Cryptocurrency. It sounds like something out of a futuristic science-fiction film. The thing is, though, it’s in the here and now and it’s taking the world by storm. While it seems like a recent phenomenon, cryptocurrency has been around for a decade now. In that time, crypto has evolved and grown significantly.
While Bitcoin was the first official cryptocurrency, there are numerous ones out there today. They have all turned into an investment asset class. People all over are putting their money into cryptocurrency instead of stocks, bonds, or real estate. If you’re thinking about investing, here are six reasons to consider crypto.
Bitcoin reached an all-time high of $20,000 in 2017. While it plummeted to just over $3,000 the following year, its value is on the rise once again. As of October 2019, it is currently worth almost $8,000.
The biggest reason why Bitcoin can rise so quickly is due to a process called halving. This process is built into Bitcoin’s code. It causes both the mining difficulty and inflation to adjust periodically, reducing the number of Bitcoins that are released. When this happens, there tends to be a positive long-term impact on Bitcoin’s price.
Bitcoin (and other cryptocurrencies) transactions all take place on the Blockchain. This allows for complete transparency. All transactions can be viewed and asset allocation is clear. The entire community can view the Blockchain whenever necessary. Additionally, Blockchain provides security. Transactions are much safer compared to bank transfers.
Investing is Simple
Investing in cryptocurrency is incredibly simple. If you have money to invest and internet access, you can invest whenever you want. First, you will need to purchase Bitcoin (or another cryptocurrency) online using a card. You will also need to create what is known as a cryptocurrency wallet. Some wallets are specific to one form of crypto while others can store multiple types. You can then get onto an exchange platform and create purchase offers or answer ones already there. To make a profit, you’ll need to keep track of the price fluctuations and sell your coins at the right times. Just make sure that you don’t invest what you can’t afford to lose.
You Have Control
One of the most appealing things about cryptocurrency investment is that you have complete control over your funds. When Bitcoin was first developed, its purpose was to allow for digital transactions without bank interference. Cryptocurrencies are based on decentralization. There is no middleman. You are in total control and can access your funds whenever you want.
While cryptocurrency is decentralized, it is important to note that it can be taxed. You do need to report your crypto to the IRS when filing taxes. The process can be confusing. Fortunately, you can use cryptocurrency tax software to help make it easier.
It Can Be Used as Payment
While cryptocurrency is a great investment, its primary function is to serve as a form of currency to make transactions without the involvement of a third party. Just like any other form of digital payment, cryptocurrency can be used for everyday transactions. It’s predicted to become a global form of digital payment, which may lead to a growth in value.
It’s Gaining Popularity
Cryptocurrency is gaining popularity among financial institutions and government agencies. As interest in crypto grows, these sectors are discovering a major opportunity. Some, such as Goldman Sachs and JP Morgan, have already started getting involved. The Japanese government has adopted crypto as a legal method of digital payment. With banks and governments starting to realize its potential, it’s sure to continue to grow.
Cryptocurrency may be a fairly new way to invest, but it’s a promising one. These blockchain-based payment networks offer complete transparency. They’re decentralized and could potentially change the way things are done. People are starting to take notice. As they continue to increase in value, investors are being rewarded with incredible returns on their investments. If you’re thinking about investing in crypto, there’s no better time than now.