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Why You Should You Be Investing In Bitcoin and Other Crypto Currencies

Photo by Roger Brown on Vexels.

Make Your Own Crypto Opportunities

Over the last few months, crypto currencies, and the public’s awareness of them, have been exploding in a massive bull run. In April of 2020, one Bitcoin was priced at about $7000, whereas this past April, Bitcoin was trading at around $55,000. In other words, the price shot up by over 8 times its value in just one year!

And Bitcoin is not the only crypto currency to keep an eye on. Since the creation of Bitcoin and the concept of crypto currencies, over 5000 crypto coins have been created.

Why Crypto Isn’t Going Anywhere

Contrary to pre-conceived notions, many of these crypto coins were created with the purpose of being used as a practical currency. With blockchain technology, which is what these coins use, individual transactions can be carried out and verified without a third party, such as a bank.

That is why many of them use blockchain technology in innovative ways to make independently exchanging goods a reality. Some coins were expressly created as a method of legitimizing and verifying digital smart contracts.

As these technologies improve, they become more widely accepted, and therefore useful. JP Morgan is creating financial instruments, similar to mutual or index funds, compiled of the most prominent crypto currencies, for its customers to invest in.

More businesses are beginning to accept crypto currencies as a valid form of payment for goods and services, and crypto credit cards are currently in the process of development.

Photo by David McBee from Pexels.

Crypto Is Seen As A Hedge Against Inflation

In addition, there are millions of people concerned about the effects of inflation moving forwards. In the United States, over half of the money supply was printed and minted in 2020. The effects this will have on the economy could be tremendous, but since an event like this is unprecedented, it is difficult to say how extreme that impact will be.

That is why some have turned to precious metals, stocks, and crypto currencies, in the hopes that these stores of value will protect their assets from being obliterated by inflation.

For these reasons, it seems that crypto currencies will not be going away anytime soon; in fact, they may even become an integral part of the economy.

And since it is more likely that crypto coins will continue to increase in value and utility, it might be a good idea to invest.

Taking Action

That being said, crypto currencies are still an extremely volatile market, which has been in a massive bull run, which currently seems to have cooled off, presenting an opportunity for savvy investors to pick up coins at a discount.

However, attempting to time the market is risky, and attempting to time the market with more money than you are comfortable losing is sheer foolishness.

So one of the best ways to mitigate this risk is to dollar cost average. This just means investing a set amount of money at regular intervals. An example would be investing $100 per month, every month. By investing regardless of market conditions, you reduce the risk of losing money were you to invest right before a dip or market correction.

Fortunes can be made or lost in an instant. The investor who dollar cost averages for the long term, not the short term, will likely come out on top-and that could be you too.

This article does not constitute financial advice. Before making any big financial decisions, consult a registered fiduciary financial advisor.

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