Cryptocurrency has become a major topic for investors in last few years. We are talking about things like Bitcoin, Ethereum and some other currencies. The price of Bitcoin has risen 300% over the last year, double in 2017 alone. Ethereum on the other hand is upto 2000%. Needless to say investors are very excited about investing in cryptocurrency but they need to be careful.
Here are three things you need to know about investing in cryptocurrency.
1. Cryptocurrency are much more volatile:
They are much volatile than stocks or bonds or any of the assets investors typically invest in. Investors need to be aware that these currencies value can go up 20% up in matter of minutes or crash the very next minute.
2. Beware of scammers:
Specially now when Bitcoin and Ethereum have become so valuable, hackers are working hard to hack into your account. Even some exchanges have been hacked. One has to be extremely careful.
3. You need to pay your taxes:
Even though cryptocurrency are different than typical assets investors are used to investing in, you still need to pay your taxes. the IRS is after some investors who have made big profits in these cryptocurrency but have not paid their taxes. Infact, only 800 people reported their gains last year to IRS. Cryptocurrency is the next big thing, even bigger than the internet boom in 2000.