Among all the investments there are out there, cryptocurrency is one we cannot underestimate. During this period, digital currency has overtaken all other investments in popularity due to its huge growth potential.
In 2021, crypto investors make up 3.9% of the world with more than 300 million investors worldwide, as well as over 18,000 businesses accepting cryptocurrency as a form of payment. It is no surprise then, that investors have begun to take an interest in the cryptocurrency market.
In this article, WIRTUAL will discuss 5 reasons to invest in cryptocurrency, but before we get into that, we must first gain a better understanding of what cryptocurrency is.
Cryptocurrency is a digital currency or a type of digital asset that is encrypted. It is protected and its transactions are validated through blockchain technology. This allows the transactions that occur to be transparent and removes the need of a middle man. It relies on a decentralized network, keeping the system safe from issues that arise from keeping all information within a single entity.
The information on a decentralized network is safe from any altercations and from any loss of data from system crashes. Most importantly, the network is not owned by any single individual or entity, meaning there is no one that has absolute power of the system.
The most famous cryptocurrencies you’ve probably already heard of include Bitcoin, Ethereum, or Solana for starters.
Normally in the stock market, there are many legal and geographical restrictions that make force the scope of our investments to be confined to a specific country. This alone gives the cryptocurrency market a major advantage over other markets. Since cryptocurrency is decentralized (unlike currencies that are centralized or require an intermediary such as a bank), it can be bought and sold without the use of an intermediary to carry out the transactions. Without an intermediary, transaction times are automatically reduced.
With cryptocurrency being a global market with low barriers to entry, it has attracted much of Gen Y and Gen Z, which make up most of the investors in the market. These are the ones that are shaping the future of the cryptocurrency market. The participation of these generations have driven the crypto market to immense growth.
Cryptocurrency has grown in value faster than most other assets due to its nature of being open globally. Cryptocurrency has the potential to grow 10,000 percent or by 100 times over in just one year. In the year 2020, the total cryptocurrency market quickly grew from 193 billion USD on 1 January 2020 to 641 billion USD in December 2020.
More importantly, every year in the cryptocurrency industry, its fundamentals have grown very quickly, which is why crypto is being more and more accepted as a form of currency. An example of this is Ethereum (ETH), whose development is undeniable. Ethereum was created as an open-source, meaning the creator of ETH revealed the source code, which allows anyone to build on the existing system and develop it even further. ETH also has an its own large ecosystem. All of this has driven ETH growth by over 1000 times over (on 23 October 2020 ETH was 414 USD/coin, currently on 22 October 2021, ETH goes for 4100 USD/coin).
Another reason the cryptocurrency market is easy to get into as a beginner is that you can begin investing with a limited budget. Due to Fintech, or financial technology (applying technology into into finance to create new innovations) anyone interested in investing in cryptocurrency can do so through an exchange. These exchanges allow you to invest even in the tens in various cryptocurrencies– there is no need to invest large sums of money. There could also, however, be a transaction fee according to the terms of each specific exchange.
Another advantage of crypto that is especially useful in the digital age is that crypto has access to simple and reliable sources of information, making it easy to undergo transactions. All you need is a smartphone to expand your reach in finances and in life.
Other than investing just to hold coins, more and more participants are selling artwork in the world of blockchain. The popularity of NFTs (Non-Fungible Tokens) are growing massively. NFTs are a type of cryptocurrency that allows us to occupy assets, or hold the copyright to the asset through holding coins. As long as you have internet connection, you can buy, sell, or trade in NFTs freely. An important note to make on NFTs is that it cannot be copied or duplicated.
For instance, Jack Dorsey (the owner of Twitter) announced an auction on his first tweet: Just set up my twitter in the form of an NFT. He was able to close the auction at 2.9 million coins. It is worth mentioning that he does have to pay a gas fee (a fee to be paid with every transaction in order to store information in the blockchain), though the gas fee is very low.
Though NFTs are channel that artists have become very interested in, NFTs are not only about the artwork, they also signify ownership of rare items in various games.
Other that investing in crypto for profit, another good reason to invest is that cryptocurrency can be used in the real world, and has very low transaction fees. Due to its decentralized nature, and the lack of intermediary, many have places a lot of trust in the system.
Nowadays we see the news reporting on many companies that are beginning to open their doors to cryptocurrencies, and accepting them as a form of payment. For example, Tcoin (Travel Coin) which allows you to book hotels and purchase plane tickets through their website TravelTcoin. Another example is El Salvador, whose government recently officially announced that debt can be legally repaid through cryptocurrency as well as accepting as payment for various other goods and services. The payment can be made with Bitcoin, and many other coins in the future.
Cryptocurrency can be considered the investment of the future that will make everyday life for many people more convenient due to the ease in which it can be sold and traded. There is no need for an intermediary or high transactions costs, giving us more freedom in our finances and the market.
More importantly, investing in cryptocurrency is an opportunity for huge gains, regardless of whether you are investing for long term for profit, or to trade.
The main thing we at WIRTUAL want to tell you is, if you want to get into investing cryptocurrency but you are scared of messing up the first step, remember you can take is slow and start with a small amount first. But you don’t want to miss out entirely on what could become the global leading currency.