Top Reasons To Invest In Digital Assets

December 16, 2022

Byline: Hannah Parker

According to crypto statistics, it was found that there are approximately more than 1 billion people using cryptocurrency around the world. Research from July 2021 shows that 89% of American adults have heard of Bitcoin and that 46 million Americans (roughly 22% of the adult population) own a share of Bitcoin, with more than 250,000 confirmed transactions of Bitcoin daily. Cryptocurrency is increasingly becoming popular across the globe, not just among ordinary people and investors but different industries and traditional institutions, too, including central authority institutions. Is the hype around crypto justified? Yes, it is. This is mainly due to the core functions of crypto that are majorly influencing global economies and blockchain technology, which is now being adopted by leading brands and institutions across the globe. Though with a few hurdles, including the fact that digital currencies are quite volatile, crypto is evidently a fairly new means of creating wealth, allowing people of all kinds a fair and equal opportunity at building and attaining financial freedom. Below are the top 4 reasons why one should invest in crypto.

Why you should invest in cryptocurrency 

1. Your investment is not impacted by inflation:

Investments in the stock market are easily crippled by inflation as fiat currencies, and the stock exchange as an industry is centralized (owned/influenced/led by a central authority in the form of a government, bank, or third-party institution). Various factors affect the value of your investment, some of which include a factor known as “the announcement effect,” which refers to the impact that any type of news or public announcement—especially when issued by a government or monetary authorities—has on financial markets or investor behavior. Through the announcement effect, stock prices can quickly increase or decline upon releasing a positive or negative piece of news, presenting investors with headline risk and providing day traders opportunities to make short-term profits. In addition to this, government-issued announcements, economic data releases, or guidance from the Federal Reserve can also move and influence broader markets and investor sentiment. In contrast with the aforementioned, cryptocurrency rather protects your wealth as the industry is not impacted by inflation. How is this possible? Well, cryptocurrencies consist of decentralized financial systems, meaning the industry as a whole is not regulated or impacted by a central authority, as mentioned by Bitcoin XBT iFex 360 AI — a reputable crypto news site that further mentions that cryptos are not carried by one currency or dependent on one economy as they function globally, and the market is not tied to one nation.

2. Security and control:

Most digital currencies are secure and have fortified online security systems as compared to traditional banking systems. All cryptocurrencies are encrypted and function using blockchain technology, a system of recording information in a way that makes it difficult or impossible to change, hack or cheat the system. A blockchain is also a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.

Digital asset investors also have absolute control over their investments. This means that they can determine and oversee the buying, selling, sending, and receiving of cryptocurrencies using a private key that only they have access to for their investment.

3. Diversity of your financial portfolio:

A financial portfolio is a collection of financial assets that can contain a number of financial products like stocks, bonds, cash and cash equivalents, alternative investments, and even life insurance, property, or other assets. Financial portfolios are important as they provide a framework for your money. They help you oversee and manage your investments and can help you diversify your assets and spread your risk across stocks, bonds, and other types of investments.

Cryptocurrency grants individuals a unique opportunity to diversify their financial portfolios by dabbling in traditional stock markets and digital assets. Cryptos are an alternative path to creating financial freedom, one whose prices do not correlate with those of traditional markets. So, if an individual was to invest in both traditional and crypto by  ]combining assets with minimal price correlation, more returns could be generated. If your stock portfolio goes down, your crypto asset may go up, and vice versa or have both your stock portfolio and digital asset generate returns —an opportunity one would not have by leaning on and dabbling into one stream of investment.

4. Build wealth by earning potentially lucrative financial returns:

Similar to having risks when making an investment with the stock exchange, cryptocurrencies are known to be volatile and thus also have risks. However, one can earn lucrative financial returns with a crypto investment. As a concept, cryptocurrency is fairly new; thus, there is a vast pool of opportunities for wealth, especially when crypto is adopted by mainstream industries. For instance, whenever a coin is adopted by a popular brand or blockchain technology is being integrated into mainstream institutions, the dominating coins, Bitcoin and Ethereum, tend to increase in value, and the market price increases. Consequently, this gives those who invested in either coin early a chance to score high returns on their financial investment.

Digital currencies are steadily gaining traction and increasing in popularity among ordinary people, mainstream industries, and institutions. This is due to the fact that though it is a fairly new concept, the core functions and innovative technologies of crypto are increasingly changing the trajectory of global economies and daily life, further creating vast and equal opportunities for all people to create financial freedom. The hype around crypto is justified considering the billions of people who currently use crypto for different reasons, including the ability to diversify portfolios, build savings, make a quick fortune and make money for specific goals like education or travel.


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