Cryptocurrencies are digital assets created on blockchains, which are decentralized ledgers used to record transactions. These coins aren’t managed by any one individual or organization, making them highly volatile to trade. However, the crypto market is thriving, despite the recent market crash, making it a worthwhile asset to add to your investment portfolio. Below, you find a series of advantages to be found in cryptocurrency investments.
Accessibility
All you need to trade in cryptocurrency is a reputable wallet and an exchange. A crypto convertor calculator is also useful, which you can find at OKX.com. With the click of a few buttons, you can sell, buy, and trade crypto. Further, not everyone has access to a traditional bank, but the majority of people have access to a smartphone. These days, many ATMs allow people to buy Bitcoins using cash, which can be transferred to a phone and used for trading purposes.
Diversification
Whether you’re trading in stocks, forex, gold, or anything else, there’s always a risk involved. To mitigate the risks, it’s worth holding different assets within a portfolio. When it comes to crypto, it used to be viewed as a non-correlated asset, meaning it falls independent of the stock market. However, in recent years, it’s been traded in unison with other markets, making it a great option for portfolio diversification.
Volatility Payoffs
Volatility is a double-edged sword when it comes to cryptocurrency. On one side, there’s plenty of opportunity to lose money on your investments. However, if you’re patient and withdraw at the right time, you could increase your initial payment by thousands. The question to ask yourself is – “Can I afford the risk?”.
Reduced Fraud
When using traditional payment methods, like a credit card, you need to pass over your details. Although not maliciously, personal details including banking information can be breached. Whereas, when you deal in cryptocurrencies, you only need the receiver’s public key. During the transfer of funds, there is zero need to give personal details, making it almost impossible to crack an investor’s identity.
Asset Trading
Many people invest in cryptocurrency because of its appreciation, as mentioned previously. However, it’s also a viable payment method at countless eCommerce outlets and can be used to exchange assets. There are many benefits to businesses accepting Bitcoin payments including:
Inflation Protection
Many crypto users enjoy the likes of Bitcoin because there will never be more coins minted, which protects against inflation. Theoretically, when the growth of the money supply overtakes the Bitcoin supply, the value should increase. Bitcoin isn’t the only crypto to have coin-capping protocols: Chainlink, Stellar, Litecoin, and Cardano all have maximum supplies.
Conclusion
There are many risks involved when trading in crypto, but it’s easily a worthwhile asset to add to your portfolio. For example, as the market recovers and blockchain projects grow in number over the coming year, you’ll be along for the ride to benefit.
