In the last few years, cryptocurrency has transformed into one of the most sought-after digital assets, mostly because of the high returns. However, most of these digital assets are volatile, and many people are concerned about blockchain technology safety.
So the question is: Should you buy cryptocurrency? Or, rather: Why should you invest in digital assets like Ethereum and Bitcoin? In this post, we’re discussing some of the most important reasons why you need to start investing in cryptocurrency as soon as possible.
1. Booming Sector
While it is true that the crypto market can be volatile, investments in digital assets are seen to be very beneficial in the long run. In 2020, the global cryptocurrency market size was valued at $1.49 billion and is expected to reach $4.94 billion by 2030, growing at a CAGR of 12.8%. For instance, Bitcoin had a price of $.09 in 2010, but in 2021, its price again reached an all-time high as values surpassed $65,000.
If you decide to buy cryptocurrency, you will have a fantastic opportunity to earn a passive income. You can easily carry on with it alongside your regular job or other investments and accumulate money in your savings account without breaking too much sweat. They can also act as a source of savings after retirement, or provide you with a financial buffer in case of a sudden economic crisis.
2. Great Returns
Research has shown that cryptocurrency gives one of the best ROI, only matched by the real estate sector. The difference is that, unlike the real estate sector, the investment in crypto is significantly lower.
Just to illustrate, last year, Gala (GALA), the Ethereum-based cryptocurrency, gave the highest ROI of over 51,000%. Next came Axie Infinity (AXS) with 19,000%, and The Sandbox (SAND) with 15,000%. Terra (LUNA), Solana (SOL), Polygon (MATIC), Kadena (KDA), Fantom (FTM), Decentraland (MANA), and Harmony (ONE) gave ROI between 5,000% and 13,000%.
3. Security and Transparency
By definition, a cryptocurrency is a virtual or digital currency that’s secured by cryptography, which makes it almost impossible to double-spend or counterfeit. The underlying blockchain technology is inherently secure and despite its decentralized nature, transactions on most cryptocurrency networks are also quite secure. Cryptocurrencies can be bought, stored, and used safely, as long as the user follows best practices.
Crypto is also popular because of its transparency, which stems from open-source and publicly-verifiable technology. The quintessentially decentralized nature of cryptocurrency trading gives users control to own and store their assets without the involvement of a third party. The value isn’t determined by a middleman or by the exchange, which allows traders to make maximum profits.
4. Diversify Your Portfolio
While it is true that cryptocurrency should only be a small part of your investment strategy (experts recommend people should allocate 1% to 5% of a portfolio to cryptocurrency), it is a great opportunity to diversify your investments. And it’s not just cryptocurrency.
In addition to altcoins like Ripple, Ethereum, and Dogecoin, which increase the potential of gaining wealth and help traders diversify their portfolios, there is also a whole new digital ecosystem taking shape, with digital assets like non-fungible tokens and NFTs.
5. More Places Are Accepting Crypto
Not so long ago, crypto seemed incomprehensible, a virtual currency without any value in the real world. These days, however, a growing number of both brick-and-mortar and online merchants now accept Bitcoin.
Some of the biggest corporations in the US that are jumping on the crypto bandwagon and accepting Bitcoin as payment include Microsoft, PayPal, Starbucks, Etsy, and Whole Foods. In 2021, Elon Musk made waves when he announced that Tesla was buying $1.5 billion worth of Bitcoin and accepting the world’s most popular cryptocurrency as payment for its vehicles.
In other words, it’s now possible to walk into a shop that has a Bitcoin sticker on the front door or window and buy goods by transferring the requested sum to the merchant.
Final Thoughts
Whether you have a small sum of money to invest or you are already a millionaire, it is a great idea to invest in digital assets now. Crypto is here to stay, and these five reasons indicate that making the decision to invest in cryptocurrency now is one of the best financial moves you can make.
If you are interested in a crypto-related article like this, you might also like to read about What is Cryptocurrency Mining? How Does it Work?