the price of bitcoin reached tens of thousands of dollars. Buying a whole coin has become inaccessible to investors with a small budget.
However, you don’t have to have an “extra” million dollars. All services allow you to buy shares of bitcoin or other cryptocurrencies. The minimum amount that can be spent to buy cryptocurrencies can vary from platform to platform, but is usually only a few tens of dollars.
By purchasing a share of bitcoin or another cryptocurrency, you can also profit from their growth, just like those who operate in tens of thousands of dollars. If the value of an asset doubles, then the investment of everyone who holds it also doubles. The same thing happens in the event of a fall in the value of cryptocurrency. However, 100% profit from $100 in absolute numbers does not look very impressive.
Myth 4. Cryptocurrencies are predominantly used by criminals.
Chainalysis, a blockchain analysis company, has found that less than 1% of all crypto transactions involve illegal activity. Basically, such transactions were used for fraud, but not for the sale of weapons, drugs or money laundering.
The governments of leading countries are taking measures to prevent the use of cryptocurrencies in illegal transactions. Special legislation and agencies have been created that control the cryptosphere. Most major exchanges require data verification to strengthen the fight against illegal activity. There are fewer and fewer platforms where you can exchange SafeMoon to BNB without KYС. In the future, legislative requirements for working in the cryptosphere will only become tougher.
Myth 5. Everyone who buys crypto will become a millionaire
Many have heard stories about how people bought Bitcoin for a few hundred dollars and became millionaires after a few years. This really happened with other cryptocurrencies, which grow tens or hundreds of times. However, this does not mean that everyone who buys cryptocurrency will necessarily get rich.
It should be remembered that cryptocurrencies are risky assets that can both rise in price and fall in price. There are orders of magnitude more stories of ruin on the crypto, but they are not particularly known. In addition, the volatility of digital assets is higher than that of stocks, real estate or fiat currencies. Therefore, experts recommend investing in cryptocurrencies from 5% to 10% of their savings.
