Cryptocurrencies are virtual currencies that were founded on the principles of making cross-border transactions more efficient in terms of cost, speed and privacy.
Bitcoin, one of the first cryptocurrencies, that was created as a digital payment system is now exclusively used for trading and has made many investors billionaire and millionaire. So, if you also want to become rich through investing, you should certainly invest in cryptocurrencies.
And thankfully, bitcoin isn’t the only cryptocurrency you can invest in and earn good profits. There are altcoins such as Libra Coin, ETH, XRP, and LTC that are popular among investors for their ability to give good returns in both trading and investment activities.
However, if you are a first-time buyer, it’s important to learn a few basics of crypto trading and acquire a brief knowledge of how it works in order to avoid making mistakes and increase your chances of making good returns on your investment.
Here’s why investing in cryptocurrencies will be beneficial for you
Better interest than the market
One of the biggest benefits of investing in cryptocurrencies is its ability to produce huge returns. Because cryptocurrencies are volatile in nature, their price changes very frequently. And since they are not regulated by usual market rules, they can give unlimited returns in a very short span. On average, you can expect to get 10-20% returns by intra-trading cryptocurrencies, depending on the coins you choose to trade.
Long-term value appreciation
If you’re a long-term trader who prefers to stay invested for the long-term rather than buying and selling every day, you can benefit nicely from cryptocurrencies. For instance, the value of bitcoin has increased more than 100% in just one year between Jan 2020 and Dec 2020. No other investment tool can give this much returns in this short span.
Another benefit of investing in cryptocurrencies is that you also get access to the project/platform linked to that cryptocurrencies. And if the cryptocurrency you’re investing in is a utility token, you also get the ability to use the token to buy product/service from the linked platform.
For instance, in the case of Libra Coin, you can use it to access the services of the Libra Ecosystem.
Cryptocurrencies remain true to their basic nature, which is to make payments. Almost all the popular coins, including Bitcoin and the Libra coin, can be used for making global, cross-border payments. Crypto payments are faster, cheaper and more secure than traditional payments.
Libra Coin, for example, can be used by e-commerce platforms for accepting payments from their global customers at a low cost and in a fast and secure manner. Crypto transactions are peer-to-peer and free from middlemen.
As the user interest in traditional currencies, including cash, is depreciating, the demand for more convenient payment options like digital currencies is increasing. In 2020 alone, digital transactions worth US$4,934,741m were performed and the same is increasing at the rate of 13% per year.
In the coming future, both the demand and value of cryptocurrencies are expected to increase significantly, as people realise their importance in a decentralized economy.