Cryptocurrencies have become a hotly debated topic around the world. and there might an interesting crypto discussion with family or friends for investing in cryptocurrency.
First of all, the Crypto world is getting quite tricky and complex. Importantly, nobody knows everything about it. That’s why it is more challenging and daring to start investing in cryptocurrency.
in the meantime, Some cryptocurrencies, Bitcoin and Litecoin have gained mainstream attention and credibility. This happens as a result of their mass adoption, by some popular juggernauts like Microsoft, PayPal, Starbucks, etc. Alongside, other digital currencies like Ethereum and Cardano have become popular and offer lucrative returns. At this, here we’re going to focus on the top 5 reasons that crypto is worthwhile to invest in at this moment.
Earn Potentially Lucrative Returns
The word potential can be synonymous with crypto. Today crypto has gotten a lot of attention for the reason of being a relatively new concept. Consequently, it opens the door to infinite future potentials.
Assume, if the technology associated with a cryptocurrency adopts in the mainstream by a top non-crypto brand, the value of the Ether (ETH) coin increases a lot thereafter.
Henceforth, this may give early investors an opportunity to earn potentially high returns. Bitcoin is the best example of how mainstream adoption can help the price of a cryptocurrency skyrocket.
Protect Your Assets From Inflation
Inflation dilutes the value of fiat currencies over time. This is hardly applicable to cryptocurrencies. Why is that? Because cryptocurrency operates in a decentralized system and has a cap on supply.
A government or bank can’t manipulate crypto at will. More importantly, this means that cryptocurrencies have the potential to earn more returns than the rate at which a fiat currency loses value over time.
This does not, however, mean that cryptocurrencies are free from inflation. Their value can fluctuate theoretically if there is more mining occurs. But, there are measures in place to tackle this.
The best example is Bitcoin. The rate of Bitcoin mining is half in the last 2 years. This is another implication of cryptos.
- Have Control Over Investment
Let’s get back to decentralization again. As we discussed before, governments or federal agencies can’t manipulate the value of cryptocurrencies as they have no control over them.
Only the crypto holder has the necessary access to their investment with a private key, which grants total control over the buying, sending, and receiving of cryptocurrencies. As of now, countries like the USA, UK, and India are looking to understand and regulate cryptocurrencies to introduce safeguards that will make reasonably safe to invest in equity.
Add Diversification To Portfolio
Crypto is known to be inflation resistant and has the potential to generate lucrative returns. But, it is commonly known to be uncorrelated with assets like stocks and bonds while the United States Dollar has a negative correlation with Bitcoin. as such, these factors may make cryptocurrencies a worthy addition to an investment ’s portfolio for an risk appetite investor.
But, No such thing exists for crypto. You must exercise caution when investing in crypto and advised to make diversified portfolio.
- Benefit From Innovation
Your investment in a cryptocurrency may be a “shut it and forget it” exercise for you, but it benefits the project in two ways. Firstly, it signals social proof, which is trust and confidence in the project’s vision.
Secondly, it offers the project as a way to innovate and expand its range of services, products, and partnerships, which can be attractive to its investors.