More than a decade has passed, and every year investors keep on delaying cryptocurrency investment. Since its inception in 2009, it has taken the financial world by storm, and experts believe the trend will continue.
8 Reasons To Invest In Cryptocurrencies:
We have covered pretty much everything about cryptocurrencies. Are you still in doubt about whether to invest or not? If so, below are the top 8 reasons you should invest in cryptocurrency –
Diversification With Potentially High Returns- Every financial advisor will tell you to diversify your portfolio. You should have some high-risk and some low-risk investments. How much should be high risk and how much low risk depends on your risk profile. Cryptocurrency lies at the extreme end of high risk. Since the risk is high, so are the returns. You should invest a small percent of your total portfolio in cryptocurrency to give your capital a chance to increase multi-fold. You should not invest a large sum of money in cryptocurrency.
Deflationary Assets– We have mentioned in previous articles that most cryptocurrencies have a limited supply. It makes them deflationary assets. It means their purchasing power increases with time – opposite to your savings account. The money you keep in the bank, its purchasing power decreases over time.
Highly Protected– When you do transactions using your credit card, there is a possibility of intrusion. Credit cards use a pull mechanism where to make transactions you have to provide details for authentication. Cryptocurrency uses a push mechanism. Using it, you can send anything without entering any information into the system. You don’t have to enter your name during or before the transaction. Also, cryptocurrency cannot be hacked, manipulated, counterfeited as all the transactions are processed using cryptography.
Good Choice For Long-Term Investment– If you plan to invest in cryptocurrency for the short term, you will see a lot of volatility. It may not be the best investment for you.
If you check the returns of popular cryptocurrencies, they have always delivered good returns to investors in the long term. It makes them the perfect choice for long-term investment. If you are looking to invest a small amount every month for your retirement (other long-term goals), you can invest a percent in cryptocurrency as well. If all goes well, it can give you multifold returns and secure the second inning of your life.
Accessible From Everywhere- When you have money in a traditional bank account, using it in a foreign location may not be possible. Wherever it is, the transaction cost is too high, and in most cases, it is not feasible to send or receive money. With cryptocurrency, you can send and receive money from any corner of the world as all transactions are digital. You will have full access to your money, as there are no central bodies with hundreds of rules or banks with hefty transaction charges.
Blockchain Is Here To Stay- We have talked so much about blockchain and cryptocurrency. Even now, if it is not clear that cryptocurrencies are here to stay, then maybe crypto investing is not for you. We have already discussed that many sectors are working on projects related to cryptocurrency (and blockchain). Many financial institutions are starting a project on it, and hence they are here to stay.
Crypto And Gold Are Similar- Gold has been the most popular investment instrument for decades. It has given good returns to investors. Experts are now acknowledging the fact that cryptocurrencies (Bitcoin and a few more) are at par with gold. Both of these instruments work as a hedge against volatility and inflation. Some investors are buying Bitcoins to safeguard themselves from the devaluation of rupees in the near future.
It Is Easy To Invest– A few years ago, investing in crypto was not so easy – only technologically literates were investing in crypto. Financial literacy and ease of accessing technology have increased in India (and across the world). It makes investing in crypto extremely easy. If you know how to access different apps, you can buy and sell cryptos from your mobile with a few taps.
We have given you the top eight reasons to invest in cryptocurrency – there are many more. We would again like to highlight that crypto investment is risky as well as volatile. You should not get influenced by high returns your friends have made and invest more than you should. Create your financial plan and invest accordingly.