One of the fastest growing and most lucrative markets in recent times is cryptocurrency. From the inception of bitcoin till now, the industry has seen explosive growth in less than a decade. While high risk investments can turn away many new and young investors due to the risk of low returns or total investment loss; the cryptocurrency industry seems to be going strong, and may end up being one of the most sought after assets in the next 5-10 years. We’ve gone through and compiled a list of seven great reasons why you should be investing in crypto now.
High liquidity is one of the most important factors to the continued success of cryptocurrencies. For one, high liquidity means a company can easily deal with things like short-term debt or profit losses; where as lower liquidity means a company may face bigger problems in circumstances of financial turmoil. High liquidity is great for Crypto due to its extreme volatile market, which can fluctuate in the realm of hundreds to thousands of dollars in the span of an hour. Many find that using dollar cost averaging can be a great way to avoid consistent losses and continue building a great portfolio in this rapidly fluctuating micro-economy.
In 2011, Bitcoin was worth roughly 0.80 cents. Now in 2021, it averages a value between $40,000-50,000 depending on the volatility of the market. What this shows you, is that investments in cryptocurrency not only rise significantly faster in value than stereotypical options on the stock market, but that they reach significantly higher profit as well. An average stock market return is roughly 18-30%, whereas many coins often double their price by anywhere from 50-80% in a years span due to hype surrounding them, institutional investing, and general buying from retail consumers.
One major factor for Cryptocurrency wide success is that they never ‘close’. Crypto exchanges, unlike the actual stock market run on a 24/7 basis. This allows investors to buy, sell, convert, or trade their coins at their leisure rather than having to wait for a market to open and submitting buy and sell orders in the mean time. Additionally, cryptocurrency is decentralized from everyday banks or financial institutions, its investments and transactions are not fully controlled by any country in the world. Additionally, some crypto exchanges even allow you to convert traditional stock market investments to crypto investments, giving you an even wider range of trading options.
One of the most important rules for investing is to diversify your portfolio. Diversification simply means holding multiple different stocks and cryptocurrencies at the same time, possibly leading to increased returns. On most major exchanges, there’s roughly 100-300 cryptocurrencies you can choose from. Doing some research and investing in 5-10 different types of coins can be a great way to maximize your returns and profits on top of whatever stocks and securities you’re holding as well. It’s recommended to do your research with any crypto investment, regardless of which exchange you’re using.
While most cryptocurrency exchanges offer hundreds of different options for investors, other smaller exchanges can feature more than thousands of cryptocurrencies. In fact, there’s new BSC and Ethereum tokens being created every day. Don’t take this as a signal to be reckless however, because some coins can be whats known as a ‘rugpull’, a project specifically created to attract investors before running off with the funds. Pay attention to how the cryptos are ranked on the exchange, as ones in the top 100 or even top 200 are likely to be more trustworthy than others.
In the beginning of cryptocurrency history, many people viewed it as a scam. While this can still be rather ambiguous with smaller projects, major cryptocurrencies clearly now have value as well as real life use cases. While crypto is indeed highly speculative in its value, its also incredibly unlikely that the millionaires, bankers, and financial institutions who have put their money and trust behind things like Bitcoin and Ethereum will pull their investments when the going gets touch. The faith many people have in these projects means that even if Bitcoin isn’t the next big thing, it’ll have a great future in the next decade.
Many companies have begun investing in cryptocurrency in the past 2 to 3 years. Tesla lead by Elon Musk has invested billions both in Bitcoin as well as Dogecoin. At the time of writing, there’s at least 50 large corporations holding cryptocurrencies as part of their companies overall portfolio. Moreover, many larger companies have also began mining cryptocurrencies for themselves in mass quantities in order to own a larger share of the market.
With all these points and others we haven’t mentioned, its clear Cryptocurrency isn’t going anywhere for a long time. Its a perfect time for beginner investors who are interested in this industry to get involved!
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