Investing in Cryptocurrency is the riskiest form of investment. Despite this, many investors in the world today are looking for a coin or token to invest in.
Volatility is the major concern with cryptocurrency; the price of these digital assets can change at any point time just as it is with the bearish market today. This is a fact that is known by almost everyone in the financial market yet investors want to put their hard-earned money into it.
In this post, we’ll see the top reasons why people invest in cryptocurrency today. Before then, let’s see what cryptocurrency is all about.
What is Cryptocurrency?
Cryptocurrency is any form of currency that exists digitally or virtually. This means that it cannot be held like the traditional currency. As a digital payment system, its transactions are secured by cryptography.
Cryptocurrency is decentralized meaning there’s no central issuing or regulatory authority. They are run on a public ledger called Blockchain. It is a record of all transactions updated and held by its holders.
The first cryptocurrency created was Bitcoin, which was founded in 2009 by a person or group with the pseudonym, Satoshi Nakamoto.
Bitcoin remains the biggest and most popular cryptocurrency. There are over 20,000 other cryptocurrencies created after bitcoin which are referred to as “Altcoins”. Some of these altcoins include Ethereum, Solana, Tezos, Dogecoin, Litecoin, Cardano, Elrond, and so on.
Why People Invest in Cryptocurrency
Here are the major reasons people put their money into a crypto investment. These are also the reasons it has mass adoption and gained popularity.
1. High Return on Investment
Cryptocurrencies have equity potentials which makes many people around the world see them as a means of making money quickly. Many who invested in Bitcoin during its early days became overnight millionaires.
Although the return on investment is not guaranteed, crypto can surely give you a huge return on investment. There are however things to do before investing in Cryptocurrencies. Many however trade to earn from profit. You can buy and sell Bitcoin in Nigeria using trading platforms.
2. Store of Value
Cryptocurrencies can be held on a short and long-term basis. The returns can be much higher if stored for a long period. For example, crypto investors who invested just $1000 in Dogecoin in early 2021 had at least $14,600 in about 5 months later.
The long-term growth of cryptocurrencies can’t be beaten by any other asset class. For this reason, many want to hold these digital assets. Cryptocurrencies such as Bitcoin are however the less risky asset for long-term investment due to their real-world use cases. While many digital assets are fading out, it has been predicted as the future of money.
3. Ease of Transaction
There have been issues with traditional banking systems which led to the creation of a peer-to-peer electronic cash system. This means you can make transactions peer-to-peer, anytime, and anywhere. Crypto, its related exchanges, and trading platforms are both easy to access and liquidate.
You can wire your funds with freedom when using digital assets. Many for this reason learn how to trade crypto to earn passive income. Some people use crypto for illegal activities such as money laundering, this is one of the reasons it is not legalized in many nations of the world.
Cryptocurrencies give you ownership of the coin/token you buy. Many of the crypto tokens provide you with governance and ownership of what you buy. With cryptocurrencies, you are not only a user but also an owner.
You’ll have your digital wallet which has a unique address for you to store your digital assets.
When you own a crypto asset, you can become a member of the crypto project. Investors can be involved in the project’s decisions as a holder.
5. Diversify Portfolios
Cryptocurrencies are a good option for many that are looking for a way to diversify their portfolios. It is an awesome alternative to stock and bonds. For this reason, many are looking for crypto assets to put their money into.
There are many crypto assets you can buy or invest in. Bitcoin, Dogecoin, Ethereum, Litecoin, Cardano, Shiba Inu, and USDT, are some of the top cryptocurrencies people choose for investment.
You need to be updated about the recent development in the crypto world. You can do this by getting the latest Bitcoin news in Nigeria and other crypto assets. Prestmit, a digital exchange platform is one of the best places to trade crypto assets and sell gift cards in Nigeria.
The Bottom Line
The adoption of cryptocurrencies is increasing in our world today. The investment opportunities that come with it make it one to consider for investors today. The risks attached to cryptocurrencies however are what should be looked into before investing.