Since its beginnings in 2009, cryptocurrency trading has taken the financial world by storm. Digital money is quickly gaining traction in India as well.
As an investing strategy, Bitcoin is unquestionably riskier and far more volatile than traditional currencies or equities.
Let’s go through 6 Reasons to Invest in Cryptocurrency.
The universe of cryptocurrency is large
Although we come over a few identities, there are over 5000 cryptocurrencies. However, some of them do not have trading volumes, but due to a significant increase in their prices, notably Dogecoin and Dogecoin Killer, there has been a shift of capital away from BTC and toward other cryptos. This is one of the reasons why bitcoin saw such a large outflow last week. So, instead of having only one cryptocurrency available to you, you may place bets based on your comprehension and risk tolerance.
Also Read: How to invest in Mutual Fund
Cryptocurrency cannot be physically prohibited
Some countries throughout the world have debated outlawing cryptocurrencies; nevertheless, despite their intention, it is physically impossible. Why? Because anybody may obtain a cryptocurrency wallet. Countries can, of course, impose limitations, but the cryptocurrency market itself cannot be prohibited. Alergia, Cambodia, Bolivia, Educator, Bangladesh, and Nepal are among the nations that have relaxed restrictions on using cryptocurrencies.
High Potential Return
Cryptocurrency values may be extremely volatile, fluctuating dramatically monthly and even daily. For example, in March 2017, Bitcoin was valued at $975.70, but it quickly soared to $20,089 in December. A few years later, in April 2021, the price of Bitcoin reached an all-time high of $64,000.
It demonstrates that, despite price volatility, cryptocurrency users may regard this as one of the positives of Bitcoin since it might result in a high return potential. With an increasing number of users believing Bitcoin is a potential global currency, many investors and businesses have chosen to utilize it. It also contributes to the larger return potential, especially for those who purchased it at a lesser price.
It provides you with independence and flexibility
Anyone may purchase, sell, or convert your digital currency at any moment. You also won’t have to worry about bank fees. A cryptocurrency is a self-contained investment and transaction instrument, and no government in the world has complete control over all financial movements. As a result, you will be fully independent of external causes and constraints. You may convert even securities with minimum commissions if you use a good exchange.
Also Read: 5 Crypto tips for beginners
The Future of Cryptocurrencies Appears to Be Bright
Many individuals believe that cryptocurrency and securities are fraudulent. The issue is more uncertain in the case of digital currencies. Major cryptocurrencies have a well-defined system for working and mining new blocks. The risks are high if you select an unknown digital currency.
Another major point of contention among detractors is that products and services do not support digital money. Of course, you should be aware that digital money is a very speculative tool.
However, the value of digital money is determined by people’s trust and the volume of transactions. Many businesses exchange dollars and other fiat currency for digital tokens. That is why you should not be concerned for at least the next 3-5 to 10 years. Many people gain from buzz initiatives, and you may become one of them.
Potential for Profit
This really is the primary reason why individuals engage in crypto trading and seek certain coins. Virtual currencies are well-known for their ability to gain value and deliver a high return on investment.
Bitcoin, for example, has a market value of over $1 billion, and following a bull cycle that began in 2020, the price of Bitcoin reached $63,000 in April 2021. Other cryptocurrencies, such as Etherium, topped $1,000 during this bull run.