Is cryptocurrency a minefield filled with scams and bad investments? Yes. Does that mean people should avoid it? No. The USD world is filled with scams and bad investments as well. Diversification and prudence and good investment strategies apply in both worlds.
I always tell people not to get involved with cryptocurrency out of greed. Do it out of fear. The fiat, government-controlled world of currency is coming to an end. On the one end is profligate government debt spending, endlessly devaluing the government currencies. On the other end is the call of private, decentralized currencies free from central bank (or other leadership cabals) manipulation, however well-intentioned as it picks winners and losers. The most established cryptocurrencies will relentlessly gain converts until we reach a tipping point in 5 or 10 years and the old fiat currencies start to collapse, at which point you _don't_ want to be a late adopter.
There's no "advantage" to being "government-backed" as commonly assumed, apart from the sheer threat of violent force being applied to dissidents. And if that's the best argument for government fiat, then government fiat is toast. In practical terms being linked to governments just means a currency is inflated (devalued), and you never know how much they will print next year. This makes it inferior to provably scarce cryptocurrencies that are constantly being refined and improved, with the improvements adopted by decentralized concensus rather than bureaucratic fiat.
Do your homework, avoid "moonshots" (the Buffet rule is a good one for cryptocurrency) and start gaining experience, is my advice. The notion that a new asset class (the first in 400 years) that has gone from literally nothing to $1.6 Trillion in 15 years is going to die off or suddenly plateau is unlikely in the extreme IMO.
Thank you
I don’t expect it to die off suddenly.
It will die off gradually accompanied by the ongoing screams of its victims.
1. I've lost track of the number of exchanges I've used over the years that have subsequently gone bust, taking any customer funds on the exchange with them. I dodged at least 8 or 9 bullets (not leaving funds on an exchange that subsequently went bust) before being caught by the Bitgrail debacle at the end of 2017/early 2018. In that case a small exchange basically run out of some Italian's basement became hugely popular overnight due to the explosion of interest in NANO and it being one of the few exchanges offering it, but the lone operator had pre-existing security flaws and was completely in over his head when problems emerged. "We have suffered a stolen" still makes me cringe.
2. ~2018 the US government bureaucracy decreed that Americans shouldn't be able to earn crypto by lending to margin traders. There are many ways to lose money in crypto but this was not one of them. Exchanges have done a great job with circuit-breakers that close out positions before a margin trader becomes unable to pay back a lender, and in the few cases where that didn't work in my experience the exchange always covered the loss, rather than get a reputation as a risky place to lend.
In the aftermath of the decree from Washington a gaggle of companies sprang up offering crypto investors the chance to earn a yield with their crypto. I naively assumed they had either found a way around the rules or were politically-connected types who'd lobbied for an exemption, and that they were just middlemen to get back into lending to the margin traders. Instead, there was no transparency, no government requirements or oversight, and they were actually doing things like lending to Chinese loan shark operations that couldn't get regular banking access. Every one of these companies has now gone bankrupt. I lost heavily in the first two before pulling out. Americans remain 2nd-rate citizens on the world markets due to this malicious interference by the SEC and other bureaucratic regimes in Washington.
3. If you invest in cryptocurrency, particularly smaller projects, you need to pay attention. Sometimes they will enact upgrades that are not backwards compatible, with only a limited window to update your own wallet. Any decent project should avoid this, but there are too many out there that just assumed everyone investing with them is a hyper-obsessed techie who is paying close attention to their project. So I've had the experience of being told "sorry, there's no way to convert your coins now, you missed the window." Again, that shouldn't happen with any decent well-run project with a more centralized team, but beware the smaller cryptos.