Have you recently considered investing in cryptocurrency? If so, you will be joining a large number of crypto investors worldwide.
Digital currencies like Ethereum and Bitcoin have experienced massive growth in recent times. Those who invested in these assets almost a decade ago have earned high returns. In 2012, a single Bitcoin was worth $5.27, while, nowadays, it’s worth over $40,000.
Crypto investment benefits range from huge growth opportunities and portfolio diversification to short processing time and decentralization.
Get familiar with the advantages of such investments in detail.
Huge growth opportunities
One of the major benefits of cryptocurrency investments is the huge growth potential of this market. While the majority of stocks provide investors with a moderate return on investment, these returns cannot even be compared to the size of crypto returns. Since new digital currencies appear continuously, many of them experience massive value jumps.
As far as more stable options are concerned, such as Ethereum and Bitcoin, the growth still takes place at amazing rates, thus providing beginners with a possibility to make lucrative profits. Prior to any investment, individuals are strongly advised to vet the digital currency. Although the potential for profit is huge, new cryptos are likelier to result in loss.
Round-the-clock market hours
Another fantastic benefit of investing in cryptocurrencies is the round-the-clock availability of the crypto market. Those interested in trading digital currencies can do it 24/7, owing to the absence of centralized market governance. Make sure you click here to see a newbie guide for cryptocurrency investments for 2022. Sometimes, there might be downtime periods when the market is undergoing adjustments due to updates in its infrastructure, known as forks.
Short-term and long-term investments
Another reason for investors to consider cryptocurrency investments is the ability for short-term and long-term investing. Both methods come with their own advantages and drawbacks. For instance, price fluctuations won’t have the same effect on your investments over a long-term period. Anyhow, your profit growth won’t be the same either.
Short-term investments, on the other hand, are capable of providing investors with incredibly high ROI at a much higher risk. The ultimate decision is only yours. The most important thing is that you are offered two investment options.
Another important reason for investors to consider investing in cryptocurrencies is decentralization. This market has experienced ups and downs since its creation. Anyhow, it isn’t tied down to any political organization or financial institution. The entire power is in the hands of users, meaning they don’t need to worry about recessions or fiscal policies.
Crypto investors, however, should also grasp the challenges caused by such decentralization. It makes the procedure of tracking your funds down much trickier. It’s paramount to know the exact destination of your funds before sending them off. Visit this site https://www.investopedia.com/terms/d/decentralizedmarket.asp# to learn how decentralized markets work.
Short processing time
Individuals stand to gain from investing in cryptocurrencies owing to their short processing time. Crypto transactions are completed in a matter of minutes, not days. Moat transactions at financial institutions get settled in three to five days, while wire transfers take a minimum of 24 hours to complete. Conversely, stock trades require three days to settle.
In the case of cryptocurrencies, funds are available to use once individuals receive a network confirmation of the block. As a result, investors can enjoy the fast processing time, which isn’t the case with other transactions.
In terms of transaction fees, cryptocurrency transactions are lower in cost compared to wire transfers. For example, domestic wire transfers usually cost between $25 and $30. International wire transfers are even costlier. Although the blockchain demand may increase transaction costs, the expenses are still lower than wire transfers.
Another important benefit of investing in cryptos is the high level of security investors are provided with. Other individuals cannot gain access to your funds or sign transactions unless they discover the private key for your crypto wallet. Anyhow, if you happen to lose this private key, you won’t be able to recover your funds.
The procedure for securing transactions depends on the blockchain system and the distributed computer network in charge of verifying transactions. The more computing power the network receives, the more secure the process becomes. Keeping your cryptocurrencies in your own wallet is the most secure option.
Cryptocurrencies provide investors with diversification from traditional assets like stocks and bonds. The prices of digital currencies seem to have no correlation with the rest of the markets. Therefore, if your stocks go down, crypto assets will go up. Investors should never disregard the volatility of cryptos and make their portfolios too reliable on these assets.
It’s never too late to become a cryptocurrency investor.
New cryptos keep on appearing and taking over the market!