There’s no denying that cryptocurrencies have grown dramatically. The area of crypto has only grown larger as a result of the phenomenal rise of Bitcoin (BTC) and ethereum (ETH).
Besides Initial Coin Offerings (ICOs), there are currently other different forms of blockchain trading products available, ranging from decentralised finance to non-fungible tokens. Many cryptocurrency aficionados predict that these initiatives will result in the creation of a new generation of digital currency millionaires (or billionaires). Investors who are about to or other currencies may be asking whether there are reasonable grounds to do so now.
Why Should Anyone Engage in Cryptocurrency?
Because virtual currency and blockchain technologies have taken the market by storm, it’s no wonder that far more people are switching to crypto trading.
People invest in cryptos for a variety of reasons, including meeting investment goals. However, some people invest in the cryptocurrency industry for the wrong things.
The following are the top ten factors why every trader should include cryptocurrency in their portfolio.
- This will be the future mainstay: Cryptocurrency has the capacity to transform people’s lives. It may eventually become a common payment method, it may give a way to safeguard against devaluation, and blockchain technology – the underpinning of cryptocurrencies – may potentially have a significant effect on how we do trade.
If cryptocurrency becomes popular, its value might skyrocket. Current bitcoin price aud is valued over $44,000 per token, but some professionals believe it might reach $500,000 per token soon. Based on how extensively bitcoin is accepted, there might be a lot of profit possibilities for initial traders.
- Cryptos are a large place: While we find some names, there are numerous cryptocurrencies of more than 5000 counts. But it’s simply that most of these don’t have transaction volumes, and now that their values have skyrocketed, especially Dogecoin and Dogecoin Killer, there’s been a shift of capital away from BTC and into other cryptocurrencies. That’s one of the reasons why bitcoin experienced a massive outflow last week. So, instead of having only one cryptocurrency available to you, you can place bets based on your comprehension and risk tolerance.
- The level of liquidity is significant: To demonstrate this, Elon Musk, Tesla’s CEO, recently offloaded a position to demonstrate that cryptos, specifically Bitcoin (BTC), operate as a “currency substitute.” Furthermore, it is only the newfound interest in these digital currencies by traders throughout the globe in the midst of the outbreak that is propelling them to a bigger market cap and hence profitability. Moreover, the current level of demand is unlikely to wane anytime soon.
- Can serve as a foundation for diversifying your investing portfolio: It has been said many times that putting all of your eggs in one basket is always a bad idea, and this is true in the investment sector as well, where a single investment or more into one asset can never be profitable enough to meet your financial goals. As a result, in the current circumstances, you may be compelled to invest in these cryptos to hedge against inflation and even volatility in global stock markets in the midst of the geopolitical, health, and economic crisis.
- Cryptocurrencies such as bitcoin have achieved a status comparable to gold: Professionals have recognized this reality and have compared bitcoin to gold in terms of its utility as a reserve of values. Moreover, both gold and bitcoin function as inflation and fluctuation hedges. In fact, some traders are racing to buy bitcoins in order to protect themselves from the expected depreciation of the USD in the coming days, given the US’s substantial stimulus efforts. Also there are some coins like The Peoples Reserve (TPR) that are backed by the last highest price of gold itself.
- Some of the cryptocurrencies trading at an extremely high sale: If we take the most exchanged coin with the greatest market valuation, you guessed it, we’re discussing Bitcoin, which has dropped from its historical peaks of under $65000 in April to $43,371 (latest report as on Coindesk), which amounts to a 33% reduction. According to long-term forecasts, bitcoin may experience a pullback this year and may reach levels of less than $85000 by July 2022, delivering gains of more than 46%.
- Cryptocurrencies Investing Can Produce Great Profits: The promise of profits may be the most compelling reason for people to engage in crypto. Money makes the society go round, whether you like it or not, which is one of the main reasons to invest in crypto. Despite the fact that crypto investing is still in its infancy, it has the potential to outperform conventional commodities such as equities. Cryptocurrencies are very unstable, which indicates that a single transaction might result in large profits. Simultaneously, keep in mind that instability implies that investors can risk everything in an instant. So, definitely keep possible dangers in mind! Because cryptocurrency investment can be difficult, one of the first measures to succeed is to design an efficient risk mitigation plan to limit damages.
- Cryptocurrency Provides Choice and Freedom: Whether you bet in Ether or Tezos, your digital currency is yours alone. As previously said, cryptos do not depend on banks, which charge expensive fees just to retain your funds. Furthermore, the cryptocurrency market is open for 24 hours a day, seven days a week, so you don’t have to bother regarding closing times; you can transact whenever and however you want. Isn’t that justification enough yet to engage in virtual currency? That’s correct! It is entirely up to you to plan your timing and selling routine. You can deal full-time or part-time, and you can even trade bitcoin while touring. Isn’t it cool?
- Cryptocurrency Provides Reliability and Security: Despite the fact that many people still correlate cryptocurrency with criminal acts and blatant frauds, such as OneCoin, making investments in cryptocurrency is a good potential initiative, with an increasing number of people placing their confidence in cryptos rather than fiat money. Furthermore, many cryptocurrencies are built on blockchain technology, which is thought to be nearly immutable. Transfers on the blockchain are secured, authenticated with a private key, and validated with a public key. At the same time, the technology provides high degrees of clarity – another compelling incentive to invest in cryptocurrencies.
- Blockchain Technology Has the Potential to Make a Real difference: Are you searching for more advantages of investing in cryptocurrency? It is not necessary to be a blockchain engineer to understand the importance of bitcoin and blockchain beyond cryptocurrency trading. Blockchain technology, with its rising usage of smart contracts and distributed apps, has the potential to assist a variety of industries, including entertainment, healthcare, finance, and politics. Simply question any gamer about the amazing improvements that blockchain-based innovation can offer to the realm of gaming and digital possession!
Yet there are numerous factors to be wary of cryptocurrencies, many conventional traders have been persuaded to invest in new asset category. The blockchain sector is usually touted as transforming, with the ability to affect the world in the same manner that the Web did in the 1990s.
Fans of cryptocurrencies, on the other hand, should exercise caution when investing in bitcoin. They should spend the time to grasp the most typical pitfalls that newbie investors face, in addition to understanding complicated security standards and thoroughly investigating their new investments.
I am Trisha Renolds, an Accounting and Finance graduate at the University of New South Wales specializing in Blockchain and Cryptocurrencies.
I believe that Cryptocurrency is the future, and so the digital economy. That being said, I want to educate people about the functionality and implementation of Blockchain technology and Cryptocurrency. For over five years, I have been a writer for the latest updates about Blockchains and Cryptocurrencies.
Aside from working on my own digital business, I share my deep knowledge about Blockchain and Cryptocurrencies through our website The Top Coins.