Cryptocurrency has gained massive popularity over the last decade. Not just in developed first-world countries but even the developing ones. Everyone wants to chime in and see what the hype is about, but very few are clear on why they should invest in Cryptocurrency.
Cryptocurrency may be the new buzzword in investment, but it differs from other assets like property or equity simply because of unfamiliarity with blockchain technology. Of course, not everyone understands blockchain and crypto mining, but everyone wants to benefit from it.
So if you’re looking for new avenues to explore and invest in, here are ten reasons you should invest in Cryptocurrency.
1. Reliable store of value
Unlike fiat currency (money you use daily), Cryptocurrency is limited in supply since it relies on blockchain technology. It also implies that governmental or political factors cannot meddle with the value of cryptocurrencies. Furthermore, since digital currencies are cryptographic, confiscating or charging cryptocurrency tax is nearly impossible.
These factors make it feasible for investors worried about financial crises, hyperinflation, or other scenarios that may impact the value of fiat money to invest in crypto. Specifically, Bitcoin has garnered attention because of its cryptographic and deflationary nature. If you check an online BTC price calculator, you’ll understand why it’s called “digital gold.”
2. Blockchain Technology
Blockchain technology has eradicated barriers and intermediaries for carrying out transactions. From healthcare to the supply chain, many industries need secure transaction networks. With the help of bitcoin and other Cryptocurrencies, new routes are established for economic activity.
The potential to carry out safe financial transactions attracts investors to Cryptocurrency. Many governments continue to legalize Cryptocurrency due to its security and convenience. Building on that, transparency and security are one of the top reasons why most people invest in crypto.
3. Permissionless Banking
Similar to organizations’ need for secure transactions, most people prefer crypto for its decentralized nature. Cryptocurrency is mined on a decentralized network, which means your transactions are secure and independent, creating permissionless banking opportunities. The digital economy is fast-paced and doesn’t need centralized financial institutions and their fees or constant surveillance.
Future financial institutions may advance their services by integrating blockchain technology and Cryptocurrency. Accounting firms will likely benefit from Cryptocurrency’s speedy, secure, and accurate nature. As a result, investors of these cryptocurrencies benefit from the price and value hikes.
4. Long-term investment
Irrespective of Cryptocurrency’s high volatility and price fluctuations, investment and trading in Cryptocurrency is highly lucrative in the long run. Investing in crypto differs from accumulating wealth in a savings account. You earn interest for throwing your tokens in the crypto ecosystem through trading, lending, pooling, and staking digital currency.
Doing so is called holding a Defi position, which can bring in passive income. But before you pour money into crypto, make sure you have the time and effort to learn crypto trading and the discretionary cash to invest.
Interestingly, crypto trading and investment have garnered a community of its own – investors, crypto enthusiasts, and hobby traders who love engaging with each other. You might even know a friend or family member who frequently talks about crypto, or perhaps that’s how you got into crypto.
The urge to hop on the bandwagon of crypto trading has forced many into the world of investment. While it is a rewarding social experience for many, be cautious of where you put your money as there are a lot of scams and fraud in crypto.
6. Flexible trading
Cryptocurrency, unlike other forms of assets, is available 24/7. You can access your trading account and check your portfolio and digital wallet whenever possible. The flexibility of crypto trading helps traders organize and plan their trades whenever they intend to. It is different for other forms of assets where you may have to abide by certain time restrictions and rules
7. Control over assets
Unlike other assets, the decentralized feature of crypto trading allows you to control and monitor your assets without the intrusion of a third party. And as a trader, you have the flexibility to evaluate your trades and not wait for an intermediary. As a result, you can control your trades and ultimately what you gain from them.
8. Diversification of portfolio
Though Cryptocurrency may constitute a small portion of your investment portfolio and strategy, it still allows you to diversify how you invest. Unlike property, equity, and shares, Cryptocurrency is another sphere that creates diversification in your portfolio. Crypto and other digital currencies have their own rules.
Unlike stock market fluctuations, inflationary pressures, or financial crises, the crypto ecosystem is independent of such factors. Thus, by adding Cryptocurrency to your portfolio, you invest in secure assets that may yield high returns depending on the token’s supply and demand.
9. Blockchain is here to stay
Considering the spread of digital currencies and blockchain technology in various sectors, cryptocurrency investment and trading are undoubtedly rewarding. The integration of Cryptocurrency and traditional financial practices is increasing as industries have adopted blockchain for financing, improving supply chain transparency and identity protection.
Through various tokens and initiatives, Cryptocurrency has firmed its hold in the financial ecosystem. Regardless of its volatility and high-risk behavior, it may be a loss not to invest in it right now.
10. Low settlement fees
Most people invest in digital currency for its price appreciation and high-yield returns. In contrast, it is also a beneficial medium of exchange. Unlike the transaction costs of popular coins like Bitcoin, which can cost several dollars, some other currencies may even cost less than a dollar.
Settlement fees are a massive factor for many, especially those who frequently utilize online transactions. Transactions backed by crypto also take up less time.
Investing in crypto may seem like the newest trend, but before you hop on to this trend, know that there are pitfalls too. The speculative nature of Cryptocurrency allows its investors and traders to speculate about a rise in currency’s value, which may increase volatility and impact your return on investment. Similarly, there have been numerous scams and frauds within the crypto ecosystem; thus, beware of the platforms you use or the tokens you invest in.