Interested in cryptocurrencies? Read this article first


Published at 1:07 pm

May 2021 – Bitcoin, the world’s largest cryptocurrency, has been the center of attention in recent days. The People’s Bank of China (PBoC) has issued a warning that digital currencies cannot be used as a payment method because they are not real currencies. Tesla CEO Elon Musk has suspended the sale of company cars with payment in bitcoins. These two factors caused the total market value of cryptos to fall by more than US$ 720 billion in about 12 hours, hitting the low of US$ 1.350 trillion in market circulation.

For personal finance educator Carol Stange, investors need to understand the best way to deal with this type of asset. There are some ways to acquire cryptocurrencies and the most common are “peer-to-peer”, that is, from person to person; through cryptocurrency brokerages, or exchanges; and ETFs, which are also an investment via a fund but whose shares are traded on stock exchanges.

She explains that it is not indicated, for those who are starting in this market, to buy cryptocurrencies through the Peer-to-Peer model or directly at a cryptocurrency brokerage. “Acting in these first models is risky for the novice investor, as this investor is not always familiar with the terms and functioning of the market. It takes prior knowledge of how things work to minimize risks and increase process safety. On the other hand, buying cryptocurrencies directly from exchanges and brokerages exclusive to this type of asset also involves risks, whether they are linked to the custody of the assets, which are the responsibility of the user, or falling into a scam, since it is not uncommon for fake brokerages to appear on the internet. market. After falling for the scam, the investor has no one to turn to or how to recover the lost money” says Carol Stange.

Another point to be considered is the type of “stomach” that the investor has to withstand the strong fluctuations of this market. “For those who are still not used to volatility, I suggest starting with an amount that can be considered a learning cost, where the investor sets aside a value to understand, in practice, how this market works and helps him not to suffer unnecessarily during currency fluctuations. Variations are part of that game.”

One of the educator’s advice is that up to 5% of the investor’s total net worth should be allocated to this type of operation. “It is definitely not recommended to invest a large percentage of your equity in crypto assets. I see very strongly two profiles in the virtual currency market: beginner investors, who in the ‘hunger’ of exponentially increasing their equity, invest almost all of their resources in this type of product, ignoring the risks and believing that they will get rich quickly, and the optimists in regarding the future of digital money. Like the optimists, I also believe that this technology is revolutionizing the way we handle money, but caution must speak louder than emotion, so that wrong decisions do not compromise our financial health”, explains Carlo.

About Carol Stange (https://carolstange.com.br) – Financial educator and investment specialist, Carol Stange has already provided assistance, consultancy and courses (in person and online) to around 1,500 people. Since 2019, she has been a Domestic Economy consultant for the open-air TV show Mulheres, on TV Gazeta, and is currently a columnist on personal finance in major vehicles in the area, with emphasis on Pocket Guide and 6 minutes. It is also a multiplier of the financial education program “Eu e meu Dinheiro” of the Central bank. Carol Stange is the founder and creator of the brand “How to Enrich Your Child”, with the production of content aimed at parents who want to educate their children through practical concepts of financial education, and content for young people and children, which can be used in schools. She is internationally certified by the ICF (Financial Coach Institute) with Specialization in Personal Financial Planning by the GFAI (Financial Planning Academy). She holds a degree in business administration from PUC – PR, an MBA in Business Management from UEL / MEB and an MBA in marketing from PUC -SP.

Important:

Finance News does not recommend buying or selling assets. The above text is intended to inform.

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