Cryptocurrency is slowly but steadily inching its way into the global economic scene. Introduced as an alternative to the traditional financial system which is regulated by governments and banks, it was created to enable a transaction between any two entities located anywhere in the world without the interference of a third party. The transactions are faster and more cost-effective compared to transactions in a traditional financial setup. These blockchain technology know no boundaries, physical or political and so it does not, in any way, affect the cost of transactions.
In the last few years, there has been a surge in the number of cryptocurrency users which is expected to reach the 100 billion bench mark by the year-end. The crypto market is today seen as a potential investment that has a great future. Mentioned below are a few reasons why cryptocurrencies are worth investing in.
Why must you invest in cryptocurrencies?
• Diversification of your financial portfolio
The wide array of options in the cryptocurrency types offer you the opportunity to invest in more than one digital coin. Considering the volatility factor if you still choose to invest in one particular cryptocurrency, then you might end up losing your entire invested money in one go due to the downfall of the prices. However, if you choose to settle for more than one crypto at a time, then even if one’s value goes down in the market, the other one would be there to save your investments.
There are several trading apps such as Bitcoin code, for investors and traders that provide them with insightful inputs and help them in adopting the right trading strategies for optimum results.
• Fast and cheaper transactions
Financial transactions are done in the virtual space where each exchange of funds is verified on the decentralized blockchain without the intervention of a central authority. Anyone, anywhere in the world who has an internet connection can buy or sell their coins in a peer-to-peer system. In the traditional system, political boundaries matter. A cross-border transaction not only takes longer but also the fee charged by the intermediary bank is higher than usual.
• Safety against inflation
In the case of Bitcoins, the maximum number of coins to be issued has been fixed at 21 million. Unlike fiat currencies, where governments pump more money into the economy thus leading to inflation, the ceiling on the number of coins has made it possible to protect itself from inflation.
• Immune to political conditions
In the event of political turmoil in a country, the first thing that is affected is its economy. Cryptocurrency is, however, not affected by it as it is not country-specific. It exists in the digital space and is accessible all across the globe.
• Good long-term investment benefits
Long-term investment in cryptocurrencies means that your assets are not as much affected by fluctuations caused by volatility as do short-term investments. The price of most of the established coins is on the rise despite the odd plunges now and then. Your long-term investment can be used as a buffer in the event of a financial emergency or even for your post-retirement phase.
• You control your assets
Crypto transactions are decentralized in nature. You trade in adherence with the peer-to-peer system where there is no third party involved. You control how you want to trade your assets and also their storage. The value of the coin is not determined by a governing body. You can benefit and accrue the maximum profits by trading at the price that you deem will earn you the best profits.
• Greater acceptance of cryptocurrency
An increasing number of businesses, big and small, across the world are incorporating cryptocurrencies in their daily transactions. Hence, the use cases of topnotch cryptos like Bitcoins and Ethereum have found its application in various cafes, restaurants, real estate businesses and even stationary stores.
• Added usage of cryptocurrencies
These digital assets are not just restricted in their usage as a currency in exchange for goods and services. The blockchain has many other functions like Ethereum blockchain which is widely used for varied operations such as smart contracts and DeFi. The blockchains can be effectively used to enhance security, speed, and accuracy in managing funds for various purposes.
Conclusion
As in any investment, cryptocurrency investment also has its pros and cons. With basic knowledge and inputs from various sources, you can take judicious decisions that will go a long way in ensuring that your investments are not just safe but flourishing.
