Even though bitcoin is centric in the crypto space and synonymous with cryptocurrency, experts are suggesting to think beyond the coin. It is advised to build a diversified cryptocurrency portfolio and accommodate altcoins like ethereum, litecoin and dogecoin. It is time to think broadly and not just narrow it down to bitcoin, the origin of cryptocurrency.
The crypto space has expanded in recent years and it is becoming more innovative. The segment is not just limited to the digital coins, but the latest developments including DeFi, smart contracts and more.
Experienced investors point out that diversification helps in spreading the risk across the holdings. If an investor has a further wide vision, he may spread the risk across various segments like stocks, mutual funds, bonds and cash.
However, those who are just interested in the cryptocurrency segment need to understand its market is highly volatile and he may lose his entire investments in a single day. It is unpredictable and not under the control of any bank, government or authority.
The crypto price movement is basically determined by the supply and demand of the respective coins. The other driving forces are jurisdiction regulation to operate in a country, adoption news and technical developments.
The British watchdog has not approved the crypto trading in the country. Similarly, the FSCS disallows the same. Hence, it is always suggested to take detailed research before investing and buy only from a trusted and reliable service provider.
As it is not regulated in the United Kingdom, consumers do not get any protection. The profit earned may attract taxes.
The crypto space is still in its infancy. The first product in the segment is bitcoin, which is currently the largest cryptocurrency in the industry with respect to market capitalization. A plethora of cryptocurrencies appeared thereafter. However, a handful of such altcoins are good for trading.