One beautiful thing about making investments in cryptocurrency is the fact that you don’t need to become an expert before you begin to make such investments. All you really need is the right knowledge and guidance. Whenever people tell me that they want to invest in crypto, I usually tell them to start by asking themselves “why?” “Why should I invest in crypto?” This article answers the question.
1. Increasing popularity
Cryptocurrency is fast becoming a mainstay in the global financial ecosystem. Bitcoin, Ethereum, and EOS amongst others are gaining traction and causing ripples all over the world. If there was ever a good time to invest in cryptocurrency, that time is now. In the next few years, cryptocurrencies would be all over the place, everyone would own some and the opportunity to be an early adopter would no longer exist.
2. Big Tech, big money.
Today, the bulk of technologically enabled persons are well aware of the existence of cryptocurrency. Big giants like Tesla Facebook, Microsoft and Twitter are publicly signalling their support for the technology. There is no major multinational organisation or tech giant who isn’t building a blockchain-related product. With big tech guns like Elon Musk continuously speaking about cryptocurrency, the interest is sure to keep rising.
3. COVID 19 Pandemic
The COVID-19 pandemic and the resulting economic turmoil has also contributed immensely to the growth of cryptocurrency. The cryptocurrency market, and especially bitcoin, turned out to be one of the most resistant to the turbulence experienced by all global markets during this period. The start of March was a torrid period for major global markets as the news of the coronavirus pandemic spread. The drastic fall of the stock market and massive dip in oil prices are notable results of the fear and uncertainty that came with the pandemic.
In panic, investors converted their holdings into cash, causing a liquidity crisis. Even the cryptocurrency market wasn’t excluded in the early days of this anxiety which caused a plummet in the prices of bitcoin and altcoins. However, the cryptocurrency market quickly bounced back, rebounding to reach its highest point of all time in terms of market cap and the breaking of all-time highs for a number of coins. This quick recovery is a brilliant show of the market’s resilience. The sentiment towards cryptocurrency has turned bullish to the point where China declared it as the number one asset of 2020 because of its outstanding performance in the middle of financial turmoil as it clearly outperformed all other mainstream assets
4. Inflation
Investing in crypto is one of the smartest things you can do in 2020. Negative interest rates, hyperinflation in many countries, trade wars, e.t.c indicate that we are heading for a major financial crisis.You should invest in crypto because it would give you a hedge against the Naira or the dollar or any other government-backed currency which are generally prone to inflation. Venezuela, Zimbabwe, Sudan, Argentina, are facing an economic crisis because of bad monetary policies. In Venezuela for example, you’ll need a wheelbarrow of cash to buy tissue paper because the money has lost a lot of value because of hyperinflation caused by excessive printing of money.
For example, the Venezuelan bolivar has become near-worthless, following a severe economic downturn. To show the extent to which hyperinflation has gripped the country, Reuters photographer Carlos Garcia Rawlins created images of everyday food and household items alongside the amount of money it costs to buy them. A 2.4kg chicken has been costing 14,600,000 bolivars (equivalent to $2.22, or £1.74) in the capital, Caracas.
CONCLUSION.
In light of these few reasons, it is only logical to get into cryptocurrency as soon as possible in order to reap the benefits of being an early adopter in the long run. In the coming years, cryptocurrency is sure to gain more traction and attain widespread acceptance. It is left to anyone to position themselves properly for that.
