Did you know that the crypto industry is worth more than $3 trillion dollars? Cryptocurrency is a major player in the financial markets, even though most people have yet to acquire some for themselves.
While adoption has increased, the masses have yet to jump on board. But they will.
There are many benefits of investing in cryptocurrency. While it can be a confusing topic, it’s worth taking the time to understand it and consider it as an investment to add to your portfolio.
So why should you start buying up different types of cryptocurrency? Keep reading below to find out now.
Impressive Potential for Gains
There are some serious technological achievements that cryptocurrency has brought about. And we discuss those benefits below.
But let’s be honest; most people who invest in crypto aren’t investing in the technology. They’re investing in the next hottest asset class in the hope of making some serious money.
And there’s no shame in going where the money is.
Crypto has seen some of the craziest ROI in history. Bitcoin, for example, launched in 2009. It was originally given away for free. Early bitcoin miners could get as much as they wanted.
Eventually, it rose to a few cents, then a few dollars. In November 2021, bitcoin peaked at $68,000 per coin. The same coin you could’ve bought for a dime a few years earlier.
Many other cryptocurrencies like Ethereum Solana, Cardano, and Avalanche have similar stores (though not quite as extreme as bitcoins).
The value of crypto can fluctuate greatly. And while risky, these intense fluctuations can lead to big returns in a short time frame.
Digital Currencies Built for the Internet
Fiat currencies were established long before the internet. They made sense in the pre-digital era.
But they aren’t efficient in the modern world. Just try and send someone money from the US to Asia. It’s a long, expensive, complicated process.
Cryptocurrencies like bitcoin exist first and foremost as digital currencies. They exist on the internet. There are no physical tokens.
It cost the same amount of money to send crypto to your neighbor in New York as it does to send someone crypto in Tokyo. And the same amount of time; typically a few seconds, sometimes a minute or two.
And it only costs a few cents for larger cryptocurrencies. There are some super efficient cryptocurrencies that only cost a fraction of a cent to send money to someone else.
No more dealing with bank clearing houses and high fees to send money to friends and family abroad.
One of the core foundations of cryptocurrency, which began with bitcoin, is decentralization. Decentralized cryptocurrencies are not subject to any specific government, nor are they managed by any central banking system.
There is no company or CEO somewhere dictating what particular crypto can and cannot be.
US dollars are subject to the US government. They are managed by the central banking system. And they are micromanaged by your personal bank or credit union.
These banks control your money. They can censor it, lock it, or block transactions if they deem it necessary.
Crypto is censorship resistant. No one can stop it.
No one can artificially devalue it either. Unlike the US dollar, which is inflated thanks to the government, many cryptocurrencies have a maximum supply. No more bitcoin, for example, will ever be created. The supply is fixed.
The decentralized nature of cryptocurrency gives individuals more power, more control over their money, and more control over how they use it.
Many experienced investors have moved a lot of their money into bitcoin. Why? as mentioned earlier, bitcoin has a fixed supply.
There will only ever be a maximum of 21 million bitcoin. No one can create more and dilute the current supply.
So the law of supply and demand states that as more people want bitcoin, the fixed supply will increase in value.
That doesn’t mean the value of bitcoin only goes up. It still goes through bear markets. But it does make a lot more sense to store funds in bitcoin versus the US dollars, especially as inflation hits upwards of 9%.
Many Ways to Earn
Traditional asset classes are linear. They typically only provide income in one, maybe two ways.
With cryptocurrency, an entirely new financial system has been born. And it’s one that offers many ways to generate a return.
The most obvious is to buy and hold. If you can wait long enough for the value to increase, you can sell your crypto at a profit.
But you can also stake your crypto. When you do this, you lock up your funds and help participate in network security. You earn a portion of transaction fees, which acts as interest paid to you.
You can also supply your crypto to lending pools. The funds are lent out to borrowers, and you earn interest risk-free.
Or you can use your crypto to invest in NFTs, which have become an asset class in their own right.
Crypto is a limitless landscape of opportunity for those willing to learn and try things that aren’t possible in the traditional financial system.
Cryptocurrency is secured by the blockchain, an open-source, distributed ledger of transactions. Most cryptocurrencies use either proof of work security protocol (like bitcoin) or a proof of stake security protocol (like most newer cryptocurrencies).
These blockchains aren’t controlled by a single entity and instead are maintained by thousands of individual nodes across the globe. This helps to prevent fraud and to maintain a single source of truth for all crypto transactions.
How to Invest in Cryptocurrency
The investing benefits of cryptocurrency are real, tangible, and lucrative. As more and more people buy and hold onto crypto for themselves, the benefits will continue to compound.
So the sooner you stake your claim on the crypto landscape, the better.
Need some tips for buying cryptocurrency for the first time? Here’s what to do.
Research Coins to Buy
There are thousands of different cryptocurrencies on the market today. Many more are launching every day, though most are going to fail.
In fact, many of the newest cryptocurrencies launch as a joke, a meme, or outright scams. So it pays to be careful about what you buy.
Take some time to research which cryptocurrencies make the most sense as a part of your investing strategy.
Those looking to buy and hold something that will retain its value and grow consistently over time will benefit from older, tried-and-true cryptos like bitcoin or Ethereum. These are your safer bets.
If you’re looking for outsized returns fast, you’ll play a risky game. The coins that can take off the fastest are the newest ones, but only invest what you can afford to lose.
Buy With Cash
Cryptocurrency, and in particular bitcoin, are a unique type of investment because you can acquire it with cash. No credit card, debit card, or bank transfer is necessary like when you buy any other type of asst.
You can use a bitcoin ATM to trade cash for crypto in seconds. And you can sell crypto at any time using an ATM, getting cash on the spot.
They are easy to use. You’ll first need a crypto wallet downloaded to your smartphone. These free apps store your crypto once purchased with an ATM.
When you visit an ATM for the first time, you’ll need to create an account using your photo ID and phone number.
Follow the instructions on the screen to create and verify your account. Then you can initiate a transaction by selecting which crypto you want and how much cash you will be inserting.
You can check this website for details regarding ATM locations.
You can also acquire crypto investments online. If you don’t deal with cash, you can create an account at an online cryptocurrency exchange like Coinbase or Gemini.
You’ll still need to verify your identity using your photo ID and other personal information. Once verified, you can transfer fiat currency from your bank account to your exchange account and trade for crypto as you please.
Keep it Secret, Keep it Safe
Digital currencies, free from the authority of a government, company, or bank, come with a few disclaimers.
The most important is to keep your crypto safe. You have the opportunity to store crypto in your own wallet, which means you and only you own it and control it.
No banks can sensor what you do with your crypto, as they can with money in your bank account.
At the same time, if you lose your crypto, no one can help you get it back. Crypto investments are insured like bank account balances are.
When transferring crypto between wallets, always double-check the receiving address. Funds sent to the wrong address can’t be recovered.
Also, consider using a hardware wallet. These physical hard drives keep your crypto stored offline, where hackers can’t touch it.
Enjoy the Many Benefits of Investing in Crypto
Cryptocurrency is huge, and it’s only getting bigger. Over the next decade, we can expect the majority of people around the globe to be using crypto on a regular basis.
And the benefits of investing in crypto will only compound.
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