Cryptocurrency fever might have worn down over the last few months, but it didn’t pass, and experts believe a future bull market will bring it back.
Bitcoin and Ethereum had new highs at the start of 2023, and the most notorious cryptocurrencies are showing signs of getting back on track. And now that mainstream financial institutions are warming up towards digital currencies, their prices could reach new values.
However, cryptocurrencies are more than digital assets; they have become an obsession for many holders. For crypto enthusiasts, internet-based tokens have become more of a religion than an innovative way to complete transactions. The culture around the sector is part of its appeal, and when someone buys cryptocurrencies, they’re actually entering a new world and making it part of their identity. While some coins like Ether and Bitcoin are getting more attention from trustworthy organisations, they’re still subversive concepts, so traders and investors view themselves as radicals taking part in the counterculture. The blockchain that enables them to buy Bitcoin p2p is considered innovative technology, accentuating the crypto users’ impression of being part of an exclusive club.
Digital currencies’ volatility is exciting for investors who have grown up with social media and video games and who’re constantly looking for fast-paced cycles and instant gratification.
Why are cryptocurrencies a great investment?
Digital coins have revolutionised how people think about money management and provided investors with new financial opportunities that traditional assets can’t keep up with. They have flourished in the last period in general adoption and value. Every time Bitcoin, the first created cryptocurrency, grows in value, all altcoins follow its lead. Experts state that digital currencies are a better investment if it’d be to compare cryptocurrency value with the stock value in the last decade. Those who invested as little as $1000 in Bitcoin ten years ago have profits of millions of dollars. The rapid growth of the sector hasn’t stayed unnoticed for too long. Seasoned investors identified the potential of blockchain technology and noticed the increased ROI possibilities.
Here are the main reasons specialists think cryptocurrencies are a good investment in the long run.
Investing in digital currencies is easy
For a long time, investing has been an abstract concept for most people because they thought that investing in real estate, stocks, or other forms of assets was reserved only for those with large capital and wide knowledge in the sector.
Nowadays, in a few clicks, they add their preferred digital asset to their wallet using their smartphone or computer. The mass emergence of fintech start-ups and innovative technology offers smart solutions to all users looking for investment opportunities. Instead of spending their savings on shoes, clothes, or jewellery, people choose to buy digital coins from the comfort of their couches. In addition, everyone can find relevant sources and literature online to learn about how cryptocurrencies and blockchain technology work.
Cryptocurrency is a good tool for preserving value in the long run
There are multiple strategies to invest in cryptocurrencies, but the most popular one is the long-term storage of digital assets. Some investors don’t want to get involved in daily trading because the market is too volatile. Crypto investing requires a longer timeframe to drive a profit. Digital coins are an effective way to preserve value in case of a financial crisis or inflation.
The blockchain and cryptocurrency industries are at an early stage
Some people are reluctant to invest in digital currencies because they think it’s too late, as they cannot afford to purchase top coins like Bitcoin and Ethereum due to increased prices. From 2017 to 2021, the sector took off, and all blockchain-based projects developed rapidly, increasing in value. The investors who added digital assets to their portfolios in the early years of the market made a good profit within this period.
New investors think they missed the ideal timeframe to invest in digital currencies as the sector went through a complete transformation. But let’s not forget that cryptocurrency is still a young industry and daily new projects appear, so there are plenty of opportunities to enter the market.
Digital currencies have a higher ROI than stocks
People invest in digital coins to boost their income as everyone is trying to find a way to make money. Cryptocurrencies have a high ROI attracting both new and seasoned investors. Reliable crypto projects can go up by 20-40% over a day, driving a return higher than most investors would have ever dreamed of.
The big fluctuations in price are the result of the market’s high volatility.
Why do experts think Bitcoin could be a better long-term investment than gold?
Most investors are turning towards crypto to make a profit and buy Bitcoin because it’s the oldest and biggest digital coin by market cap. Since its introduction on the market, crypto experts have often referred to it as digital gold, and some have even named it a better investment than real gold.
Seasoned investors add gold and Bitcoin to their portfolios because they both have a history of holding value in times of economic uncertainty. Those with experience in the sector know that gold has offered the best wealth protection over the years, but it sometimes fails to maintain value. Bitcoin, on the other hand, needs around three to four years for its price to surpass a previous all-time high as the crypto market goes through periodic bear and bull phases.
Gold is usually considered a good hedge against inflation because its price increases together with the cost of living. But a comparison between gold and Bitcoin shows that gold has registered a modest growth of 21% in two years, while Bitcoin increased in value by 300% in the same period.
Gold is described as a crisis commodity because it holds its value in periods of geopolitical uncertainty. Unfortunately, people located in areas subject to instability or conflict zones find carrying valuable gold objects risky. Bitcoin is more secure because it’s stored online, and it’s easy to travel with it.
Are you ready to add cryptocurrencies to your portfolio?
When you invest money in a new asset, rely on research and well-established strategies instead of your intuition. The above guide provides information about how digital currencies could turn into good investments in the long run.
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