Are you confused about whether to put your money into cryptocurrency or traditional forms of investments? Well, this is a common dilemma faced by organizations, as well as individual investors looking to make the most out of their accumulated money. So, in this post, we’ll try to find out whether or not investing money into cryptocurrency is a wise decision. But before that, it’s noteworthy that some of the world’s most financially successful people have invested in Bitcoin. From the founders of Yahoo to PayPal, several billionaires invest in Bitcoin.
The dawn of digital technology has transformed the world of currency. Today, it’s possible to accept or make a payment without the need for transacting with real money or negotiating with the bank. This has become possible because of Bitcoin technology. Since its inception, Bitcoin is gaining more and more popularity as a worldwide currency. Bitcoin is a peer-to-peer network and digital currency which is independent of any government or financial authorities. After the spectacular rise of the Bitcoin, several other cryptocurrencies entered the market like Ethereum, Dash, Monero, Litecoin, Ripple, PPCoin, Namecoin, and Zcash among others.
How to Get Cryptocurrency?
If you want to acquire some digital coins, typically you have two options. First, you can log in to an exchange site and buy cryptocurrency of your choice. As a crypto investor, you can purchase the amount you feel comfortable with and then keep a watch on the price. By analyzing the exchange rates, you can sell your cryptocurrencies when you think it’s profitable. The second option is to mine the cryptocurrency by verifying transactions on the web.
Now coming back to the big question- whether to invest your hard-earned money into Cryptocurrency or not?
It is believed that putting a safe amount of money into cryptocurrency can help you to diversify your investment portfolio. According to experts, investors should diversify their investment portfolio by putting money across different stocks to minimize risk. Here are some benefits of investing in the cryptocurrencies.
- Lower Inflation Risk
One of the biggest challenges faced by government-backed currencies is inflation. The fiat currencies are controlled by their respective governments which make them vulnerable to inflation. The financial authorities can print more money and consequently, its value goes down. For instance, the 100 US dollars that you had 10 years ago would be worth not more than $89 today. The national currencies lose value over time which results in lowering its purchasing power. Bitcoin, on the other hand, has a fixed supply which prevents it from inflation. If you invest in Bitcoin, its value will increase to help you make a profit. Those who had bought Bitcoin worth $100 in 2010, now have over $5,000,000.
- Interest on Investment
Bitcoin is considered as commodity money and can be converted into several different fiat currencies. Many companies allow users to convert their bitcoins into fiat currency and vice versa. If you have bitcoins, your digital coins can be invested just like you invest with fiat money. When you invest fiat money in a business, you reap interest on this investment. In the same way, you can invest Bitcoins and earn interest.
- Earn Profit
In every investment, there is always a risk of price fluctuation and a fear of uncertainty. Although the crypto market is highly volatile, this feature also makes it profitable. If you invest in the right coin at the right time, the return on investment can be unparalleled for percentage gains. According to crypto experts, the chance of gaining profit is more than suffering a loss. It is believed that bitcoin could potentially become a global currency. If this speculation becomes a reality, the potential gain in BTC would be more than the potential loss.
- Easy Access
Digital currencies are portable and easy to access. Unlike fiat currency which is difficult to carry around, Bitcoin worth million dollars can be easily stored and carried in a memory card. Moreover, you don’t need to keep the money for the long-term to make a profit. Once you invest in Bitcoin, you can use the interest generated for your daily transactions like purchasing groceries. Unlike traditional investments, Bitcoin gives you instant access to your money for your financial transactions even when it’s invested. Also, Bitcoins can be used for facilitating financial transactions with minimal fees.
- Free from Counterfeiting
Another advantage of Bitcoin and other cryptocurrencies is safety. The digital transactions are recorded on a network of computers which is visible to everyone. This means that nobody can tamper the transactions on that history. Counterfeiting is a big issue faced by traditional currencies. There is a huge amount of counterfeit notes in circulation which reduces the value of the currency. But when it comes to cryptocurrencies, it’s impossible to counterfeit digital currencies.