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Why Should Anyone Invest In Crypto?

October 10, 2022
12
min. read

Why invest in cryptocurrency? Buying low and selling high is smart, profitable and exciting. Smart - because it takes brains to do it more than once. Profitable - because it brings money. Exciting - because it gives a sense of superiority. Being smart does not always guarantee money and power, but often enough it allows to secure a peaceful old age.

Why trade cryptocurrency? There are many assets in the world whose price fluctuations make it possible to earn. Some assets grow faster than others. For instance, it took gold 25 years, and Ether - just 3 years to grow 20-fold. That is why the cryptocurrency market is so attractive today - you can buy low and sell high.

Gold Futures / COMEX
Gold Futures / COMEX
ETH/USDT / Binance
ETH/USDT / Binance

However, there are two sides in any market - a buyer and a seller, and everyone wants to be smarter than the other, so regardless of the traded asset, you will have to try hard to meet your own expectations.

Reasons to invest in crypto

Why buy cryptocurrency? Any market is generally set up for growth, otherwise why would it even exist, but not everything is this simple. Everything that grows fast also falls easily, so the cryptocurrency market provides both a great opportunity to earn quickly, but also an excellent chance to lose everything quickly. Prolonged downfalls are the perfect time to buy, but it is important for you not to have lost your money and the desire to spend it.

It’s easy to get started

It is much easier to buy cryptocurrency than stocks, bonds, futures or gold. If you already have some experience investing in classic assets, the cryptocurrency market will seem like a child’s game to you, where the most difficult part of registering on a centralized cryptocurrency exchange is the need to take pictures with your mouth open.

You can take an even simpler path and buy Bitcoins using your bank card straight in your cryptocurrency wallet. After you buy Bitcoins, you can basically stop and wait. There is only one fundamental idea in the cryptocurrency market: one day Bitcoin will be worth $1 million, or maybe more. All other investment ideas are essentially its consequences.

However, not everyone is ready to just wait for an unknown period of time. To pass the time, many people start trading, since there are lots of other cryptocurrencies and tokens on the market besides Bitcoin.

Diversification

Why do people invest in cryptocurrency? If you already have a portfolio of classic market assets, such as stocks and bonds, then you already know how to limit risks and can afford to diversify. Holding 10% of your portfolio in cryptocurrencies is a great idea. Losing 10% of the portfolio for the sake of a 100%, or maybe a 1000% profit is a perfectly reasonable decision. You will never achieve such a risk-profit ratio in stocks or precious metals, so why not?

When diversifying, it’s crucial not to miss the right moment to stop. If you get carried away with cryptocurrencies, one day you may find that they already took over 50% of your portfolio. It’s not necessarily a bad thing, but are you ready to risk this 50% percent? Everyone chooses the level of risk they can live with and sleep soundly.

Transaction freedom

You are free in the cryptocurrency market like nowhere else. Perhaps this will change in the future, when it’s more regulated, but today it’s pure joy. There is a huge number of exchanges (centralized and decentralized), a lot of cryptocurrencies, tokens, financial services that allow you to earn passive income, lending protocols, metaverses, NFT marketplaces, analytics, etc.

All transactions are recorded in a specific blockchain, you pay commissions, but there are no intermediaries. You don’t need lawyers or notaries, you don’t fill out electronic forms or sign documents. Everything is quick, precise and transparent - the main thing is not to make any technical mistakes, because this freedom has a downside - transactions cannot be canceled, and there is no one to complain to if something goes wrong.

More and more places are accepting cryptocurrencies

Adoption of cryptocurrencies is not a quick process, but it’s obviously on an upward trend. El Salvador has legalized Bitcoins, some countries have cryptomats on the streets, in others it is already possible to pay with cryptocurrency. Cryptocurrency payment is fast and convenient: scan the QR code and click Send. Supporters of the traditional financial system are suspicious of what is happening, so the attacks on the crypto industry may never stop, but time cannot be turned back.

It's all about blockchain technology. Blockchain is greater than cryptocurrencies, this technology has given the world an accounting system that eliminates intermediaries, and this thesis alone can change the world beyond recognition. In this case, cryptocurrency is a digital conductor of technology, the tip of the iceberg by which we judge the phenomenon as a whole. It is impossible to cancel the blockchain, so cryptocurrencies will pervade our lives more and more in one form or another.

Cryptocurrency is reliable

Why should you invest in cryptocurrency? There is no reliable investment - sooner or later the asset falls. Another question concerns the term of investment? Warren Buffett says that the best investment is a purchase for life, and he is certainly right. Buying Bitcoin for life is not a bad idea, it's just that not everyone has such exceptional patience or confidence in their chosen strategy. Indices, gold, stocks are falling, and Bitcoin itself has repeatedly demonstrated that it’s capable of falling. However, nothing in the world is invented to fall. Sooner or later, all good things in the world grow in price, you just need to be able to wait and take advantage of the moment when everything falls.

The rise of Bitcoin to a million dollars is not a stupid or overly optimistic concept, but a well-founded strategy. In February 2011, 1 Bitcoin was worth $1, and the idea that it would cost $1,000 seemed an abstraction, but it happened in November 2013, and by November 2021 it was already worth $10,000. 10 years is certainly a significant period, but so what? Time passes anyway, with or without Bitcoin.

Censorship-resistant store of value

Despite the serious pressure on the crypto industry from the SEC, Bitcoin is a priori “off the table” and is considered a “special” asset due to the way it is set up. It is not in danger of being recognized as a security like most other crypto assets, which means that Bitcoin will remain Bitcoin. 

Many people ask why Bitcoin is so expensive? After all, it's just program code.

Why is money worth anything? After all, it’s just paper. Alright, we’ve gotten used to paper, but what is it now, in the era of electronic payments? The essence of money is that you can always buy something with it. Money exists within a system where it is endowed with the highest trust. Gold exists in a system of trust where it is not just a piece of yellow metal. Gold is more expensive than bread, but it is absolutely useless for an ordinary person.

What is the purpose of buying Bitcoin? Bitcoin is based on blockchain technology, thanks to which it is possible to build trust systems of much higher quality: without intermediaries, but with absolute transparency of all actions. Trust is the most valuable thing in the modern world. The Bitcoin blockchain today is probably the most effective system of trust that has never been compromised, which is why Bitcoin is so valuable and expensive.

Benefits of cryptocurrency

Why do people invest in cryptocurrency? Despite the relative youth of the crypto industry, cryptocurrencies have already attracted the attention of not only private, but also institutional investors. Many major players believe in the future of crypto assets and are willing to invest in them. The advantages of cryptocurrencies compared to traditional financial instruments are obvious, although they also have enough opponents. What makes cryptocurrencies so attractive? Why do people use cryptocurrency?

Transaction speed

Cryptocurrencies can be easily and quickly transferred to anyone, regardless of your location. It’s enough to have a cryptocurrency wallet. A separate question is how to cash out cryptocurrency if you need ordinary (fiat) money? It depends on the country. In traditional financial circles, not everyone is happy that such a convenient tool as cryptocurrencies has emerged in the world, and they are in no hurry to create the appropriate infrastructure (cryptomats, payment in cryptocurrencies, legislative incentives).

However, the simplicity and speed of cryptocurrency transactions is already in place. Sometimes it takes less than a minute for the recipient on the other side of the globe to receive your payment or transfer. It's fascinating!

Transaction costs

Bank transfers always take time and money to pay the commission, which can be very high. Cryptocurrency transfer is typically almost free. Yes, there are moments of excitement when commissions in Bitcoin or Ether networks increase significantly, but the crypto industry provides a huge number of opportunities to make any transfer practically free.

Today there are a dozen blockchains where you can choose a suitable cryptocurrency and send it with a minimum commission. You can opt for stablecoins - coins pegged to the exchange rate of the dollar or other fiat currency, if you want to reduce exchange rate risks.

Accessibility

Cryptocurrencies are available to everyone. You don't need documents to start using cryptocurrencies. Perhaps you’ll need them when registering on a centralized cryptocurrency exchange, but you can do without it. It is enough for you to have a crypto wallet application in your smartphone. By connecting to various decentralized services, you can turn one crypto asset into another, transfer them between different blockchains using bridges, take loans, lend, earn interest, etc. In the world of decentralized finance, you are your own boss, and everything is at your fingertips.

The abundance of opportunities can make you dizzy, but it's worth keeping your cool. Get ready for the fact that cryptocurrencies are here to stay, and don’t make any hasty decisions.

Security

In the world of cryptocurrencies, the most important thing is security. Your wallet is primarily a secret phrase that should be known only to you. If you lose it, access to the funds in your wallet will also be lost. If someone finds out what it is, he can enter your wallet address and withdraw all funds. There is no one to complain to in the crypto world - the loss of a secret phrase means the loss of funds, and no fund will compensate you for the loss.

Pay great attention to security, as the crypto industry is a fertile ground for scammers. Phishing sites, mailing lists with viruses, clone tokens, fake support, etc. are lurking at every step. Under no circumstances should you share information about your wallet!

Privacy

Any blockchain provides the highest level of privacy. You will always remain an anonymous user if you don't tell everyone you meet about yourself. Your wallet in the blockchain is just a string of characters that does not contain any information about you. The wallet address only shows the amount of funds in it, and the transaction history.

Transparency

Blockchain is an absolutely transparent system where everyone can view transactions and the amount of funds in any wallet. But the point is - no one can know who these wallets belong to unless you tell them yourself, or if the special services take an interest in you. The combination of full transparency and privacy is one of the impressive properties of the blockchain, where, like in the virtual world, people interact with wallets without seeing each other.

Diversification

If you invest in different assets and know how to manage risks, you should allocate a small part of the funds in your portfolio to cryptocurrencies. Diversification is very important in investments, it allows not only to lose less, but also to earn more, because each asset has its own potential, and the potential of cryptocurrencies is unusually high.

Inflation protection

Many cryptocurrencies have a deflationary model, which means that their emission is limited. For example, Bitcoin can be issued in the amount of 21 million. The issue of Bitcoin is halved approximately once every four years and will be completed in a hundred years, so we still have time to invest in it. The limited issue is a fundamental advantage of many cryptocurrencies, since the value of any limited resource always grows in the long term.

Conclusion

The crypto industry is young and is developing rapidly. Today is the best time to think about what will happen in 10 years with Bitcoin and other cryptocurrencies. Time goes by regardless of whether we invest or not, so why not spend it with Bitcoin in your wallet? Everyone has to answer the question of Why should I buy Bitcoin? and time will answer the rest.

Why should anyone invest in crypto? FAQ:

What are the advantages of cryptocurrency?

Cryptocurrency transfers are fast and almost free. They have no restrictions and do not require intermediaries. Owning cryptocurrencies, e.g., Bitcoin, you can make good money, because in the long run Bitcoin is getting more expensive, and with it - the rest of the crypto assets. The protracted phases of Bitcoin's decline do not negate the possibility of it soaring to $1 million in the next decade.

Why are cryptocurrencies so important?

Cryptocurrencies are based on blockchain technology, which is an effective system of trust without intermediaries. Cryptocurrencies are only a specific manifestation of blockchain technology. With the advent of cryptocurrencies, a whole alternative industry to the traditional finances has emerged in the world. The world, in turn, is opposing its full transparency, the absence of intermediaries and high speed of transactions that does not depend on state borders. The crypto industry can change the world and make it more stable.

Why crypto is good for the future

Blockchain technology is the technology of the future, in which intermediaries will have increasingly less influence on the interaction between people. The transition to Web3, where people interact directly without passing personal information to monopolists like Facebook or Google, is a real process that began with the emergence of the blockchain. Cryptocurrencies are the fuel of this process and will help make the Internet more decentralized, which means less manipulative.

What is the future of cryptocurrency?

Today, cryptocurrencies are under unprecedented pressure from the SEC, which aims to defend the traditional financial order. Of course, in the future cryptocurrencies will be subject to strong regulation and for the most part deanonymized. Nevertheless, blockchain technology will penetrate all industries, and cryptocurrencies will retain their properties, serving as the necessary fuel within emerging ecosystems.

Is crypto currency safe?

Cryptocurrencies, unlike tokens, have their own blockchains and are much more secure than it might seem. A much greater danger for holders of cryptocurrencies is their own lack of attention to the security and protection of personal information, which may result in the loss of access to their wallets. Sensible online behavior is a sufficient guarantee of the security of your cryptocurrencies.

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