- Cryptocurrencies allow businesses a decentralized method of payment for their customers.
- As this technology becomes more and more widely available, it will open up markets for all businesses.
- Investing in cryptocurrency is also an investment in the tech that makes it work so well.
In 2010, if you said that a sizable amount of your investment portfolio was in cryptocurrency, people would have laughed you out of the room. Ten years ago, the public poorly understood cryptocurrency. It was thought to be little more than digital currency on par with digital currency used to buy and sell items in video games. Nowadays, if a person’s portfolio does not include some cryptocurrency, an investor may see them as being behind the times.
What Is Behind the Growing Interest in Cryptocurrency
Whether it is an investment vehicle that you particularly like or not, the truth is that cryptocurrency is everywhere. It is not just an investment tool used by nerds or by day traders.
Many traditional businesses are including cryptocurrency in their platforms in one way or another. Either they use it or see it as a springboard that allows them to launch unique products.
Most financial professionals accept the fact that the shift toward digital currencies is an inevitable reality. There are several clear advantages for financial institutions and for the individuals that come from using cryptocurrency. These include increased speed, resilience, transparency, and efficiency. Cryptocurrencies would make it possible for large organizations and even government institutions to disburse funds to their citizens almost instantly. What does the popularity of cryptocurrency mean for you and your investment portfolio?
Should You Start Investing in Crypto?
Cryptocurrency is volatile. If you were discussing Bitcoin at the start of 2021, you would discuss an investment vehicle worth close to $50,000 a coin. Fast-forward to the start of spring of 2021 and the market cut the value of that coin in half.
There is no way to predict what the value of the coin will be going forward. Some believe that Bitcoin will surpass the $500,000 a coin mark. Others believe that the current surge in its value is temporary and that those who invested their money in it risk losing everything.
However, some will say that a similar argument can be made for all types of investment vehicles. If a person invested in the hottest stocks during 2000, market changes would greatly reduce the value of their portfolio in 2021.
Like all investment vehicles, cryptocurrency requires research, a strategy, knowing your own tolerance, and not investing more money than you can risk losing. There are clear advantages to investing in cryptocurrency. They give people an opportunity to control their finances. Cryptocurrencies are decentralized. This means that they do not have the same weak points that the modern banking system brings to the fore.
Cryptocurrencies allow the individual to control the performance of their assets directly. And, to be fair, cryptocurrencies are in their infancy. This means that even if the price of a particular coin seems high, investing in a coin today could bring unbelievable benefits in the future.
One only needs to look at Bitcoin a couple of years ago. When the price per coin was around $4,000, many argued that it was too expensive to invest in. Little could anyone have realized, within the span of a few years, the coin’s value would increase more than tenfold.
If you are thinking of getting into the crypto game, things may be a lot easier than you realize. By simply downloading a crypto investing app, you can start investing from the comfort of your home.
Some detractors say that investing in cryptocurrency feels a lot like gambling. Even some of the top apps have been designed to function as if they were games. If you are going to invest in cryptocurrency, do so responsibly.
Cryptocurrency is a new investment vehicle with unbelievable high levels of volatility. It is not for the faint of heart. Additionally, cryptocurrency has relatively few regulations that govern the market. It is a buyer beware market. However, a lot of that is changing as governments are taking steps to protect people while at the same time allowing crypto to maintain the decentralized nature that makes it such an attractive tool.
There are thousands of cryptocurrencies on the market today. They are backed by different technologies and serve different purposes. If you want to invest in cryptocurrencies, take the time to learn about what makes the different currencies valuable. Invest responsibly. If you do this, you may reap the rewards from including cryptocurrency in your portfolio.