Cryptocurrencies have many skeptics. Sure, they’re volatile, but there are so many doomsayers prophesying the fall of BTC, and it’s yet to happen. If anything, BTC is currently at its highest price, with its all-time high being just a few days ago.
So, this supposed fall is nowhere to be seen. There are also many reasons to believe that cryptocurrencies are currently a much better investment than people give them credit for. Here are the top seven reasons why this might be the case.
1. Low buy-in cost and high potential returns
When it comes to major investments, like real estate or S&P 500 stocks, you have to invest a significant amount in order to make a difference in your financial status.
You can’t buy a rental home for a few hundred dollars, and even when you amassed enough money to buy one, you’re looking at a rental return that’s 1-2% of the total value of the home (if you’re lucky).
With cryptocurrencies, the buy-in is incredibly low. While your risks are high and chances that this cryptocurrency will explode aren’t that great, this really isn’t a problem if you know how to manage risks and diversify your crypto investments. In other words, you’re looking for high-risk, high-reward crypto.
This way, you could make a huge difference even if you don’t have significant capital.
If you find this to be hard to believe, we would just have to remind you that, at one point, it was possible for you to buy Bitcoin for $1 or $10. Sure, you don’t know that this particular crypto will explode but you at least know that it has the potential to do so.
2. Global accessibility
There are many areas in the world that are unbanked or underbanked. People in these areas are quickly starting to understand the value of crypto and how they can use it to receive funds, buy things online, and join the global financial world.
A lot of remote employees prefer to get paid in crypto for this exact reason. People from these unbanked and underbanked areas often expect lower salaries, which is what makes them so appealing to potential employers. Now, with the access to crypto payments, the biggest roadblock to this collaboration is completely invalidated.
It’s also worth mentioning that this is one of the biggest reasons why cryptocurrencies are so big when it comes to remittances. All one needs to receive funds is to own a smartphone, which is really not an issue in 2024. Also, in a lot of these areas that depend on remittances, it’s better to receive funds anonymously since the level of criminality tends to be a bit higher.
3. High utility
In 2024, you can do so much with cryptocurrencies. You can pay for your subscriptions, order products on e-commerce, and even try your luck on anonymous casinos online. Cryptocurrencies are no longer just transactional, and the fact that you can use them for so many things makes a world of difference.
In the previous section, we’ve mentioned the fact that some areas are unbanked and underbanked, and if some of your employees are from these areas, you can pay them via cryptocurrencies. If you have an employer from a different part of the world, you can insist on getting paid in crypto.
Then, there are the utility coins. These gatekeep certain services and functions. In other words, if you want to use a platform, you have to use their currency. Since there’s a need for this currency, it’s expected that the demand will increase with the use of these platforms. In other words, you have something you can measure to evaluate the potential of these cryptos.
4. Hedge against inflation
Most cryptocurrencies are capped, which means that the main cause of inflation (creating more out of thin air) is out of the question.
Now, this logic isn’t exactly perfect for several reasons. First of all, while there are no new coins, you can now buy and sell a fraction of a cryptocurrency. In other words, while you cannot make new coins, you can split existing ones indefinitely. As the value of individual cryptos increases (like with BTC, which is currently roughly $67K), splitting coins more and more will make sense.
Still, it’s expected that development teams behind some of these coins will regulate this phenomenon.
5. Diversification
You don’t have to turn into a full crypto investor. Instead, you could just spend a part of your investment fund as a means of diversifying your portfolio. Cryptos have a low correlation with conventional investment assets, which actually makes them a great way to diversify.
Larger, transactional cryptos (like BTC and ETH) are relatively safe, but smaller cryptocurrencies are quite volatile. This makes them high-risk, high-reward investments but at a very low buy-in, which means that the overall exposure to risk while buying them doesn’t really have to be that expensive.
6. Institutional interest
This one is the most controversial by far, seeing as how the lack of government oversight brought the most attention to the subject matter. This was the case with individual investors, but it also kept the large capital at bay. With more regulations, there’ll be more investment.
Cryptocurrencies are an asset that’s too big and significant to be ignored by regulators. In the past, adoption was still low, and cryptocurrencies could fly under the radar. This is no longer the case.
Regulators are paying more attention and know a lot more about the subject matter. There are specialists out there who can provide advice and help guide people through the intricacies of cryptocurrencies. Sure, there have always been specialists, but there are far more of them than before.
Also, remember that crypto is slowly becoming more mature as an asset, which is crucial when trying to pass regulation. Inspecting the behavior of assets historically (under different historical circumstances) matters more than you think.
7. It’s an election year
It’s also worth mentioning that we’re currently in an election year, and the candidates have just been switched. So, everyone’s trying to figure out how the elections are going to affect the values of these cryptocurrencies.
On the one hand, Trump is very vocally pro-crypto. Harris, on the other hand, had some negative statements about crypto in the past, but all of that was before she became a presidential candidate. Her official stance is yet to be made known.
There’s also a random element to it, seeing as how the opinions of crypto aren’t exactly divided along the party lines.
Just keep in mind that cryptos are not something on which single-issue voters will choose their candidate. They’re a minor issue after things like inflation, immigration, and abortion. This doesn’t mean that the elections won’t affect their value. An increase in volatility can be a good thing if you’re trying to maximize profit and make the right prediction.
Cryptos are still a solid investment
Cryptocurrencies are one of the most underestimated assets out there. Sure, they are volatile, but there’s no asset that’s proven its worth over and over again, and I was still faced with that amount of skepticism. Nonetheless, if you approach these matters objectively, you’ll realize that cryptos are still a solid investment in 2024.
