Here are a few reasons why investing in cryptocurrency may be a terrific option for you, regardless of your trading experience!
Cryptocurrency is a speculative investment that has seen its fair share of highs and lows over the past decade. Many experienced traders have turned towards crypto investments to help diversify and strengthen their portfolios. Similarly, it is not common for first-time traders to start off by buying crypto as opposed to stocks and other tradable assets. Due to its high-risk to high-reward ratio, cryptocurrency is a highly appealing option. However, there are plenty of other reasons to invest in a cryptocurrency other than just using it to make a profit. Join us as we discuss the top reasons why you should consider investing in cryptocurrency!
How to Invest in Cryptocurrency
If you have decided that you want to start investing in cryptocurrency, there’s no better time than now! New traders are constantly entering the crypto space to expand their portfolios, but often the environment can be overwhelming for newcomers. That’s why we believe crypto platforms are the best first step for traders. With these platforms, you are automatically connected to a broker who offers various resources and tools to assist you as you trade.
All you need to do is create an account, and you can set off on your crypto trading journey! Typically, a crypto platform will use an automated algorithm to assign you a top-tier broker who can best help you as you begin your trading venture. If you’re unsure which crypto platform to choose, why not try out Immediate Edge? This user-friendly platform is packed with features and makes it easy to create an account and get in touch with a broker, so you don’t waste any valuable trading time when getting started!
Five Benefits of Investing in Cryptocurrency
Trading cryptocurrency isn’t suitable for everyone. But, if you’ve been considering it, perhaps it’s time for you to take the first step into your crypto journey. Here are a few reasons why investing in cryptocurrency may be a terrific option for you, regardless of your level of trading experience!
You Can Easily Diversify Your Portfolio
If you’re keen to start trading various assets, why not turn towards cryptocurrency? This digital asset is the perfect way to help you expand and diversify your portfolio since there are so many different coins to choose from!
Many new crypto traders start off with the beloved Bitcoin and Ethereum, as these coins are typically appealing options due to their long-term track records. However, there are thousands of other altcoins that you can also choose from and invest in to build up a diversified portfolio. These altcoins also have different use cases, making them more than just tradable assets.
For example, governance tokens are a type of utility token that allows traders to have a say in the development of a blockchain project. These tokens have been created to distribute control among stakeholders and decentralise decision-making. On the other hand, some types of coins, such as certain meme coins, have no real-world uses and are simply there to be traded.
Diversifying your portfolio is important as it can help reduce the overall price volatility of your holdings and help prevent you from losing all your assets at once. For example, if you’ve invested solely in a single coin or asset, if the prices plummet, then you can, unfortunately, lose your entire capital. However, if you have invested in several different assets, even if the price of one asset plummets, your portfolio will still be stable, as your other investments can balance out this loss.
You Can Protect Your Wealth From Inflation
Similar to other finite assets, such as gold, silver, and oil, cryptocurrency has a fixed, predetermined supply. This is opposite to how central banks operate, as they can continuously produce more money as they see fit. This means that cryptocurrency can typically resist inflation as opposed to fiat money, as inflation can be defined as when prices increase whilst currency’s purchasing power decreases. Of course, inflation can still affect cryptocurrency, but not as drastically.
Bitcoin is a fantastic example of a cryptocurrency that is highly durable against inflation. This coin has a limited supply and is not tied to any government or business. This means that the coin is not impacted by economic or political influence, which can often negatively affect the stock market.
Although it is not guaranteed, cryptocurrency investments have the potential to help protect you from inflation, making it worthwhile to invest in limited-supply coins such as Bitcoin. Please remember to do thorough research before trading crypto, as it is not a complete hedge against inflation. Therefore, it’s not wise to invest in coins purely on this basis.
You Can Make Anonymous Payments
Cryptocurrency offers a level of privacy that is not matched by traditional currencies. When you make a transaction with fiat currency, your identity is not hidden, and your transaction can easily be traced back to you. However, with crypto, you can remain pseudonymous. Pseudonymous is not quite the same as being fully anonymous, but it’s still close. Pseudonymous means that you are under a ‘false name’ (your wallet address), and although all your crypto transactions are related to this name, they cannot be used to identify you.
Since all transaction data on the blockchain is public, your transactions are linked to your wallet address which can be seen. But your wallet address is a unique number needed to send and receive cryptocurrency. This address does not reveal any personally identifiable information, such as your name, location, or contact details. This level of privacy is another reason why traders turn towards cryptocurrency to make transactions. It helps make cryptocurrency a more transparent and, therefore, safer alternative to traditional currencies.
You Can Avoid High Transaction Fees
Another advantage of investing in cryptocurrency is that you can use it to make low-cost transactions. Traditional forms of international transfers, such as wire transfers, are notoriously expensive, and costs typically vary between 25 – 35 EUR. Alternatively, sending crypto to a recipient anywhere in the world can cost you as little as 0.1 EUR (depending on which coin you’re sending). So, if you want to make international transactions, then it’s definitely worth having cryptocurrency at hand.
Another drawback of using banks to make transactions is that you are often limited to making these transactions during regular working hours. On the other hand, cryptocurrency is not bound by these hours, meaning you can buy, sell, send and receive it 24/7. Cryptocurrency also has much faster transaction times compared to traditional bank transactions as they do not need to rely on any third-party intermediaries. Crypto transaction times are influenced by multiple factors but can still be almost instant in some cases.
You Can Benefit from Security
The blockchain infrastructure is inherently secure and can put your mind at ease if you’re worried about protecting your assets. As we’ve already mentioned, all transitions on the blockchain are recorded and cannot be erased or edited, making it highly difficult for anyone to make fraudulent transactions or tamper with records.
Additionally, all cryptocurrency transactions are protected by cryptography. This encryption method is incredibly hard to crack, so you don’t have to worry about your assets being stolen or your transactions being intercepted. However, you should still remain cautious when buying or selling crypto as scammers are lurking everywhere, waiting for unsuspecting victims to fall into their traps. Phishing attacks are a type of scam that is very common in the crypto industry, and it is important to learn the signs of them, so you don’t end up losing your cryptocurrency assets. For instance, avoid clicking on unknown links and never reveal sensitive information to anyone you don’t know. You also need to be careful about the key to your wallet address because if you forget it, you’ll lose complete access to your crypto!
To summarise, crypto is an excellent asset to invest in as it comes with plenty of advantages compared to traditional forms of currency. If your main interest is building up a stable portfolio, then crypto is an easy way to diversify it and help you prevent losing your entire capital at once. There are tons of coins to choose from, and most have real-world use cases, giving you even more reason to invest in them. The way crypto can be transferred is also advantageous for users as it typically facilitates faster, cheaper, and more secure transactions than banks.
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. The writer may or may not hold investments in the companies under discussion
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