It has been a while since cryptocurrency has captured the attention and hearts of investors. Even though crypto has been on a roller coaster ride in the past couple of years, the value of the leading digital currencies has only shown tremendous growth. People who have put something in the game have gotten good results and have made sizable profits. The future of crypto seems to be unfolding and every step depends on the extent of utility and unachieved potential of crypto. There are many who started out as sceptics and are now staunch supporters of cryptocurrency. What really changed their minds and what has replaced doubt and fear with trust in the minds of people?
Let us take a look at some of the reasons why people are more open to cryptocurrencies and are considering investing in them.
- Diversification of investment – It has been a golden rule of investment to not put all your eggs in one basket. As stable as an investment opportunity might appear to be, it is obvious that when things go wrong, you might end up losing all your investment. That is why diversifying your portfolio is highly recommended. It is a general rule that with higher risk, comes a higher reward. Cryptocurrency is a volatile yet rewarding market and the ups and downs are just bumps along the way to growth. Investing in crypto should be done with a view to earning a long-term profit rather than a quick buck.
- Deflationary assets – Most cryptocurrencies have a limited supply of coins. This means the demand and utility will increase while the number of coins is limited. The value of these assets is only expected to go higher. For example, in the case of Ripple, the Ripple price INR will hit new highs in a few years as every time a transaction occurs, a part of Ripple gets destroyed. Like most cryptocurrencies, ripple has a limited supply of tokens and this asset will only get more valuable with time.
- Security – The unique selling point of cryptocurrencies has been the security that comes with decentralized blockchains. Cryptocurrencies are open-sourced and publicly-verifiable technology, which makes them transparent too. The multi-layers of protection are nearly impossible to hack and there have been almost no instances of loss of funds. The absence of a third party while transacting also provides security. The inclusion of smart contracts has ensured that no party can modify the agreement and back away from the agreed terms and conditions.
- Speed – Transferring money to an account of another country was a process that used to take days. This was particularly cumbersome in case of emergencies. The speed of transactions has improved drastically due to the introduction of cryptocurrencies. You can send funds across the border within a matter of seconds. The competition in the market has led to cryptocurrencies aiming for better scalability, giving users more options and more efficient options.
- Long-term investment – Cryptocurrency has one of the highest percentages of profits. If you invest just a small amount now, it is possible that your entire post-retirement life will be taken care of if you know where to invest. This works out great as a long-term investment and the momentary hurdles should be considered indicative of the future.
- Independent trading – Unlike the stock market, the crypto market is open 24X7 and there are no holidays or weekends. This means there is more scope for traders to get involved in this apart from their jobs. You need not commit particular hours of the day. In fact, this also means that there is no concept of the market being shut and you are free to trade as and when you feel it is the right time. For example, Ethereum price INR can fluctuate multiple times a day. However, if you feel that you are getting the best price for selling or buying at 3 am, then so be it!
- Usage of cryptocurrency by businesses and banks – Most people who were confused or unwilling to believe the applications of cryptocurrency have been proven wrong recently. Many businesses, including a few in India, have started accepting payments in cryptocurrency. Banks around the world have adopted cryptocurrency officially. The one which has made a particular breakthrough with financial institutions around the world is Ripple. The applications of cryptocurrency make it possible to be used successfully in a lot of forums and a lot of ways too.
The endless real-world applications of this digital currency are what make it a wise investment. Once the potential was used, it was easier for people to see that crypto is the future of the global economy. However, there are a few things that need to be remembered before you invest in a cryptocurrency. Do a background check of the exchange platform as well as the crypto and ensure you are falling for a scam. Gauge your capacity to invest and the risks involved. It is advisable to read as much as possible and gain knowledge to avoid misplaced expectations and unfortunate circumstances.