Cryptocurrency is one of the newest investment types that any investor should be exploring in this day and age. A diverse portfolio can help mitigate the risk that comes with investing in general.
If you’re not investing enough in investment types, there’s more risk that could result in a loss of money. Of course, no investment is devoid of risk which is why a lot of research and knowledge is important to have.
*This is a collaborative post. Image Source
*This is a collaborative post. There are many benefits to investing in cryptocurrency and the new year is the best opportunity to take advantage of. With that being said, here are some of the advantages that make it worth exploring for 2023.
Inflation protection
Inflation is something that can influence investments but with cryptocurrencies, they aren’t influenced by economic changes on the market. With some currencies, there are only so many coins released, which means if the demand increases – the value will increase.
For example, there are only 21 million Bitcoins released within the planet, so therefore, it benefits from inflation protection as a result.
It’s a decentralised platform
A major benefit of cryptocurrencies are that it’s a mainly decentralised market. Unlike other investments, that involve third-parties, cryptocurrency doesn’t. There’s no banks or individuals that are influencing or swaying the market in their favour.
As a self-governed and self-managed investment, it definitely has it’s perks.
Great for diversifying your portfolio
As someone who wants to create their own investment portfolio in their 30s, I think diversifying your portfolio is important. For cryptocurrency, it’s an investment type that has a range of low-risk to high-risk opportunities. Not only that but it’s a long-term investment type. That means if you’ve got something short-term in the portfolio, then it’s worth exploring more long-term options too.
Accessible for all types of investors
There are lots of investment opportunities out there but when it comes to investing in those areas, it’s not financially viable for everyone. For example, if you’re looking to invest in property with a BTL mortgage, you’ll need 25% of the property’s value. Not only that but you’ll need to factor in money for stamp duty and solicitor’s fees.
With cryptocurrency, there’s no requirement to have tens of thousands available in the bank. Investors can invest as little as they want depending on the platform itself. You also don’t need to buy one coin – which is financially difficult in itself to do.
Cost-effective
With cryptocurrency, you can send money across borders. It isn’t influenced by other currencies and the transaction fees are very minimal to zero.
It also removes a lot of need for third parties like PayPal and Visa that need to verify transactions and charge additional fees.
Useful for spending on physical goods
Cryptocurrency is something that is definitely revolutionising how we spend money as a society. For so long, physical cash has been the main currency. However, since the internet has come about, the use of digital payments has become more prominent. It makes sense that cryptocurrency can now be spent on physical goods and services like traditional currency.
You can even get crypto loans, which can be used to keep hold of your crypto and to spend it on other assets. Some of the best crypto loans are going to be
Secure and private
We’re all a little more concerned about security and how much our privacy is protected by others. Cryptocurrency relies on mathematical puzzles which makes them hard to decode. As a result, it’s something that every investor should be looking out for 2023.
For me, cryptocurrencies are something I’d like to explore in the future once I know more about it. I dipped my toes in within the last year or so but not to the extent that I invested hundreds of pounds.
Have you thought about investing? What do you think about cryptocurrency? Let me know in the comments below.
*Disclaimer – This is a collaborative post with Block Lender. All words are my own.
