In recent times, Bitcoin has become a go-to investment asset for many online traders. Moreover, several users are okay with the volatility of the crypto market. However, these people made Bitcoin look investment-worthy as they frequently expressed the benefits it has offered them and their trade.
Profit collection and break-even are critical parts of any investment. No one wants to invest and not make a profit. Unfortunately, in the case of cryptocurrency, the profit margins are high and usually seem unrealistic.
Fortunately, crypto profits are realistic, and many have testified to the opportunities they provide through blogs like CryptoManiaks. Therefore, there is a need to understand every concept relating to Bitcoin and how their investments work. However, the following sections of this article give further detail about what Bitcoin entails and why people invest enormously in them.
What is Cryptocurrency?
Cryptocurrency is an encrypted digital asset used recently as a form of payment for goods and services. This currency, known by many, has been a source of livelihood to a few who have grasped its potential.
The origin of cryptocurrency dates back to 2009 with the invention of Bitcoin, the mother of all cryptocurrencies. However, when developers rolled it out in the first instance, many people were skeptical about putting funds into it because they needed to see its investment potential.
Many thought it was just another Ponzi scheme created by scammers. However, fast-forward to 2022, over a decade later, Bitcoin and other cryptocurrencies have been used in different and many ways by over 20% of the world’s population.
As mentioned earlier, Bitcoin is an investment opportunity in which only a few have grasped its potential. Despite its popularity, some still need more education about Bitcoin investment. Thankfully, this is the right article for educating individuals who have yet to grasp cryptocurrency knowledge.
5 Reasons Why People Invest in Cryptocurrency?
Aside from making a profit, other beckoning reasons make people invest in this digital asset. Many of the other reasons are individual-relative; This means that every individual has a reason for venturing into cryptocurrency as an investment opportunity. We will now outline the reasons people venture into Bitcoin as an investment opportunity:
Value for Money
Cryptocurrency as a value for money is undoubtedly one of the first and foremost reasons people venture into cryptocurrency. There are over a thousand cryptocurrencies in the Bitcoin market. Purchasing and utilizing the right cryptocurrency will give you value for your money.
Buying a cryptocurrency token for less and selling it for a higher amount than purchased is the most considerable flex any investor in cryptocurrency can have. For this reason, it is of paramount importance that we do extensive research before buying any cryptocurrency token.
Security and Anonymity
Another best feature of cryptocurrency is security. This feature ensures no room for hackers to exploit the cryptocurrency network. Furthermore, this feature has been made possible with the Blockchain technology employed in creating these digital assets.
Security is the number one feature any financial and or digital asset must possess. In cryptocurrency, developers combine security with anonymity. Anonymity means unidentifiable. You can perform a transaction on the Cryptocurrency network without being identified as the person who committed it, talk about security; cryptocurrency possesses the best form of security you can find.
These days, owning physical assets/investments can incur taxes close to the value of the said asset. This option makes such an investment redundant. A shift to digital assets like cryptocurrencies and NFTs have made investments tax-free and more valuable. For this reason, people are confident to put funds in digital assets, knowing that they would pay little to no fees as tax.
Long-Term Investment Benefits
People who invest in Bitcoin invest in them for the long-term benefits they provide. However, because cryptocurrencies tend to be volatile, this leads to an increase or a decrease in the value of digital assets. Usually, the former is what every investor expects from the said digital asset(s).
The return on investment on so many cryptocurrencies is usually over a hundred percent. However, the duration can be minutes, days, months, or years. This delay is due to the volatile market of Bitcoin assets.
Ease of Access and Transactions
Cryptocurrencies are easy to store and access. They keep cryptocurrency assets online with third-party agents and platforms or offline on a hard drive or a storage device.
3 Major Factors to Consider When Choosing the Right Crypto Token
We will now discuss the three major factors affecting Bitcoin investment in the following paragraphs of this article:
Liquidity, by definition, is the property of an asset (In this case, Bitcoin) to maintain its value while being converted to cash quickly. Moreover, liquidity is a top factor you should consider when choosing a cryptocurrency asset you want to invest in while trading.
Converting your asset to cash should give you a good value for your investment. This is because liquidity works hand in hand with trading volume. When anyone reaches the desired value of the asset in the market, its liquidity and trading volume give the asset value.
The volatility of a Bitcoin helps you determine how easily the price of the Bitcoin asset can rise or fall. A cryptocurrency with high volatility is at the mercy of the market.
This situation can increase or decrease at any point in time. This unstable nature (volatility) of the cryptocurrency market is vital in determining whether one loses or gains from a crypto token.
People should consider a less volatile Bitcoin token when venturing into the Bitcoin market. This consideration secures your investment from sudden loss and changes in the asset price you invested in while trading.
How you store crypto assets matters significantly regarding availability and accessibility. Bitcoin can be available in online wallets provided by third-party vendors, and you can easily keep them offline in storage devices. However, before purchasing Bitcoin or other cryptocurrencies, you should decide the storage medium in which you’d want it to be.