Reasons to Invest in Cryptocurrencies: Introduction
Is crypto a good investment?
Cryptocurrency and blockchain technology have taken the whole world by storm, so it’s no surprise that more and more people are turning to crypto investing.
There are various reasons why people invest in cryptos to meet their financial goals.
However, there are those that invest in the crypto market for the wrong reasons.
Here the top 15 reasons why every investor should have cryptocurrencies in their portfolio.
15 Reasons to Invest in Cryptocurrencies
1. Cryptocurrencies Have Revolutionised Our World
It’s been a little over a decade since the launch of Bitcoin – the first crypto ever. And yet, thousands of tech advancements, innovations, and changes have already occurred in the dynamic world of cryptocurrency trading.
With their decentralised nature, cryptocurrencies have changed traditional financial systems to a point of no return, facilitating transactions beyond borders at low costs and fast processing times.
The great news is that the need for central banks is reduced to a minimum, giving investors significant freedom and control over their financial data and money.
And guess what! Crypto investing is not a millennial whim but a reality: cryptocurrencies are here to stay and are worth investing in. The number of crypto projects is increasing, and according to data, there are over 5,000 cryptos to invest in out there.
2. Cryptocurrencies Are Marked by High Liquidity
If you are still not sure if crypto trading is for you, then we have another valid reason to invest in cryptos this year. The world of cryptocurrency trading is marked by high liquidity, which means that it’s easy to buy and sell cryptos.
When it comes to Bitcoin, for instance, there’s always high demand for the king of all cryptos. Data show that the number of crypto wallets in 2020 has increased to more than 54 million.
It’s not only ambitious investors and big businesses that are ready to buy and sell cryptocurrency. Crypto trading today is highly accessible.
After all, cryptocurrency trading is not some kind of rocket science or a mysterious venture reserved for the big whales in the industry. You can also become a part of the world of crypto investing today!
3. Cryptocurrency Investment Can Lead to High Returns
Perhaps the main motivator for people to invest in cryptocurrency is the possibility to make a profit. Like it or not, money makes our world spin and is one of the main reasons to invest in cryptocurrency.
Though crypto trading is relatively new, cryptos can lead to higher returns compared to other assets, such as stocks. Cryptocurrencies are highly volatile, which means that one can potentially achieve high returns from a single trade.
At the same time, let’s not forget that volatility also means that traders can lose it all in a second. So always consider potential risks! As cryptocurrency investing can be highly demanding, one of the first steps to success is to devise an effective risk management strategy to limit losses.
4. Cryptocurrency Gives You Independence & Flexibility
Whether you decide to invest in Ethereum or Tezos, your crypto money is only yours. As stated above, cryptocurrencies do not rely on banks that have exorbitant fees just to hold your money.
Moreover, the crypto market is open 24/7, so you do not need to worry about opening times; you can choose when and how you want to buy and sell. Isn’t it a good enough reason to invest in cryptocurrency?
That’s right! It’s all up to you to organise your time and trading routine. You can trade either full- or part-time; you can trade cryptocurrency while travelling as well. How cool is that?
5. For Portfolio Diversification
Looking for more reasons to invest in cryptocurrency? Even if you are not a crypto enthusiast, investing in cryptocurrency is a great option in order to diversify your portfolio.
What is portfolio diversification? It’s simply a great method to reduce risks by spreading your investments and exploring different assets. As people say, you shouldn’t put all your eggs in one basket, right?!
Because cryptocurrency usually doesn’t move with assets, such as bonds and stocks, investing in cryptocurrency is a clever way to establish yourself as a successful trader in today’s dynamic and constantly-changing world of finance.
6. Unlimited Choice of Coins
Even though nobody questions Bitcoin’s authority in the world of crypto investing, the truth is that there are thousands of altcoins to buy and sell out there. You have an unlimited choice of coins to help you diversify your portfolio and potentially increase your wealth.
While some undervalued coins might be a tricky investment, others do deserve your attention and are a good reason to invest in cryptocurrency. Experts believe that some of the top cryptos to explode next year are Ethereum, Ripple, Tezos, Tether, Monero, and Bitcoin Cash.
You don’t have to limit your options to buying and selling cryptos. You can also trade a wide range of crypto/crypto and crypto/fiat trading pairs, with BTC/USD, ETH/USD, and LTC/USD being among the most popular crypto to fiat pairs to trade.
7. The Future Cryptocurrencies Seems Bright
Do you need more reasons to invest in cryptocurrency? Here is our reason No.7: The future of cryptocurrency seems bright. While we all know that cryptos are highly volatile, investing in cryptocurrency can be a safer and more promising alternative compared to other assets.
Take Bitcoin, for example. Bitcoin has had a jagged history and has even been declared lost multiple times. For instance, in 2017, Bitcoin reached new all-time-highs of $20,000, while in 2018, it fell below $5,000. Yet, Bitcoin has survived its ups and downs - and keeps thriving during the ongoing pandemic (with a current price of $15,826) - so investors are quite positive about its future.
In fact, many believe that investing in Bitcoin in times of financial uncertainties is safer. As Snappa (Canada’s leading software company) co-founder Gimmer said, “Would you rather save money in a currency whose supply is inflating each year? Or would you rather save in a currency whose terminal supply is programmatically fixed?... Fortunately, I believe we now have a far superior savings technology available to us. That technology is Bitcoin.”
Would you consider investing in the crypto market?
8. Cryptocurrency Offer Security and Transparency
Even though many people still associate cryptocurrency with illegal activities and notorious scams, such as OneCoin, investing in cryptocurrency is a promising venture, with more and more people putting their trust in cryptos instead of fiat currencies.
As Satoshi Nakamoto - the mysterious figure behind Bitcoin - once said, “The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.”
On top of that, many cryptos are based on blockchain technology that is considered almost unhackable. Blockchain transactions are encrypted, signed by a private key and verified by a public key. At the same time, the technology offers high levels of transparency – which is another major reason to invest in cryptocurrency.
9. Blockchain Technology Can Transform the World
Looking for more reasons to invest in cryptocurrency? One doesn’t have to be a blockchain developer to see the potential of cryptocurrency and blockchain beyond crypto trading.
With the increasing use of smart contracts and decentralised apps, blockchain technology can benefit different sectors, including gaming, medicine, businesses, and voting. Just ask any gamer about the impressive innovations blockchain-based technology can bring into the world of gaming and digital ownership!
During the ongoing pandemic, in particular, more and more people are turning to blockchain and digital payments to reduce the risk of new outbreaks. Data show an increase in the downloads of crypto apps during the COVID-19 lockdown in 2020. Now even sceptics and strict governments are more positive about cryptos, with regulations becoming much more clearer.
10. Everyone is Going Crypto, Even Wall Street
With the increasing interest in cryptocurrency worldwide, more and more organisations are going crypto. Ripple, for instance, is an impressive coin used by many big financial organisations. Let’s not forget that unlike the current SWIFT system employed for international payments, Ripple allows users to send money beyond borders at low costs and quick processing times.
Believe it or not, two of the leading crypto exchanges in the whole world, Gemini and Coinbase, are now banking clients of America’s giant JPMorgan.
Governments are also embracing cryptocurrency and going crypto. While many are trying to develop their own central bank digital currencies, others (like Italy) have recognised Bitcoin inheritance. The interest in crypto investing is also increasing in emerging markets, such as Kenya and South Africa.
And guess what? Major merchants like Virgin Galactic and Microsoft also accept payments in Bitcoin. Do you really need more reasons to invest in cryptocurrency?
11. Learn New Skills
Whether you decide to buy Bitcoin or trade different crypto pairs, the truth is that you need to invest in proper trading education to master the art of crypto investing.
Even if you don’t become a millionaire by investing in cryptocurrency, your learning journey will have a positive impact on your trading skills and financial decisions. From day trading strategies to trading psychology tips, learning about crypto investing is more than valuable and worthy.
In addition, while trying to improve your financial skills, you will be able to improve your discipline, emotional self-control, and habits as well. After all, learning is a lifelong journey.
12. Crypto Investing Has Never Been So Easy
And reason No.12 to invest in cryptocurrency is that… It’s never been so easy to invest in cryptocurrency. Today’s tech-driven world allows people from all walks of life to learn about cryptocurrency. From online courses to trading psychology books, one can learn crypto trading for free.
The amount of trading information today is impressive. More and more sites and forums provide valuable crypto information and are quick to expose scams. One can easily find a coach or learn from the best in the field. Just look at some of the crypto kings and their success stories!
Online platforms and smart devices make cryptocurrency investment simple; all you need to do is open an account, deposit funds, and start trading.
13. Low Entry Threshold
While some types of investment, such as stocks and real estate, require a lot of initial capital to start investing, cryptocurrency has a low entry threshold. Isn’t that a great reason to invest in cryptocurrency?
The good news is that many platforms out there do not require big sums to start buying and selling cryptos. You can start trading cryptocurrency with as little as $100.
And no, there’s no need for complicated and time-consuming procedures and burdensome paperwork.
14. Exchanges are Highly Secure and Offer Valuable Tools
While we all remember the tragic story of the notorious Japanese exchange Mt. Gox, the good news is that today’s exchanges are more secure and may even reimburse victims in case of a hack.
Today, a trader can find a reliable exchange that allows them to start buying and selling digital assets; a trader can also find a trustworthy broker to help them trade CFDs (a great option for beginners).
Trading tools are much more user-friendly than before, and crypto sites help investors stay up-to-date with crypto news and major events in the industry. A great reason to invest in cryptos, right?!
15. Never Too Late to Invest in Cryptocurrencies
Whether you are a successful Bitcoin investor or a crypto enthusiast, it’s never too late to start investing in cryptos. Though some believe that the time to make millions (like some of the early adopters in the industry) has passed, the truth is that crypto investing is still a hot topic.
Actually, cryptocurrency and blockchain have a long way to go, so even in 2021, you can still be considered an early adopter. The feeling of investing in something so innovative is simply overwhelming!
15 Reasons to Invest in Cryptocurrency: Key Points
- The Cryptocurrency market is open 24/7 and comes with thousands of cryptocurrencies in existence.
- Investing in cryptos is a great way to increase your wealth, diversify your portfolio, and learn new financial tricks.
- The decline of the stock market investment may leads to an increase in the price of cryptocurrencies and gold and hence cryptos are the perfect investment to make if you want to diversify your portfolio.
- Let’s not forget that blockchain technology has impressive applications beyond the financial sector, so more and more governments are considering investing in cryptos to reduce outbreaks during the ongoing pandemic.
It’s never too late to invest in cryptocurrency market. So stop looking for more reasons to start your cryptocurrency journey.
eToro – The Best Platform to Buy Cryptos
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Cryptocurrencies are highly volatile. Your capital is at risk
With eToro, you can start buying and selling cryptos, or trading CFDs, of over 90 cryptocurrencies.
Investing in cryptos is worth considering.
Happy Investing!
Trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.