ROI, or return on investment, is something that is much talked about in businesses and even among individuals. This is pretty much the ratio of what you invested and how much profit you received from the investment.
You could invest in the stock market, the share market, commodities, or cryptocurrencies. However, investing in either of these comes with a package of risks and rewards. Let’s take a look at the highly volatile crypto market, which has high risks and high rewards.
Back in 2010, crypto was something that wasn’t much heard of, and even the value of it was quite low. It was so low that a person named Laszlo Hanyecz paid 10,000 Bitcoin for two Papa John’s Pizzas. In today’s context, one Bitcoin is around $52K, and Hanyecz could have bought the whole Papa John’s franchise.
However, the road to Bitcoin reaching $52K wasn’t straight. Bitcoin lost more than 75% of its price following the collapse of FTX in November 2022, the largest cryptocurrency exchange at the time. FTX collapsed after the founder of the FTX exchange was convicted of mishandling people’s funds, which led to a $8 billion black hole in FTX.
Referring to crypto, banking giant JPMorgan Chase CEO Jamie Dimon stated, “The only true use case for it is criminals, drug traffickers, money laundering, and tax avoidance.”
However, after the FTX fall, the price has recovered, although it’s still short of its November 2021 peak of nearly $69,000. Since its Bitcoin halving year, the rate of Bitcoin released into circulation will diminish, as such, the price is predicted to reach higher.
Since cryptocurrencies are highly speculative, financial experts recommend investing an amount that is no more than you can afford to lose. Chris Diodato, a CFP and founder of WELLth Financial Planning, stated, “I think it makes sense for most folks to hold a small holding of cryptocurrencies, maybe 1% or 2% of an entire portfolio… it’s only worth as much as someone is willing to pay for it.”
RR Author
Real Research News is the media platform that presents insights and studies of wide-range of topics. It focuses on insights gathered from its survey app.
