The cryptocurrency world is surely fascinating. Despite the price of the various cryptocurrencies being prone to immense fluctuations, investment in digital currency has been substantially been increasing.
And so is the interest surrounding it. For instance, Finder reports that every three seconds, a social media post about Bitcoin emerges. According to GlobeNewswire, the market value of cryptocurrency is expected to reach a whopping 1,758 million USD by 2027.
You might be wondering, is it wise to jump on the bandwagon and trade in cryptocurrency? The answer is yes. Why? Well, here are the top six reasons why investing and trading in cryptocurrency is worth it.
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Bitcoin is like gold (but better)
No one can contend that gold is the most sought-after asset. Its scarcity has made it the backbone of modern currency via being a store of value. What makes gold unique is that there is only a fixed quantity in the world.
Bitcoin, one of the top cryptocurrencies in the world, is also fixed in number. The maximum bitcoin that can be mined is 21 million, which is expected to all be extracted by 2140. This allows Bitcoin to be similar to gold, and hence be a potential store of value.
What makes it better? Well, while the quantity and availability of gold are not known to all and are surrounded by ambiguity, all cryptocurrencies’ information is public. Whether it be its production rate or the ledger, it can be tracked by all.
High Liquidity
Cash is often thought to be the best asset because it is the most liquid asset out there. While cryptocurrency cannot come close to the power of fiat money, slowly, the liquidity of cryptocurrency has become quite high. In fact, now it is very easy to trade cryptocurrencies.
As per Statista, there are more than 8,488 ATMs of Bitcoins in the world, as of 2020! This means that you can easily convert your crypto money into fiat cash when the need to do so arises. Similarly, there in 2020, crypto wallet quantity increased to over 54 million, whether signifying the demand and accessibility of the currency.
Direct transactions
There was once a time when the world of cryptocurrency was met with immense skepticism. People did not think that the currency would make it to mainstream usage. However, we now live in a time, where various industries and companies accept cryptocurrency as a mode of transaction.
For instance, you can even eat a whopper in the Netherlands by paying for your meal in whoppercoin, a cryptocurrency! Within n the automotive sector, you can find cars for sale that can be purchased directly via cryptocurrency. This is both true for online websites as well as physical dealerships.
No third-party involvement
The level of independence that can be enjoyed via the help of cryptocurrencies is unparalleled. It can never especially be matched by a bank where your access to your own money is limited by another organization and other people.
As the financial crises of 2008 illustrated to the world – the banking system can crumble.
To keep it short, the money you put in banks doesn’t stay in a physical vault. Instead, banks maintain a certain level of liquidity and invest all other money. When trust in the system dissipates and people demand money from banks all at once, it cannot cater to the requests and goes under.
The world of cryptocurrency cannot go bankrupt. While its value may vary, and hence you incur losses or profit in your investment accordingly, the quantity of currency you have will not change.
The fact that you don’t have to rely on other financial institutions for holding and transferring your money also means that you don’t have to pay any service charges.
Aid in portfolio diversification
We are certain you have heard of the cliché adage “never put all your eggs in the same basket”. In fact, investment services rely on this motto to offer their clients a mix of investment opportunities to best diversify their portfolio.
When it comes to exploring a wide variety of assets, nothing comes close to cryptocurrency. After all, there are so many digital currencies within the blanket term to invest in. To be specific, according to Reuters, there are 2000 such assets. Considering more keep entering the horizon, who knows how many more cryptocurrencies will enter the market.
What makes crypto a worthy asset for portfolio diversification? Well, it is because its price is not dependent on stocks, bonds, or gold. It is a world of its own, with each currency featuring its own price fluctuations. Hence, it offers traders the chance to minimize their risk and maximize their ROI.
Newfound legitimacy
No one can deny that cryptocurrency was once a murky business, with many countries going as far as banning the asset. While there are still certain places that discourage the use of digital assets, the world is slowly opening up to it, hence providing it with legitimacy.
As more and more billionaires and institutions buy and accept bitcoin, countries are moving towards regulating the asset rather than shunning it. For instance, the OCC has allowed US banks to hold cryptocurrencies as legitimate assets. Post-2019, it is also being taxed.
For those of you who don’t understand the significance of this step, allowing something to be taxed means giving it legal status. Additionally, the rise of blockchain technology within various industries has further established trust in the main driver of cryptocurrency – hence giving the currency itself credibility.
Ending Remarks
Yes, the world of cryptocurrency is unstable and dynamic. However, this is what makes investing and trading in it so fulfilling. With high stakes comes the high potential return on investment. And this is what traders live for!
Study the cryptocurrency market and find the best time to invest in the asset. Whether it be for speculative purposes or for actual use as a mode of payment, the fact remains that the crypto is one asset you would want to have.
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