Explained: The good, bad and ugly of investing in cryptocurrencies

As the cryptocurrency market evolves, investing in virtual coins has become much easier than it used to be a few years ago. While investor interest has peaked after the cryptocurrency boom of 2020, there are several critical issues that need to be addressed.

Investing in cryptocurrencies has become a subject of debate over the past few weeks, owing to the high level of volatility seen in the virtual coin trading space — several rounds of ups and downs have been witnessed in the crypto market in a matter of two weeks. On Tuesday, cryptocurrency prices recovered after plunging sharply on Sunday. Bitcoin, the world’s most popular cryptocurrency, has bounced back after falling almost 12 per cent. Earlier last week, another devastating bout of volatility hit cryptocurrencies and led to a sharp erosion in the market capitalisation of popular virtual coins. This was largely due to China’s tight crackdown on cryptocurrencies and Tesla CEO Elon Musk’s tweets about the environmental impact of mining the virtual coins.