Just a decade ago, financial experts would have advised against holding cryptocurrency in one’s investment portfolio. Most people thought that Bitcoin and other cryptoassets were just fads and that investing in crypto was a fast track to failure. But now, in 2021, cryptocurrency is more prevalent than ever. Fortune 500 companies are offering BTC as a payment method, and more people than ever have some sort of crypto.
Investing in crypto is no longer considered a fool’s dream. It can be a smart investment move, and here’s why:
- Cryptocurrency Retains Its Value
Most existing cryptocurrencies, such as Bitcoin, are deflationary by nature. This is done by limiting how many coins can be mined - Bitcoin, for instance, has a cap of 21 million coins. Due to this cap, Bitcoin and other cryptocurrencies that use this mechanism are immune to inflation. Their value retention is incredible, even during an economic collapse. - No Intermediaries Are Necessary
When a crypto owner sends crypto to somebody, a peer-to-peer transaction takes place. The crypto is deducted from the sender’s wallet and is sent to somebody else’s public key. No intermediaries are involved, as opposed to a bank transaction, in which the bank would decide whether to accept or reject the transfer. So, why does this make cryptocurrency a good investment choice? If one is looking to diversify their assets, they can rest assured that their cryptocurrency is controlled by them alone and can’t be seized by a central authority. - The Government Can’t Interfere
A government’s actions or policies can significantly alter the value of fiat currency, wiping out investors’ hard-earned savings. But, because cryptocurrency is unregulated, the actions of a government won’t have a huge negative impact on the crypto’s value. Investing in Bitcoin is a natural way to protect one’s investments from the fragility of traditional financial institutions and governmental influence. - Cryptocurrency Can Be Used As a Hedge
For decades, gold and bonds were considered traditional “safe haven” investments during times of uncertainty. Now, cryptocurrency is proving itself to also be a good safe haven. Crypto, in the immediate term, has formed a reputation as a counter wright to stocks - but, what’s more, it helps investors avoid having too much exposure to USD. - Mainstream Adoption Is Rising
Investors who pay attention to long-term trends should consider the gradual mainstreaming of BTC, ETH, and other “blue chip” cryptocurrencies. Some of the world’s biggest, most innovative companies (like Square and Tesla, for example) are stocking up on crypto in bulk. And consumers can now use crypto to pay for more goods than ever - from buying pizza from Pizza Hut to getting supplies at Home Depot. This speaks volumes about cryptocurrency’s long-term viability.
In a time of economic uncertainty, BTC and other cryptocurrencies have proven to be sturdy assets that can withstand global crashes. What’s impressive is that crypto is arguably still in its infancy stage, so one can only imagine how much stronger it will grow. Investing in cryptocurrency is a smart decision, when considering all of the above factors.