Cryptocurrencies are used as a direct financial exchange between users without the involvement of third parties or others.
Scienceloversss - Actually, cryptocurrency investment has been around for a long time. However, not many people are interested in this type of investment.
Although there are, still tend to be small in scope, not like stock investments that are popular in the community.
Cryptocurrency investment itself began to appear on the surface when many people flocked to buy bitcoin a few years ago.
For those of you who intend to make this investment, it's actually okay.
But, you need to understand, if in this investment you have to prepare yourself to feel the shock-like riding a rollercoaster.
It could be that the price goes up to thousands of dollars in one day, then drops significantly the next day.
Take Bitcoin for example, in 2017 the price rose $14,000 per coin, then fell to below $3,500 per coin in early 2019.
But since the start of 2021, Bitcoin has gone up again to over $20,000.
Before you start investing in cryptocurrency, first, let's understand the ins and outs!
What is Cryptocurrency?
Before starting to invest, please note that Cryptocurrency is a digital currency that is usually used exclusively online.
Cryptocurrencies are used as a direct financial exchange between users without the involvement of third parties or others.
You could say, crypto is a means of payment for traditional means such as cash, checks, and credit cards.
Uniquely, cryptocurrency is global so in any country, it will have the same value. No need to worry about the exchange rate difference.
Many say that cryptocurrency is closely related to the dark world in online media.
Actually not really, but many think that way because the information used in the system is highly stored through the use of encryption techniques.
The existence of this method will make the activities or transactions carried out secret and difficult for outsiders to access.
This currency is different from digital money such as credit, debit, or other e-wallet cards because crypto has its own value while the things above are of course still related to rupiah currency and certain banking services.
Cryptocurrency as an Investment?
Although crypto itself is a form of currency, many people see it as cryptocurrency investment.
Well, many think that crypto has value to be used as an asset, the same as when investing in dollars or forex.
Before knowing why, why do people want to invest in cryptocurrency as one of the instruments?
So, money itself is a representation of the value we exchange with each other for goods/services.
Well, the reason is that paper money does not always have intrinsic value, because it is only valuable if the people who use it agree that it is valuable.
In fact, our currency alone is the rupiah, the value of the currency will change following the existing inflation.
While Crypto is seen as an alternative investment because it can act as an alternative to money, it also has valuable value-added possibilities in the future.
Cryptocurrency Investment Risk
Before starting to invest in cryptocurrency, it's a good idea to know how risky this instrument is.
Knowing this risk will make you more careful in doing it so you don't make a wrong move.
Keep in mind that every investment instrument has risks, big or small.
1. Very Fluctuating Market
The phenomenon of the increase and decrease in the exchange rate of cryptocurrencies is considered to occur so quickly.
The value can be very high, but after that, it can drop sharply.
Like stock investments, cryptocurrency investments have the characteristics of High-Risk High Return.
2. Vulnerable to Cyber Crime
Cryptocurrency itself is technology-based, therefore this investment is very vulnerable and open to cyber attacks.
Meanwhile, hacking is a serious risk, as it can be hard to get if your crypto is lost or stolen.
Many reports show that many buyers have lost their investment due to being hacked.
If you want to find out more, try checking on the intermediary for exchange burglary cases in various countries, especially in 2019.
In fact, until there is a special site that records all occurrences of cryptocurrency investment hacks.
3. Lack of Regulation
Regulations regarding cryptocurrency are still quite new in Indonesia.
Although this regulation provides legality for this investment to be solid in Indonesia, there are also a number of provisions that can pose risks to customers.
Meanwhile, one of the provisions that create intrigue is the provision that the exchange can be registered as a "Prospective Crypto Asset Physical Trader", then after a maximum of 1 year apply to become a "Crypto Asset Physical Trader".
The application after 1 year, can be rejected by CoFTRA.
If later rejected, the registered status must be revoked and must return/transfer the member's crypto assets to another exchange.
Meanwhile, the exchange process after 1 year from being registered can cause difficulties for customers.
The reason is that the customer must take care of the transfer of assets, and ensure that the closed exchange fulfills obligations.
4. Liquidity of Different Assets
Please note that currently there are around 8,500 types of crypto assets with very diverse levels of liquidity.
If it is less liquid, then of course the customer will have difficulty in selling it.
Therefore, CoFTRA only allows 229 selected crypto assets, based on market capitalization, blockchain system governance, security, and system scalability.
Future of Cryptocurrency
Cryptocurrency investment opportunities in the world can be fairly large because more and more people are interested in it.
In fact, in 2025 it is estimated that crypto market penetration in Indonesia will reach 28 million people, or 10% of the population of 276 million.
Who would have thought that in 2015, the crypto market was only 0.1 million people?
Then, until 2020, it reached 0.8% of the population of approximately 2 million people.
Many have analyzed that the crypto market will continue to accelerate, especially with the Indonesian government regulation regarding this matter, namely CoFTRA Regulation Number 5 of 2019.
Best Cryptocurrency Coin Recommendations
So how, are you interested in making this investment?
Indeed, there are now a lot of cryptocurrencies that are spread globally, but we will recommend the best Crypto Coins that you can choose to become an investment asset.
Anything? Let's see the following!
1. Bitcoin
A very popular cryptocurrency, in fact, many Indonesians are already familiar with this.
Bitcoin itself is the most traded crypto coin, even to the point of being called the king of cryptocurrencies, you know.
As for, even so, the number of bitcoins currently available is fairly limited, only approximately 21 million.
Well, but with high demand, it's no wonder that this type of crypto has increased in price.
Indeed, since the beginning, Bitcoin was introduced to target the global market, including through peer-to-peer, used for digital cash and others.
Bitcoin itself was discovered in 2018 and was born right when the global financial crisis threatened the world economy.
Created by Satoshi Nakamoto, Bitcoin is a decentralized cryptocurrency.
That means, the currency is not controlled by anyone, whether it's the state government or even Satoshi Nakamoto himself.
Get to know bitcoin more here.
2. Etherum
Furthermore, there is the first cryptocurrency to introduce the concept of smart contact, namely Ethereum.
With this concept, a developer will be possible to launch or release applications for computers/smartphones that have been decentralized.
In the liquidity category, Ethereum occupies the second position, you know.
That means, this currency is often traded and the withdrawal is also easy.
3. Ripple (XRP)
There is another Ripple currency (XRP) that comes from the United States company.
Meanwhile, Ripple was built with the aim of providing a more efficient way to make cross-border payments in the financial industry.
The trick is to eliminate intermediaries to reduce transaction time and costs.
4. Bitcoin Cash
Compared to Bitcoin, Bitcoin Cash is a cryptocurrency that has the advantage of making transactions faster.
Bitcoin Cash itself was created in 2017.
5. Litecoin
Just like the others before it, one indicator that an asset is good to own is that it has high liquidity.
Well, in terms of cryptocurrencies, Litecoin is one that meets these indicators.
For information, in the Litecoin market, there are 84 million circulating.
For those of you who are novice investors, of course, you are still hesitant to invest.
Let alone investing in cryptocurrencies, maybe investing in money market mutual funds is still not brave.
So, you can learn fundamentally about investing through funding on peer-to-peer lending platforms like KoinP2P from KoinWorks.
