The cryptocurrency market has lost £246 billion in the ‘crypto crash’ –  here's what you need to know about the controversial currency

At its peak, the cryptocurrency market was worth $3 trillion. Many of us debated whether or not to invest in crypto tokens, torn between its potential to make us wealthy beyond our wildest fantasies and the fact that, well, we didn’t really know what the whole thing meant. 

In the past week, the total value of all cryptocurrencies in circulation has dropped by £246 billion (via The Telegraph), after two of the biggest crypto tokens (Terra/UST and Luna) collapsed. The knock-on effect has been that investors have lost confidence in other cryptocurrencies, with Bitcoin dropping to its lowest value for 18 months. 

We’ve all heard them: the stories of classmates and colleagues who bought and sold cryptocurrencies at the exact right time and made a huge profit, the incredible success stories that make us wonder what life could have been like if only we’d bought some Bitcoin at the right time. But where do they stand now? And err, what actually is cryptocurrency, and does it have a place in a solid investment strategy? 

Clare Seal, GLAMOUR’s financial columnist, advises…

What is cryptocurrency?

Cryptocurrencies are a digital currency and can, under some circumstances, be treated as real money in that they are sometimes an accepted currency for buying goods directly. This makes them a little different from stocks and shares, because you don’t have to sell them in order to reap the financial benefits. They are purely digital and have no cash form, and you can’t simply transfer them to your bank account – you’ll need to keep them in a special digital wallet.

They are also not managed or governed by any central agency, like banks or governments, making them far more volatile than, say, sterling or euro.

Get clued up on the different types

If you’re interested in investing in cryptocurrency, the first step is to research the different types, and find out what you might like to invest in. With over 10,000 different types, there are a lot to choose from, and you’ll probably have only heard of a couple of the biggest ones. With more than 7 million active users, Bitcoin is the undisputed king, but the days of buying it for pence and selling for a huge profit are all but over – especially given the recent crypto crash.

Find safe places to learn and invest

One of the most important things in your crypto investing journey is the integrity of your information sources. There are an increasing number of ‘trading experts’ cropping up on social media platforms, particularly Instagram and TikTok, but this is not always the right place to get your information. 

Check out credentials and make sure that any information is trustworthy – you don’t want to end up losing money because of a dodgy tip on the internet. It’s worth looking for a reputable course to get a comprehensive understanding of how it works, like this one by Princeton University, before you start looking for individual trading advice.


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