Since the creation of bitcoin all those years ago, the cryptocurrency market has sparked a new wave of interest worldwide. As interest grows, new investors and traders are flooding the market. However, many are baffled by the vast number of cryptocurrency options. But why should you invest your hard-earned money in this market compared to the stock market or Forex? What makes it so enticing to millions of investors worldwide? Read on to find out.
Crypto Vs. Stocks
While the cryptocurrency market is notorious for volatility, that should not be confused with ‘risk.’ Cryptocurrency is very much like trading stocks: risk and rewards are proportional to the amount of capital you spend. Over the long haul, the rewards of investing in cryptocurrency will far exceed the risk of losing money. The best way to understand why cryptocurrency trading is a wise investment is to compare it with trading stocks. Most people who think about trading in cryptocurrency will be after a more significant, short-term reward than what they might get from the stock market. While these results can be considered short-term compared to stocks, many investors will hold for years until they believe the time’s right to cash in. Nevertheless, savvy investors can make seriously life-changing money. Aside from the monetary reward, there are other reasons that you should invest in crypto.
It Is Decentralized
The benefits of decentralized currency are many, from the freedom to transact to the low fees and payment privacy. However, the most talked-about advantage of using decentralized crypto is that you can store your digital wealth in a more secure way than storing data on a centrally controlled server. Many people like the idea that they can completely own the way they buy and sell things, and if you invest in the major players like Bitcoin, you will own a method independent of the control of governments. In addition, the decentralized currency will likely be the currency in the future or run alongside the more conventional ones.
You Can Win Big
Although the decentralized point is worth mentioning, it is still true that most people want to invest to make money. While crypto trading isn’t some magic money tree, it can yield tremendous returns if you are competent in trading. The best part of crypto is that it’s never too late. You can always hold steady and wait for the next big thing to come around. Nobody would have imagined that a coin like Dogecoin would explode as rapidly as it did this year. Still, due to the intervention of Elon Musk, a lot of people made a serious amount of money (while others punched the wall for not investing more!).
You Can Diversify Your Portfolio
In portfolios composed mainly of stocks, cryptocurrencies such as Bitcoin can offer good diversification. Prices for cryptocurrencies and the stock market of the U.S. are virtually non-correlated. Thus, the crypto market is not affected by stock exchange movements, and the reverse is also true. Therefore, when there is instability in the world, and stock prices plummet, you might find your crypto investments static or even rising.
Crypto blasted its way into the world and is here to stay. There are various reasons to invest, but perhaps the main three are that it is decentralized, it has the potential to provide you with large runs, and it can diversify other investments you might hold.
Interesting Related Article: “Cryptocurrency – definition and meaning“
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