What are some pros and cons of cryptocurrency?
Cryptocurrencies provide a decentralized financial system. It’s not linked to national or international inflation. The transactions made on this platform remain transparent and remove the need for a third party.
Although these factors sound interesting, there are several downsides to investing in cryptocurrencies. For example, the volatile factor that makes crypto a profitable investment also makes it a risky investment vehicle.
So, it’s safe to say, that there are many pros and cons of cryptocurrency investment.
Pros and Cons of Cryptocurrency:
In this article, we’ve explored several benefits and drawbacks of cryptocurrency investments. Read more for further details.
Pros of Cryptocurrency:
Here are some of the advantages of investing in cryptocurrency –
1. High Risk & Rewards:
As of 2025, more than 11000 types of cryptocurrencies are present and circulating. You can expect a high return by investing in some of them. Every cryptocurrency has its perks. However, most of them run on the basis of a demand-supply ecosystem. It makes them volatile, risky, and rewarding at the same time.
Investors can generate a significant amount in revenue by “locking” some of your cryptocurrency staking pool. This will make you one of the validators of Blockchain, and you’ll be able to generate revenue within a long period.
Also, if you can invest a significant amount in top cryptocurrencies like Bitcoin, there’s a chance of earning a significant amount in return.
2. Blockchain Technology:
What makes cryptocurrencies a great investment depends more on Blockchain. The decentralized data-storage ledger, which records all the transactions made on it, is transparent.
Once transaction information is recorded, no one can erase it from the Blockchain. This is one of the key Benefits of digital currency investments.
Also, the network is distributed across different nodes (numerous fast computers), which makes it invulnerable to any attacks or network breaches. It’s a safe network that’s difficult for hackers to take over in one chance.
3. No Intermediaries:
The financial system we fall under depends on an intermediary watching over our transactions. In fact, we are charged by a third-party authority to make a transaction. Whether it’s a bank or a governing body, we’re supposed to place our trust in often multiple bodies for circulating money.
That’s where Blockchain technology poses itself as an alternative. You can make your transaction anywhere and send your money anywhere in the world without any intermediaries interfering. Yes, the financial landscape can become this much more transparent with Blockchain technology.
5. Trading 24/7:
Here’s another advantage of investing or making transactions with cryptocurrencies. There’s no need to go to the bank for a money transfer or withdrawal. You can do that from the comfort of your home any time of the day.
The crypto coin mining and transaction recording happens around the clock. So, there’s no need to wait on your bank, NYSE, NASDAQ, or any other exchange platforms to buy, sell, or trade a cryptocurrency.
This frequency is turning the tide for regular stock exchanges that once had a strict time frame. Now, those exchange platforms are considering operating 24/7 as well.
6. Beat Inflation with Cryptocurrencies:
Here’s a positive side of cryptocurrency. These currencies aren’t tied to any economy or currency. So, in short, you can say that it’s not affected by national or international inflation.
But isn’t there any inflation of cryptocurrencies themselves? Rest easy. It won’t affect your investment as much. There’s a cap against the number of cryptocurrency coins, and the amount of cryptocurrency available won’t go out of control. You can say that there’s no inflation for cryptocurrencies.
Some cryptocurrencies have their own overall cap – take Bitcoin, for example. As for tokens like Ethereum, there’s an annual cap. But either way, this is an approach to keeping inflation at bay.
7. Financial Inclusion:
Cryptocurrencies can help the unbanked and underbanked get included in the banking or financial system. There’s a wide population around the world who aren’t linked to a bank or any similar financial institute. However, with cryptocurrency, all they need is a smartphone and an internet connection.
So, it’s safe to say that cryptocurrencies are building financial inclusion.
Cons of Cryptocurrency:
Here are some cons of cryptocurrency investment you must know before starting your investment journey –
1. Learning Curve:
Cryptocurrency is a difficult terrain for many to travel to. Especially boomers would find it difficult to adapt to the complex terms and mechanics of cryptocurrencies.
It takes a deep level of understanding of Blockchain technology and how different cryptocurrencies operate. Investors and traders have to invest a specific amount of time in their day to learn about cryptocurrency. If you’re comfortable investing your time, refer to platforms like Coinfomania to learn more about cryptocurrencies.
2. Volatile Nature:
Cryptocurrency investments can be volatile. Yes, there’s a chance of gaining a significant amount in return. But the volatile nature can also put investors at risk. Sometimes, the price of Bitcoin or the altcoins goes significantly below its normal average price.
It’s a small-sized market, and the crypto market fundamentally depends on speculation. So, the demand and supply of any token can go down. If you’re thinking of a safe and sound investment, then this isn’t the way to go.
3. It’s Still New:
Cryptocurrency is still new. As a technology, Blockchain has yet to evolve. It only started in 2008, when the whitepaper of Bitcoin came out.
So, there’s only a little data available on cryptocurrency’s ability to return profit. On the other hand, there are centuries worth of data available when we refer to the stock market.
The London Stock Exchange came into existence in 1801. Also, valuable metals and gems like gold and diamonds have been accepted as precious for millennia.
In comparison, cryptocurrencies don’t have enough history to authenticate themselves. So, many investors take these as unreliable options for investment.
5. Scalability Issues:
Yes, many cryptocurrencies process transactions at lightning speed. However, that’s no longer the case after a certain point. Many cryptocurrencies rely on the Ethereum Blockchain.
Some people behind the Ethereum chain say that after a certain point, the Ethereum Blockchain has reached a capacity limitation.
Maintaining transaction speed is no longer easy or possible, and the experience can be quite frustrating for many participants.
Wrapping Up
Now when you know the pros and cons of cryptocurrency, your investments depend on your mindfulness. It’s a volatile platform. Also, many financial experts believe cryptocurrency to be a bubble. Some people lose money while many early investors of Bitcoin are sitting on top of a pile of money.
It depends on how mindfully you manage your portfolio and distribute your money across different assets. Was this article helpful? Let us know through the comment section. We will wait for your feedback.
