Since the inception of bitcoin all these years ago, the cryptocurrency market has sparked a new wave of interest around the world. As interest increases, new investors and traders flood the market. However, many are bewildered by the sheer number of cryptocurrency options. But why should you invest your hard earned money in this market versus the stock market or Forex? What makes it so attractive to millions of investors around the world? Keep reading to find out.
Crypto vs. Actions
Although the cryptocurrency market is known for its volatility, it should not be confused with ‘risk’. Cryptocurrency is a lot like stock trading: the risk and rewards are proportional to the amount of capital you spend. In the long run, the benefits of investing in cryptocurrency will far outweigh the risk of losing money. The best way to understand why cryptocurrency trading is a wise investment is to compare it with trading stocks. Most people who think of cryptocurrency trading will be after a short-term reward greater than what they could get from the stock market. While these results can be seen as short-term compared to stocks, many investors will hold onto for years until they believe the time is right to cash out. Nonetheless, savvy investors can make life-changing money. Besides the monetary reward, there are other reasons why you should invest in crypto.
the the advantages of decentralized currency are numerous, from freedom of transaction to low fees and confidentiality of payments. However, the most discussed benefit of using decentralized cryptography is that you can store your digital wealth more securely than storing data on a centrally controlled server. A lot of people like the idea that they can completely control the way they buy and sell things, and if you invest in major players like Bitcoin, you will have a method that is independent of government control. In addition, decentralized currency will probably be the currency in the future or will coexist with the more conventional ones.
You can win big
While the decentralized point is worth mentioning, it is nonetheless true that most people want to invest to make money. Although crypto trading is not a magic money tree, it can generate huge returns if you are proficient at trading. The best part about crypto is that it’s never too late. You can always stay steady and wait for the next big thing to happen. No one would have imagined that a coin like Dogecoin would explode as quickly as this year. Yet due to the intervention by Elon Musk, a lot of people have made a lot of money (while others have hit the wall for not investing more!).
You can diversify your portfolio
In portfolios made up predominantly of equities, cryptocurrencies like Bitcoin can offer good diversification. The prices of cryptocurrencies and the US stock market are virtually uncorrelated. So, the crypto market is unaffected by stock movements, and the reverse is also true. Therefore, when there is instability in the world and stock prices collapse, you may find your crypto investments static or even rising.
Crypto has made its way into the world and is here to stay. There are various reasons for investing, but maybe the top three are that it’s decentralized, has the potential to deliver large amounts to you, and can diversify other investments you might have.
Interesting related article: “Cryptocurrency – Definition and Meaning”