Why cryptocurrencies are a sound investment for the future

You’ve probably heard a lot about cryptocurrencies, especially bitcoin, which is far and away the most popular and widely-traded cryptocurrency format. These virtual, digital currencies are becoming increasingly popular with investors as they offer the promise of long-term gains alongside security and transparency.

 

 

Why cryptocurrencies are a sound investment for the future

Of course, as with any investment, the value of any cryptocurrency can go down as well as up. Nevertheless, cryptos are now routinely traded alongside more traditional assets like fiat currencies, stocks, shares, bonds and precious metals.

 

Several advantages

For those looking to start investing, cryptocurrencies have several advantages over traditional assets. Their value is not tied to the performance of any one national economy, as is the case with fiat currencies like the pound, dollar and euro. They are also not tied to the performance of a company or corporation, or to the value of another property, like gold. In most cases, the value of a cryptocurrency is dictated purely by the demand for that cryptocurrency and the amount available, as cryptos like bitcoin are only “mined” in a limited number. This means there is a purity and simplicity to the cryptocurrency market that you don’t see anywhere else.

 

Blockchain technology is the driving engine behind cryptocurrency. That means that every transaction is recorded on a digital ledger stored on a large number of different computers. It is simultaneously updated and cannot be altered after the event, so there’s a clear, transparent record of the movement and value of assets. The decentralised nature of the record-keeping means the risk of corruption or fraud is incredibly low and further contributes to the clear, simple nature of cryptocurrency trading.

 

A long-term investment

Bitcoin has attracted a lot of attention due to its dramatic fluctuations in price over the past few years. Commentators have suggested on several occasions that the “Bitcoin bubble” may be about to burst. In fact, if that bubble ever existed it has already burst and bitcoin is now traded on a sound financial basis that is far less affected by casual speculation. Furthermore, if we look at the big picture it is undeniable that Bitcoin has massively increased in value over the long term.     

The lesson to be learnt from these past fluctuations is not to panic sell if the value of your cryptocurrency investment drops. Over the long term it is likely to not just bounce back but to continue rising in value. Anyone who bought into bitcoin several years ago and hung onto it through the crashes in value will have made a significant profit, many times the value of their initial investment.

While short-term profits can be made with cryptocurrency, its real value is as a long-term investment to be measured in years or even decades, rather than months. This makes it an ideal way to save for the future, either as an addition to your pension plan or as something that can be passed down to your children or grandchildren.

 

Getting started

It’s easier than ever before to get started in the world of cryptocurrency investing. There is a wealth of reliable information to be found online, as well as legitimate platforms and digital wallets for storing your currency. One of the simplest and least time-consuming methods is automated trading. Go to top10CryptoBots.com for a rundown of some of the best automated cryptocurrency trading platforms, including independent reviews and ratings.

 

Choice of currencies

A wide range of different cryptocurrencies is available today besides the widely-traded bitcoin. Its closest rival is probably Ethereum, but Litecoin, Ripple and many more are also popular. With bitcoin, its value has already increased so much than investing requires a substantial initial outlay. These smaller cryptos arguably offer a lower-cost alternative for the new investor.

While you may not be getting in on the ground floor, investing in a younger cryptocurrency often leaves greater potential for high returns. Do a bit of research into the history and different properties of the various cryptocurrencies to see which is right for you.

 

 

Regulation

Cryptocurrency is now beginning to be regulated in a similar way to “regular” currencies. That will remove a lot of the risk for investors and will stabilise market prices, meaning they are less likely to plunge dramatically one day and soar to new heights the next. Instead we should see steady growth underpinned by solid, long-term demand from a wide range of investors, including individuals and reputable financial institutions.

While in the past cryptocurrencies have been subject to wild speculation from the “get rich quick” crowd, they are now a reputable long-term investment for ordinary people wanting to put something aside for their future. The history of cryptocurrencies like bitcoin shows that they are an ideal investment for families hoping to pass value down to the next generation. Investing in cryptocurrencies as part of a balanced, varied portfolio gives you a reliable stake in the future.