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7 reasons why people invest in crypto

OWhy do people invest in cryptocurrency?

GOBankingRates recently surveyed 1,037 Americans to find out if they invest in cryptocurrency and what are some of their top goals for investing in digital currency. Some of their main goals included the ability to diversify portfolios, build up savings, make a fortune quickly, and earn money for specific goals like education or travel.

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Here are some goals, as well as a few more, that you can achieve when investing in cryptocurrency.

Diversify portfolios

If you are looking for a way to diversify your portfolio beyond the typical basket of stocks and bonds, investing in cryptocurrency can provide you with this unique opportunity.

Find: 6 alternative investments to consider for diversification in 2022

Chris Kline, COO and co-founder of Bitcoin IRA, said there is renewed interest in investing in cryptocurrency to diversify portfolios, especially retirement portfolios. This is likely due to expectations for the increase and growth of digital assets in the short and long term, and its generally enthusiastic customer base.

“At least some cryptocurrency exposure is quickly becoming a prerequisite for a modern wallet,” Kline said. “During the current economic uncertainty, cryptocurrency can provide diversification and an alternative path for people of all ages.”

7 reasons why people invest in crypto

Equity potential

Patricia Trompeter, CEO of Sphere 3D, said that one of the main reasons people invest in cryptocurrency is because it has equity potential. This means that there is a possibility of a high return on investment.

7 reasons why people invest in crypto

Long-term store of value

Jenny Ta, CEO of HODL Assets, said that most cryptocurrencies, unlike fiat currency, have a limited supply capped by mathematical algorithms.

“Like stocks, they are speculative investments, so there is a lot of volatility and risk involved,” Ta said. “But the returns can potentially be much higher and the turnaround time much faster. It’s all about high growth in a short period of time.”

Ta uses the example of the Dogecoin frenzy of 2021. Cryptocurrency investors who only bought $1,000 in Dogecoin in January or February had at least $14,600 by mid-May of that year.

“You can’t do that with stocks,” Ta said. “Long-term growth cannot be beaten by any other asset class.”

7 reasons why people invest in crypto

Freedom to trade

Investing in crypto provides investors with a great deal of transaction freedom, which most traditional banks cannot offer. If you need cash, Trompeter said crypto and its related exchanges are both easy to access and easy to clear.

“And the cryptocurrency is censorship-resistant,” Ta added, “meaning anyone can send money between peers, 24/7, without any third-party interference.”

7 reasons why people invest in crypto

Cryptocurrency is reliable

The reliability of crypto is another reason why people choose to invest in digital currencies. Because bitcoin’s supply is limited, Trompeter said, it is a stable, long-term form of currency that cannot be subject to inflationary dilution by political or government agencies.

“One of the main reasons people invest in cryptocurrency is partly because of the allure of earnings,” Kline added, “and partly because of the finitude of crypto as a potential hedge against inflation”.

7 reasons why people invest in crypto

It’s a social experiment

If you’ve noticed all your friends and family starting to invest in crypto, you might feel compelled to join them to avoid FOMO and be part of the viral effect.

Tahem Verma, co-founder and CEO of Mesha, said owning crypto is a social experience. Investors are part of a community and engage with others around the world.

“When the richest person in the world touts a coin on social media and talks about it on “Saturday Night Live” or people hear about friends who made 50x, 100x or more by getting involved early in an altcoin hot, it draws others into the market,” said Ryan Hansen, head of sales at Mercury Digital Assets. “Like investing in stocks, everyone wants to buy low and sell high and have a story about how they got into the next big thing early.”

7 reasons why people invest in crypto

You own what you buy

“Many tokens give you governance and ownership of the product,” Verma said. “It means that you are not only a user of the product, but also an owner.”

Today, people have alternative asset options that deviate from traditional assets. Kline said cryptocurrency has the potential to be like the internet: foreign and unrelated at first, but inevitably pervasive and imperative.

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This article originally appeared on 7 Reasons People Are Investing in Crypto

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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