2.01 Why to invest in cryptocurrencies

We are in awe of the guy who bought Bitcoin in 2014 and never sold it. In fact, turn back the clock and we all want to be that guy. But it is not too late. With the crypto infrastructure development and rising blockchain potential virtual currencies are grabbing more and more attention - from advertisements to celebrity endorsements. In this lesson, we will explain the reason why it is a good time to invest in crypto. 

This lesson explains why cryptocurrencies might be a good asset to include in your investment portfolio.

Contents

• High returns
• Deflationary assets
• Simple to invest and trade 
• Independent and transparent
• Highly secure

Jaw-dropping high returns 

Historical data indicates that digital assets have given investors substantial returns depending on a variety of factors such as time, coins, duration, etc. For instance, Bitcoin gained 8.9 Million Percent over the last decade. Ethereum, the second-largest crypto by market cap, jumped about 500% in 2021 in less than a year. 

Digital assets hold a huge potential of making profits in the long term as well as for high returns in the short term. However, they are also highly volatile. You should research the market thoroughly and understand its mechanics before investing your hard-earned money in cryptocurrencies. 

Deflationary assets

Apart from investments, cryptocurrencies also serve as a way to store funds. For instance, let’s assume that you saved $1,000 and decided to spend it after ten years. The value of $1,000 will be less compared to its value ten years back. This is called inflation. Even storing money in your bank account guarantees extremely low-interest rates. 

Cryptocurrencies can act as a hedge against inflation. The upward trend of digital currencies is likely to continue in the long term depending upon a number of factors. Digital assets offer substantial returns when compared to other traditional methods. 

Simple to invest and trade 

It is easy to set up a crypto wallet and start investing in digital assets. Cryptocurrencies allow you to make fractional investments. This makes it simpler than conventional investments like stocks and bonds. You can get an account, create a wallet, and trade digital currencies using an electronic device and internet connection. 

Additionally, unlike stock or forex, the crypto market functions 24/7, round the clock. 

Independent and transparent

Fiat money is controlled and often manipulated by governments and banks. When it comes to cryptocurrencies, no single authority holds control over them. 

The miners or nodes are distributed in different parts of the world. They validate transactions and ensure that the network is run based on its consensus mechanism. All transactions are permanently recorded on the ledger and can be transparently accessed by any node of the network.  

Highly secure

When we say that any central authority does not control cryptocurrencies, you may doubt their security. But, digital assets are quite secure, even more than the conventional financial systems. 

Tens of thousands of nodes monitor the blockchain network. If one user finds an error or detects any tampering with data, other nodes will cross-reference to correct it. The more nodes join the blockchain network, the more secure it will become. However, centralized entities in the space like exchanges, wallets, and service providers are prone to hacks and frauds. Hence, it is important to choose a safe platform to invest in cryptocurrencies. For instance, zondacrypto, a fully regulated exchange holding the license issued by the Estonian Financial Intelligence Unit (FIU), ensures the safety of the deposits and trading via the platform by applying strict AML and KYC procedures. Moreover, all the crypto assets are held in cold wallets to protect zondacrypto customers’ funds.

In this course of our academy, we study the various factors that will help you in understanding the market, trading strategies, and practices to trade responsibly. Let’s begin.