The use of hard cash is slowly declining in this age of fintech and digitally processed transactions, and digital currency is revolutionizing the investment and transaction world.
Cryptocurrency has gained a lot of popularity over the last decade, with Bitcoin and Ethereum coins being two of the main cash cows for the cryptocurrency market today. If you are wondering whether you should invest in this currency this year, here are seven reasons that will help you make up your mind:
1. Accessibility
Cryptocurrency is easily accessible on any smart device like a smartphone or a computer with a solid internet connection. You can easily set up your cryptocurrency wallet within a few minutes and buy bitcoins with the help of Netcoins.
Setting up your crypto wallet on your phone or computer does not require extensive ID verification or lengthy credit check processes either, making setup much faster than that of traditional options of financial institutions like banks. Cryptocurrency transactions are processed much quicker as well.
2. Privacy
Cryptocurrency eliminates the need to register with a central financial institution. Each transaction in the world of cryptocurrency is pseudonymous and it does not include any personal information about you to protect your identity.
You make the transaction through your identifier on the blockchain and use a wallet address. This gives privacy to financial transactions and prevents frauds like identity thefts.
3. Transaction Costs
The cost of a financial transaction in cryptocurrency is much lower when compared to other traditional financial services. You can easily transfer money to any part of the world, as cryptocurrency knows no borders. As per Bank of America, a domestic wire transfer has a fee of $30, and outbound international wire costs $35.
Meanwhile, the average transaction fee in bitcoin is $2.024. Even on congested blockchains, the median transaction fees of transacting in cryptocurrency are still lower than standard wire transfer fees, which can help businesses and investors save up a significant amount if they have to make such transactions frequently.
4. Portfolio Diversification
Cryptocurrency is a modern avenue that enables investors to diversify their financial portfolios. Financial assets such as stocks and bonds are popular, but the potential of exponential returns on crypto cannot be ignored.
Adding cryptocurrency to your investment portfolio can reduce the risks associated with your investments. For example, if the value of your stock is going down during a specific period, your Bitcoin portfolio might go up, compensating for any potential losses. However, it is advisable not to keep your investment too heavy on crypto as it is very volatile and can result in exponential losses as well if the market crashes.
5. Protection from Inflation
Cryptocurrencies like bitcoin can be great investments to protect you against inflation. Bitcoin has a hard cap on the total number of coins to be minted. It is considered a deflationary asset as its price is likely to keep increasing as the demand increases.
Converting your hard cash into cryptocurrency investment can protect your money against inflation as its value will either be at par or above the increasing inflation rate.
6. Decentralized
Bitcoin is decentralized, which means it is not regulated by any government or central bank, unlike the regular currency. Authorities cannot freeze or demand your coins when a country goes through bankruptcy or recession. There is no viable way to implement taxation on bitcoin and other cryptocurrencies. This gives people autonomy over their money.
The price of the cryptocurrency is not linked to government policies, which can remove any unnecessary state intervention in the cryptocurrency market.
7. Bitcoin is a Market Leader
Bitcoin is arguably the most trusted and reliable cryptocurrency today. There are an estimated 7,800 cryptocurrencies, yet bitcoin has the most significant market cap. America alone has around 46 million people owning some share of bitcoin. This shows its credibility in the world of cryptocurrencies.
The bitcoin market also leads the other cryptocurrencies as well. Hence, investing in bitcoin is a much wiser decision as the experts can predict changes in bitcoin and its popularity among users ensures that it is here to stay for a long time.
Endnote
Cryptocurrency holds immense benefits for investors. Their transactions are much quicker and easier than traditional financial forums and they enable users to make a transaction from anywhere through their smart devices.
Crypto wallets' data privacy and identity protection features enable them to be more user-friendly and protect users from fraud and scams. It can also help investors achieve portfolio diversification and protect them from losing the actual value of their money in high inflation. Investing in Bitcoin can help you quickly achieve your financial goals for the year and can prove to be one of your best investments in this age.
However, cryptocurrencies do not follow traditional rules and regulations and might lead to unwanted incidents and losses at times. It is advisable for investors to be extra cautious when investing in cryptocurrency.
