Should I Invest in Cryptocurrency? Reasons to Invest Now
With interest rates plummeting globally and the stock market showing signs of vulnerability, cryptocurrency investments seem to be the flavour of the town. However, crypto investments can be risky, and people still ask, ‘Should I invest in cryptocurrency?’ So, here is a discussion that examines the reasons to invest in cryptocurrencies now.
You might have heard this story that in May 2010, a Californian student, Jeremy Sturdivant, received an intriguing request offering 10,000 bitcoin to deliver two pizzas to a Floridian resident, Laszlo Hanyecz. Though the request sounded bizarre, he accepted the deal and arranged for the delivery, making it the first physical purchase made with bitcoin.
On May 22, 2010, the deal was worth $41. Unaware that bitcoin values could reach astronomical heights, Jeremy spent the money to cover his business trip expenses. This incident does not have much consequence except for the fact that 10,000 bitcoin today have a value of more than $380 million. Which investment would ever generate such astronomical returns? If only Laszlo or Jeremy had held on to the bitcoin, they would have been multi-millionaires today. So, if you ask, ‘Should I invest in cryptocurrency,’ this incident proves that you should.
Why Should I Invest in Cryptocurrency?
Any investment is a personal decision, and one should understand the benefits and drawbacks before investing in a specific asset. Below are nine reasons to answer the question, ‘Why should I invest in cryptocurrency?’:
1. Easy to begin with: Though the cryptocurrency concept appears complex, technological advancements have made it easy to explore the investment option. Signing up for a trading account with a trusted crypto exchange and creating a crypto savings account is a straightforward task today with platforms such as POKKET.
2. Portfolio diversification: The golden rule of investment teaches you not to put all your eggs in the same basket. Investing in cryptocurrency provides you with opportunities to diversify your investment portfolio, with the option to invest in Bitcoin, altcoins, stablecoins, NFTs, and more. Furthermore, similar to a typical bank account that gives you interest on your savings, you can generate a considerable passive income by holding your crypto through a crypto savings account.
3. Astronomical returns: The incident described above proves that an investment in bitcoin can generate tremendous returns. Bitcoin reached the $1 mark on February 9, 2011. Today, eleven years later, Bitcoin has a value exceeding $38K.
4. Greater transparency: Cryptocurrency transactions work on encrypted, publicly distributed ledgers with no chance of alterations or manipulations.
5. Higher acceptability: Cryptocurrency has changed significantly since May 22, 2010, Bitcoin Day. Many e-commerce websites and businesses accept cryptocurrencies as valid transactional value today.
6. Unrealized potential: What the world knows today about cryptocurrencies and the blockchain is just the tip of the iceberg. However, the unrealized potential of blockchain is massive. This has already been proven by the decentralized financial ecosystem, which is gaining more and more prominence by the day.
7. Tremendous scope: The future of monetary systems is in cryptocurrencies. The below graph is self-explanatory; it shows daily transactions in cryptocurrencies from January 2017 to November 2021.
8. Increased awareness: People today are more aware of how cryptocurrency works. With a plethora of online resources available, it becomes possible to make informed decisions.
9. Blockchain is here to stay: Blockchain has not yet reached saturation levels. Besides, technological improvements and increased awareness have resulted in its widespread acceptance. It is similar to how the potential of the internet was not realized in the late 1990s, and today, life would seem impossible without the internet.
Should I Invest In Cryptocurrency Now?
The above list elaborated the nine reasons to invest in cryptocurrency. However, many people are still in doubt, given the current Russia-Ukraine war scenario. The question is whether it is worth taking the plunge right now? If you had asked this question five years ago, the answer would have been an emphatic YES. On December 31, 2016, the Bitcoin price was $963.74 per bitcoin. Today, it is in the range of $38,000. The below piece of statistics should explain things better.
The graph shows how the price of bitcoin moved from October 2013 to March 2022. Since October 2020, the prices have fluctuated wildly, with Bitcoin crossing the $60,000 mark in June 2021. However, the graph shows no drastic fluctuations during the days of the Russian war. So, if you ask, ‘Should I invest in crypto now,’ the answer would still be a YES. The following prospects for the future will support the decision further.
- Chances of appreciation: Though Bitcoin’s value has come down drastically since the highs attained in 2021, the trends show that Bitcoin price should touch the $100,000 mark in the forthcoming future. Cryptocurrencies tend to be volatile in the short-term and show growth long-term.
- Higher institutional adoption: More retailers, especially e-commerce websites, have started accepting cryptocurrencies as payments. Fintech establishments are also allowing users to purchase crypto on their platforms. The situation can only improve. The more the demand, the higher its value.
- Crypto ETF approval: Bitcoin ETF debuted on the NYSE in October 2021. Thus, it opens a more conventional way of investing in crypto. More crypto ETFs are likely to get launched in 2022 and beyond.
- The clarity in crypto regulation: With more countries regulating cryptocurrencies, it has become safer for investors and less appealing for malicious actors. Better regulation can increase taxes on crypto gains, but it is a good thing for investors because it guarantees the safety of their investments.
How to Invest in Crypto And How Much?
After learning the prospects of crypto investments, now the question is how to invest in crypto. One of the ideal ways to invest in cryptocurrencies is through reliable crypto establishments, such as POKKET. POKKET is a cryptocurrency savings platform created by financial and technology experts. It offers the flexibility to earn interest on your idle cryptocurrency investments. Such crypto investments help you hold on to your assets and gain from price appreciation in the future.
Though there are many good things to say about crypto investments, you could wake up one morning to see that certain countries have banned cryptocurrency. This worry brings up the question, ‘How much should I invest in crypto?’ The amount to invest in crypto depends on the individual. However, prudence says that one should not invest more than one can afford to lose. The recommended share is between 2% and 5%.
Final Words
Investment in cryptocurrencies seems attractive because of the tremendous appreciation in their prices over time. However, there is an element of uncertainty. Therefore, the answer to those who ask, ‘Should I invest in cryptocurrency?’ is this: Investment in cryptocurrencies is profitable but can be risky. While one should reap the benefits of crypto investment prospects, one should also be careful while investing. If you are not experienced in crypto, it would be best to seek guidance from experts. There are many reasons to use crypto savings platforms like POKKET, where you get excellent opportunities to earn passive income while holding on to your crypto assets.
References
Markets Insider. Bitcoin Price.
https://markets.businessinsider.com/currencies/btc-usd
Best, R. (2021, November 9). Number of daily transactions on the blockchain in Bitcoin, Ethereum and 13 other cryptocurrencies from January 2017 to November 7, 2021Statista.
https://www.statista.com/statistics/730838/number-of-daily-cryptocurrency-transactions-by-type/
Best, R (2022, May 7). Bitcoin (BTC) price per day from October 2013 to March 7, 2022. Statista.
https://www.statista.com/statistics/326707/bitcoin-price-index/
Haar, R (2022, February 9). The future of cryptocurrency: 5 experts’ predictions after a ‘breakthrough’ 2021. NextAdvisor.
https://time.com/nextadvisor/investing/cryptocurrency/future-of-cryptocurrency/
