5 Reasons to Invest in Crypto in 2021

 

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Investing in cryptocurrencies has always been a debatable subject ever since it was introduced to the world in the year 2009. Since then, cryptocurrencies are growing rapidly making some of them a household name. 

 

Some still believe that due to the high risks involved, it can be a bad investment choice. With the right tactics and understanding the marketing trends, you can make a fortune.

 

5 Reasons to invest in crypto in 2021 

Cryptocurrencies aren’t only limited to a few options. There are over 6,000 options for you to invest in as of 2021. 

 

While not all cryptocurrencies pay back equally well, you can always choose to invest in the most popular ones. From high liquidity to low transaction fees, here are five reasons why you should invest in them.

 

1. Protects your savings from inflation 

This is one of the most potent arguments any pro-crypto individual would give. Unlike the traditional currency that is prone to inflation and losing its value during a time of crisis, cryptocurrencies remain unaffected. Since they are decentralized and cannot be manipulated by government policies to increase their profit margins, they protect your savings from being chipped off.

 

The conventional wisdom around cryptocurrencies like Bitcoin is that their price will rise during the unfortunate times of the economy. Just like gold and other limited resources, cryptocurrencies are scarce in nature. This element of scarcity adds security and acts as a hedge from inflation.

 

There are only 21 million bitcoins of which 19 million have already been mined. 6.25 Bitcoin is added to the network every ten minutes after processing a block. 

 

Every four years (starting 2024), the reward for mining bitcoins will reduce to half until all of the coins are mined. This mining protocol for Bitcoin is known as halving.

 

This deliberate tapering ensures there isn’t an overflow of Bitcoin in the market reducing its chances of being affected by inflation. Even if at some point, it is affected by inflation, its effect will also reduce due to halving. Also, since the purchasing power of Bitcoin keeps climbing the ladder as compared to the fiat currencies, inflation isn’t much of a concern for the potential investors.

 

Not to mention, they do not fall under any regulations and remain unscathed during any financial crisis or hyperinflations. This gives cryptocurrencies a great opportunity to be accepted as a form of payment.

 

2. Offers high liquidity and profits 

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If you’ve been following the crypto market closely, you will know that the value of cryptocurrencies has been increasing rapidly over the past few years. The most in-demand Bitcoin and Ethereum have been doing significantly well in terms of returns.

 

Buying and selling crypto is no longer limited to tech enthusiasts, ambitious investors, or big businesses. The market has become highly accessible to even laymen. With some information of technical know-how and money, you can also jump onto the crypto bandwagon.

 

The incidence of Covid-19 also contributed to the increased liquidity of cryptocurrencies. With people quarantined in their homes, the investment rates in cryptocurrencies started to increase steadily. Nowadays, even youngsters are showing an increased interest in crypto trading.

 

It is very simple to invest in cryptocurrencies. Just buy a few coins and monitor the prices of your investment. At any point in time, you can easily sell off your cryptocurrency at a profitable rate.

 

If you’re interested in buying ETH, you must choose from one of the trusted platforms like MoonPay.

 

You can buy ETH following these five simple tips: 

 

  1. Register yourself using complete details - name, complete postal address, and e-mail address
  2. Verify your identity with the help of a passport or driving license. It involves a two-step verification to avoid data breaches and increase security.
  3. Complete your purchase using a debit or credit card. It is recommended you purchase from one of the designated payment providers like MoonPay.
    1. If you buy ETH, MoonPay can accept the following payment modes - credit card, debit card, bank transfers, Apple Pay, Samsung Pay, and Google Pay
    2. The purchase is complete as soon as the transaction is done

 

3. Enables secure and better transaction rates 

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Physical banks thrive on the transaction fees and taxes they impose on various digital payments. Not only are such banks more prone to theft and losses, but also are highly affected by inflation and a crashing economy. The banking sector was affected negatively due to the pandemic in 2020

 

On the other hand, transactions involving cryptocurrencies and blockchain happen online and hence charge lesser transaction fees.

 

The transactions are highly secure, verified and are almost impossible to hack into. Cryptography is used to secure transactions. Every block is guarded by a unique and private key that can be verified only using a public key. If the transaction data is subjected to any manipulation, the block unique key becomes invalid and is discarded from the chain.

 

Payments using digital currencies are monitored and recorded in a public ledger giving it the transparency it needs. Sheer transparency and zero risk of corruption appeal to many investors and businesses and encourage them to deal with cryptocurrencies.

 

Many companies that are investing in cryptocurrencies are also accepting them as a form of payment. Wall street also recognizes crypto as an efficient form of payment and has stepped into the world of crypto. A renowned name, Tesla, is also known to invest $1.5 billion in Bitcoin verifying its credibility.

 

Due to the involvement of such big names, cryptocurrencies are gaining fame and more such companies have started to actively play a role in the growth of virtual currencies. Some organizations also encourage crypto mining. However, if you’re relatively new to the subject, we do not encourage mining.

 

4. Reduces the dependency on fiat currencies 

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Since they are decentralized in nature, the advent of cryptocurrencies has had a major impact on traditional financial systems. Faster payment processing times and relatively lower transaction costs have given the investors control over their finances.

 

The increasing popularity and reduced dependency on traditional currencies are encouraging small-scale companies and stakeholders also to invest in them. Businesses that choose to invest in crypto can gain merits like easy trading and smooth financial transactions. They can easily disburse and receive crypto to ensure safer transactions from stakeholders.

 

Many companies across a plethora of industries are accepting cryptocurrencies as a form of payment for their products and services. 

 

Tech giant, Microsoft, is also accepting Bitcoin payments for many of its services like Xbox Live and Skype. Using the Bakkt app, Starbucks also accepts converted Bitcoin as a payment for their goods and drinks. By hopping on this crypto trend, big companies are sending out messages indirectly to invest in digital currencies.

 

Prior to the pandemic, not many companies (except their IT departments) were thorough with the concept of digitization. The pandemic forced the shift and almost all the employees were in front of screens. By accepting digital currencies, companies are investing in their employees and educating them about their usage.

 

5. Gives flexibility and high returns 

The possibility of making a big profit is one of the common reasons why most people turn to invest in cryptocurrencies. Cryptocurrencies are newer to the market as compared to other investment trades like stocks. 

 

However, the returns that you obtain from dealing in crypto are much higher than stock trading. While stocks can pay you well in the long-term, for shorter periods investing in stocks isn’t a great idea.

 

Understand the difference between the two before you make an investment decision.

 

Being volatile in nature, the profits earned through a single trade can be very high. Whichever cryptocurrency you settle for, Bitcoin or ETH, your money completely belongs to you. The crypto markets, as stated above, are largely decentralized and many companies are working towards increasing peer-to-peer connections.

 

You can easily buy, sell or exchange your cryptocurrencies for traditional money and vice versa. You need not depend on banks that charge you just to hold and keep your asset securely. 

 

Since crypto transactions are unaffected by any of the global regulations, it gives you complete control and authority over them with no external influence.

 

The Crypto market is operational at all times, unlike stock markets. This gives you the liberty to make your purchase anytime you make your mind. 

 

Choosing the right exchange can help you eliminate excessive charges in the form of commission and transaction fees.

 

Diversification is an important factor to keep in mind when investing in cryptocurrencies. With a wide range of options available, the chances of earning a better profit are even higher. Instead of investing in one type of cryptocurrency, finalizing the top five and investing in them is a much better idea as it reduces the risks involved. 

Final thoughts 

Investing in crypto is a promising venture. Not only does it help to diversify your portfolio but also a relatively newer way to increase your wealth. With ongoing advancements in the stream of crypto, it is not going to be outdated anytime soon.

 

It is never too late to step into the world of cryptocurrencies. Whether you fancy owning a few of them or are looking for serious investments, cryptocurrencies can be a great choice.

 

Happy investing!

 

Coin Shark is not responsible for any content, accuracy, quality, advertising, products or other content posted on the site. The review is for informational purposes only, reflects only the opinion of the author and is not a proposal for action. The financial market is dangerous and full of risks, investments in cryptocurrencies can lead to losses. Users should do their own research before taking any action.

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