10 Reasons Why You Should Invest in Cryptocurrencies Especially on a Long-term Basis
Whether you’re exposed only to traditional investment assets apart from cryptocurrencies, or you have some interest in investing in cryptocurrencies for the first time, you can be able to take some very important steps if you actually understand why it is important to invest in cryptocurrencies or crypto.
You’ve likely read or heard about Bitcoin and other cryptocurrencies like Dogecoin, Litecoin, NEO, Ethereum, XRP, Alias (formerly known as “Spectrecoin”), NXT, Bitcoin Cash, etc.—but why invest in crypto anyway?
By getting a general overview of important reasons, it will be easier to understand why you should invest in cryptocurrencies, especially on a long-term basis. The following are ten reasons why you should invest in cryptocurrencies:
1. Investing in cryptocurrencies can diversify your investment portfolio
By investing in cryptocurrencies, you can diversify your investment portfolio much more and reduce any risk(s) associated with investing all your money in only traditional markets; you can actually reduce the impact of losses that could be incurred from investments made in traditional markets or investments.
It’s important to diversify your portfolio by investing in crypto because doing so can prevent you from investing all your money (putting all your eggs) in traditional markets/investments (one basket), and also prevent you from increasing the impact of any losses if traditional markets/investments fail.
Generally, it’s important to diversify in many areas of life; for instance, if you’re travelling, don’t put all your money only in your luggage; take part of it and put it in your trouser’s pocket, and maybe also put another part in your shirt’s pocket so that you can still have money if your luggage gets lost or pockets loosen up—and vice-versa.
When it comes to money-making, you can diversify your investments in different financial assets such as bonds, stocks, foreign exchange (forex), precious metals (gold, silver, etc.), etc.—depending on the industry (healthcare, technology, entertainment, etc.) of your interest.
Investing in cryptocurrencies—especially on a long-term basis—is essentially one way of balancing your portfolio of investments and increasing your potential in order to maximize your portfolio’s growth by utilizing the higher earning potential in cryptocurrencies which react differently to various financial and global events.
2. Investing in cryptocurrencies can attract tremendous ROI when respective cryptocurrency platforms are strong
Although crypto investing lacks symmetry (the ability to remain unchanged under a specific direction and value), if you can make the right timing, it can earn you tremendous ROIs (returns on investment) as it has done for many investors who invested in various types of cryptocurrencies that have yielded high ROIs on a long-term basis.
For example, as of April 15, 2021, Ethereum was selling around $2,425 per token which represented a 782,258% ROI (return on investment) after initially selling for $0.31 during its initial coin offering (Augur) back in October 2015.
As of April 15, 2021, Alias (formerly known as “Spectrecoin”) was selling around $0.17 per token which represented a 17,000% ROI after initially selling for $0.001 during its initial coin offering in late 2016.
As of April 15, 2021, NEO was trading around $71 per token which represented a 236,667% ROI after initially selling for $0.03 in late 2016; before then, it had previously traded at an all-time high of approximately $180 which represented a 600,000% ROI.
NXT was initially selling for $0.0000168 per token, but as of April 2021, it was trading for around $0.09 which represented a 535,714% ROI years after the day of its initial coin offering.
No traditional investment (stocks, bonds, precious metals, forex, etc.) or other types of investment in the world have attracted tremendous ROIs that are more than what most cryptocurrencies have attracted. There are still many other cryptocurrencies whose ROIs are also high; lack of adequate time wouldn’t permit us to mention them in this article.
Anyone who had bought one bitcoin for $300 at the end of 2015 and held unto it and sold it on March 15, 2021, when its price reached approximately $60,415 per token would have made a profit of $60,115; two bitcoins would have earned a profit of $120,230, and more than two bitcoins would have earned much higher profits than $120,230.
It’s important to note that “selling cryptos at the wrong time could incur losses”; therefore, when investing in cryptos, take a long-term approach. Looking for profits on a long-term basis would make you appreciate investing in cryptocurrency much more than traditional investments.
High returns on investment (ROIs) are the reasons why many investors—and “non-investors” too—are jumping on the cryptocurrency bandwagon. People who owned bitcoins when Bitcoin initially came out had to wait for years before seeing any appreciable ROI.
Personally, I was initially skeptical about Bitcoin back in July 2016 when I had around 0.8952 bitcoin which, at the time, was equivalent to between $700 and $800, and equivalent to around 360,000 Naira (my local currency). In July 2016, I was assuming that Bitcoin would crash in the future, so I sold my 0.8952 bitcoin for 360,000 Naira and unfortunately wasted my money.
When I look back from today, which is in the future and five years ahead of 2016, I regret being so skeptical and selling my bitcoin because, as at the time of writing, 0.8952 bitcoin was equivalent to approximately $39,000 which was around 15 million Naira.
If I had that amount of money at the time of writing, my life would have been on a much higher level than it was. It’s really interesting to see how the values of Bitcoin and other cryptocurrencies just keep on rising.
3. Cryptocurrencies generally have long-term stability and high potentials for consistent growth
The prices of Bitcoin and other cryptocurrencies are generally volatile because of several factors; however, the stats provided in preceding paragraphs prove that the prices or values of cryptocurrencies are stable in the long term and have high potentials for consistent growth.
The biggest investment stories of 2017 were about Bitcoin and other cryptocurrencies: Wall Street Journal, New York, and CNBC reported that many people become millionaires within a short period of time, usually almost overnight.
However, when the price of Bitcoin fell by 63% after January 2018, the same media had stated that the opportunity of making millions and lots of money from Bitcoin and other cryptocurrencies had passed, and the cryptocurrency era would soon be over.
But far from it: the same media would certainly be surprised when, at the time of writing, Bitcoin was around $40,000 after it had reached approximately $60,000 just a few weeks prior—specifically, on March 15, 2021.
4. One or more cryptocurrencies can be traded for one or other types of cryptocurrencies
Cryptocurrencies can be traded against each other in the same way that fiat or traditional currencies are being traded against each other in the forex market where investors carry out short-to-medium-term trading activities between different pairs of fiat currencies.
For example, in the cryptocurrency market, you can analyze and pair Ethereum (ETH) and Bitcoin (BTC) against each other, or even pair a cryptocurrency (Bitcoin) against a fiat currency (euro) and invest after speculating their value against each other.
However, you would have to analyze each cryptocurrency or fiat currency individually, evaluate or weigh their value against each other and predict—either rightly or wrongly—which cryptocurrency or fiat currency would win.
Although it’s risky and likely better to invest in cryptocurrencies in order to get a sizable ROI, it’s possible to trade different cryptocurrencies against each other in the same manner that fiat currencies are being traded against each other in the forex market.
5. Cryptocurrencies are usually unregulated by governments and one or few individuals
Because they are unregulated and gain more trust when people—especially investors—don’t trust fiat currencies at certain times or during certain time intervals, cryptocurrencies have the tendency to increase in their values and consistently maintain high values without being under the influence of central power.
6. Cryptocurrencies are portable, and less risk is involved in transferring or moving them around
In comparison with precious metals and fiat currencies which are usually associated with a considerable or high degree of portability risk, and are expensive to transfer because of their weights and the high import taxes and security they incur, cryptocurrencies are more portable and have lesser portability risks because they don’t need to be transferred physically; also, moving or transferring cryptocurrencies is much faster and less expensive, even if you’re using a hardware wallet.
7. Cryptocurrency platforms are more transparent because of their blockchain technology
Cryptocurrency platforms use blockchain-based technology which has a transparent and well-grounded decentralized network and eradicates the need for a centralized middleman, thereby providing much-needed transparency, allowing direct peer-to-peer transactions, and eliminating the type of high transaction fees required by centralized platforms.
Cryptocurrency blockchain-based technology is more transparent because of its decentralized nature which makes it possible for individuals or peers to control and coordinate common activities, interact with each other, and govern themselves in a more open and trustworthy manner.
8. Cryptocurrencies don’t have the tendency to be influenced by/subjected to inflation
History books have proven over and over again that when any government is corrupt and governing by employing unsound policies or facing a crisis, its country’s fiat currency suffers. Fluctuations in a currency’s value can make the central bank in charge of the currency unnecessarily print more money, and thereby subject the economy to inflation.
Unlike traditional currencies (pound, euro, dollar, etc.), most cryptocurrencies won’t be printed by any central banks or decentralized cryptocurrency platforms. Most cryptocurrencies have a limited supply of tokens (or a controlled supply) which implies that they won’t be printed and subjected to inflation.
9. Cryptocurrency platforms provide fast and highly accessible financial services
With the help of blockchain technology, cryptocurrency platforms can provide banked, unbanked, and underbanked groups of people with faster and highly accessible financial alternatives and services in a transparent and efficient way.
Any interested individual needs only a laptop or smartphone and internet connection to open an account on any cryptocurrency platform and start sending and receiving cryptocurrency.
One of the notable problems that cryptocurrencies have solved to a great extent and can keep on solving much more is the issue of inadequate access to financial services which most of the world’s population—both the unbanked and underbanked populations—have been experiencing.
It’s widely known that about 1.7 billion adults don’t have bank accounts and are unable to meet their daily financial needs because of lack of access to adequate financial services.
Generally, many people are unbanked and underbanked and don’t have access to the convenience, interests, and security that banks provide. Cryptocurrencies have the potential to resolve this issue.
10. The world is trending more and more towards investing in cryptocurrency platforms
Many of the world’s largest companies have started recognizing and accepting cryptocurrencies for payment. Tesla once invested billions of dollars in Bitcoin, and presently you can find many large companies that have cryptocurrencies or digital coins.
This is one of the reasons why you should consider following the trend of investing in cryptocurrencies. You can monitor financial projections, find out when new digital coins—like Pi coin—would be launched, and choose an appropriate time to buy cryptocurrencies and save them on a long-term basis.
Cryptocurrencies are gradually being accepted as part and parcel of modern society and are increasingly being used for making payments and in economic processes. Cryptocurrencies will likely be relevant for many more decades or centuries to come, even if mankind doesn’t invent another type of money that can be created out of almost nothing.
Join the bandwagon of people who have seized the opportunities that cryptocurrencies have brought during their existence so far.
Despite the reasons why you should invest in cryptocurrencies, always remember that cryptocurrency markets or platforms can have their bad days, and sometimes even bad years like traditional investments (stocks, bonds, etc.) do.
But most importantly, never ever forget that you will almost always reap great ROIs (returns on investment) if you invest in cryptocurrencies on a long-term basis. In addition, investing in cryptocurrencies can help you balance out risks associated with other types of investments, especially traditional investments.