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Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more
Estimated reading time: 2 min
Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
What are the key risks?
- You could lose all the money you invest.
- The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in cryptoassets.
- The cryptoasset market is generally unregulated. There is a risk of losing money or any cryptoassets you purchase due to risks such as cyber-attacks, financial crime and firm failure.
- You should not expect to be protected if something goes wrong.
- The Financial Services Compensation Scheme (FSCS) doesn’t protect this type of investment because it’s not a ‘specified investment’ under the UK regulatory regime – in other words, this type of investment isn’t recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker here.
- Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
- You may not be able to sell your investment when you want to.
- There is no guarantee that investments in cryptoassets can be easily sold at any given time. The ability to sell a cryptoasset depends on various factors, including the supply and demand in the market at that time.
- Operational failings such as technology outages, cyber-attacks and comingling of funds could cause unwanted delay and you may be unable to sell your cryptoassets at the time you want.
- Cryptoasset investments can be complex.
- Investments in cryptoassets can be complex, making it difficult to understand the risks associated with the investment.
- You should do your own research before investing. If something sounds too good to be true, it probably is.
- Don’t put all your eggs in one basket.
- Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.
- A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
If you are interested in learning more about how to protect yourself, visit the FCA’s website here
For further information about cryptoassets, visit the FCA’s website here
Table of Contents
Forbes Advisor has provided this content for educational reasons only and not to help you decide whether or not to invest in cryptocurrency. Should you decide to invest in cryptocurrency or in any other investment, you should always obtain appropriate financial advice and only invest what you can afford to lose.
Cryptocurrency is always at risk of serious fluctuations. That’s especially true for Polygon’s native currency, MATIC.
But some investors see that as an opportunity, especially because Polygon is still one of the top cryptocurrencies based on its market capitalisation of $4.6 billion (£3.62 billion). Investors may find the following information on Polygon useful to know.
What is Polygon (MATIC)?
While Ethereum is the go-to platform for smart contracts, its popularity means users may end up paying high transaction fees.
That’s where Polygon comes into play. It’s an Ethereum Layer 2 scaling solution. For those new to the crypto lingo, a Layer 2 crypto is built on top of an existing blockchain. In this case, Ethereum is the Layer 1 crypto and Polygon is the Layer 2.
Polygon is designed to scale the Ethereum network and improve its functionality. And it has become popular among decentralised finance platforms, with a strong, rich DeFi architecture and non-fungible token (NFT) ecosystem. The network also claims that it can handle thousands of transactions per second (TPS) – which is pretty quick in comparison to Ethereum’s TPS of around 15.
Dion Guillaume, global head of public relations and communications with Gate.io says: “With its increasing utility, the overall network health and valuation should grow stronger.” This suggests there may be a bright path ahead for this crypto. Currently, Polygon trades for less around £0.54.
MATIC is Polygon’s native token. MATIC can also be used for crypto staking and paying transaction fees. Unlike some other cryptocurrencies with unlimited supply, MATIC is limited, and there will never be more than 10 billion coins in circulation.
Polygon price
Where can investors buy Polygon?
Polygon’s MATIC token can be purchased through decentralised exchanges and also with fiat currency through exchanges such as eToro.
There are some cryptocurrency exchanges that offer trading pairs, allowing customers to trade and purchase MATIC with Tether (USDT), a stablecoin.
How to buy Polygon
To invest in Polygon’s native currency, MATIC, investors may follow these steps:
1. Choosing a crypto exchange
Crypto exchanges act as marketplaces that facilitate buying and selling cryptocurrencies. Although some exchanges are designed to be fairly simple, others are intended for more advanced investors, offering features like crypto staking, margin accounts and futures trading.
When shopping for an exchange, evaluate the platform’s security, and look for one with low fees and low account minimums.
2. Buying MATIC
If an investor opens an account and connects it to a funding source – such as a bank account or debit card – they can place their first order for Polygon. They will need to enter Polygon’s ticker symbol – MATIC – and the amount they want to invest. Most exchanges allow investors to designate an order type.
While investors may purchase MATIC with a credit card, it is generally considered unwise to rely on credit to buy cryptocurrency. One reason is because credit card transaction fees on crypto exchanges often run high. If an investor uses a credit card to buy cryptocurrency, it generally will count as a cash advance and be subject to a higher interest rate than charged on regular transactions.
3. Storing MATIC
As with other cryptocurrencies, investors are responsible for storing the keys for accessing their MATIC investment. There are multiple storage options to choose from:
- Hardware wallets A hardware wallet resembles a flash drive or USB drive. It’s a physical device that stores the private and personal keys to access cryptocurrency. These wallets are not automatically connected to a network or the internet, providing “cold storage,” which is more secure.
- Paper wallets With a paper wallet, investors can write down the keys or use an app to get a printed QR code to access their cryptocurrency. But paper wallets can be risky – if the paper is misplaced, access to the cryptocurrency is lost. That means they could lose the crypto stored in that wallet.
- Software wallets Unlike hardware wallets, which are physical devices that can be disconnected from the internet, software wallets are programs or apps investors can download onto their computers or other devices to store their cryptocurrencies. They are less secure than hard wallets, but investors can easily access their holdings to buy and sell other cryptocurrencies.
- Crypto exchanges Some cryptocurrency exchanges store investors’ crypto. However, using an exchange for storing cryptocurrency may not be a long-term solution due to security concerns.
What investors can purchase with MATIC
The MATIC token can be used within the Polygon ecosystem. Investors can use MATIC to pay transaction fees, stake cryptocurrency, or participate in network governance.
Whether it makes sense to invest in MATIC may be dependent on an investor’s finances, goals and overall investment portfolio.
As with any crypto asset, Polygon is risky and volatile. Individuals should only invest an amount that they are comfortable losing, as cryptocurrencies are risk assets.
