Published on November 11th, 2019 | by Alycia Gordan0
5 significant reasons to invest in cryptocurrency today
Over the past few years, there has been a consistent rise in the number of people showing an interest in cryptocurrency.
A survey released by Moscow-based cybersecurity firm Kaspersky Lab revealed that 19% of the global population had purchased cryptocurrency. 8% of American adults already own cryptocurrency.
Considering that these digital assets are merely a decade old, that’s an impressive amount. But reports are indicating that there will be more support for crypto in the coming years. Younger generations are consistently showing greater interest and awareness about Bitcoin and other altcoins.
Nearly one-third of people aged 18-34 would instead invest $1,000 in Bitcoin than in the stock market or government bonds.
What are the reasons behind this shift?
For one, the younger generation is more intimate with the digital world. Millennial and Gen Z are familiar with digital payments. They know that it is the future. Therefore, they believe that digital assets such as crypto are the smarter choice for economic stability for the coming years.
Psychological behavior indicates that the willingness to take risks reduces with age. Inherently, it is the younger generation that is more willing to take them. The relative youth of the crypto market and its volatility makes it an undeniably high-risk venture.
But more interestingly, the younger generation is nearly always in search of finding quick ways of striking it rich. The boom of Bitcoin is an excellent example of how many became overnight millionaires. So there’s no denying that crypto is a lucrative market.
However, the fact that the younger generation is more open to technological advancements may well be another valid reason. Therefore, these individuals are more willing to invest in the new, experimental form of currency. For instance, 17% Millennial (aged between 22 and 37) prefer owning cryptocurrency, while Baby Boomers accounted for as little as 2%. The older generations are less comfortable with digital investments.
The question is, should I invest in cryptocurrency?
The crypto fever peaked in December 2017, when Bitcoin nearly touched $20,000. The price of this coin has continued a downward trend ever since, with several cycles of peaks and plunges along the way. It’s only natural that people are questioning whether it is still advisable to enter the crypto market.
Today, Bitcoin stands at just under the US $9000, nearly 40% increase from last year’s price. As cryptocurrency continues to grow enthusiastically, it’s clear the crypto is becoming an inherent part of the modern economy. The global system is transitioning to welcome this change.
So what is your stance on this latest shift? If you are undecided about what to do next, here are some reasons why you should consider investing in cryptocurrency.
1. Bitcoin holds a great deal of value
Bitcoin holds approximately 43% of the crypto market. It has a clear advantage over other currencies. And as the oldest, most reliable coin, it has the largest market cap.
Bitcoin is one of the most approved forms of digital payments. Startups and emerging businesses are interested in associating it with their institutional investments and offerings. So whether you want to buy a car for sale or invest in real estate, numerous platforms already accept and promote Bitcoin as a mode of payment. And as crypto enters the mainstream, more applications will eventually develop.
2. The cryptocurrency market continues to grow
There are a lot of coins fighting for attention. So we can confidently say that cryptocurrency is not going away anytime soon. Currently, crypto interest is spread over 2322 coins, even though none can compete with Bitcoin.
And if crypto is floated on the Nasdaq or similar stock exchange, it will get a boost in reputation and value.
3. The global economy is shaky
The political and economic conditions of countries around the world have become volatile over the past years. And with the advent of trade wars, the situation may not improve anytime soon.
Weakening national currencies may also become the source of demand for cryptocurrencies. As a non-correlative asset, cryptocurrencies have the potential to thrive even if the traditional economy or fiat currency of your country doesn’t. Your crypto will always be yours. Many individuals are diversifying their investment portfolio or savings budget by introducing cryptocurrencies into them.
Moreover, middlemen such as banks and governments will no longer be required for transactions and exchanges. Crypto, as a decentralized system, is what the future promises its investors.
4. We are already moving towards digital payments
Digital payments are replacing cash all over the world. From payment cards to online banking to mobile payments, this is now the norm. It is only a matter of time that crypto takes over.
That’s because it’s offering more significant benefits, especially when it compares to the level of privacy and safety that crypto provides.
5. The market is still young
The stock market is centuries old, and it has had its fair share of ups and downs. Cryptocurrency is still in its infancy, just over a decade old. So it’s bound to be volatile- the hallmark of a new market. It will take time for investors and exchanges to adjust to this new ideology. But if you play it safe and invest only that which you can afford to lose, there is more chance of making it in this arena than breaking.
So when the crypto market does mature, volatility will decline, and along with it, the profit potential that is visible today. So while the risk may seem high at the moment, there is a greater chance for more returns.
Because of the drastic market swings, the market sentiment is currently low. Many have lost hopes in cryptocurrency, finding it too risky to approach. But according to Warren Buffett, this is the time to buy. He says, “Be fearful when others are greedy and greedy when others are fearful.”
And since the bottom has been found, prices will – and are- bouncing back.
For the most part, every investment you make carries a certain degree of risk. And there is no guarantee that it will remain safe. The volatility of crypto has pegged a lot of questions at its long-term stability.
But trading crypto doesn’t have to be a high-risk activity. It can be a significant investment, even today. However, the key is to do your due diligence. Be smart about the decisions you take. Make educated choices based on timing and probability. But more importantly, decide whether the investment profile fits your style.
And just like investing in any asset, whether it’s real estate or cryptocurrency, you need to be cautious. Acquire adequate knowledge and research about market trends before starting. And remember, selecting the right exchange is just as important as choosing a coin.