While you’re researching investment options to diversify your portfolio, you hear the songs of Cryptocurrency day in and day out. This makes you wonder, though cryptocurrency has caught up, is it just one of those things that will be forgotten soon?
While the cryptocurrency value, the cryptocurrency market, and its trends say otherwise, there are several reasons why crypto is the hot topic in 2022 and might be for a few years.
The Cryptocurrency Market Cap Is > $100 Billion
The total value of all cryptocurrencies in circulation is more than $100 billion. The market cap for a company’s outstanding shares is calculated by multiplying the total number of shares by their price. This figure indicates what it would cost to buy up all of the company’s stock from public investors.
When you compare this to other assets like gold or oil, cryptocurrency has a far larger potential for growth, and its market cap will continue growing over time.
Cryptocurrencies Have Had a Volatile History
Cryptocurrencies have had a volatile history. Bitcoin, the first and most popular cryptocurrency, has experienced ups and downs in its value since it launched in 2009. It rose from pennies per coin to over $4,000 as of November 2018—and then again fell back down to around $2,500 at the time of this writing.
Monero (XMR) is another popular type of cryptocurrency created in 2014 that’s worth mentioning here. It currently has a market cap of $1 billion. However, at one point, XMR was worth over $400 million more than it is today.
Cryptocurrency Presents New Investment Opportunities
The crypto market is an exciting new frontier for investors. There are several ways you can invest in cryptocurrency, including:
● Cryptocurrency trading
● Cryptocurrency investment funds (exchanges)
In addition to these options, there are a handful of other less common but still effective opportunities for investing in the crypto space. For example, one can invest indirectly through a fund that holds shares in companies that make products used by blockchain technology companies like IBM or Intel. Another option would be to invest directly in companies that develop software or hardware specifically designed for use with blockchain technology.
Cryptocurrency prices are also highly volatile and thus present many opportunities for profitable trading activity if you know what you’re doing and have done some research on how cryptocurrencies work before diving into this area with your hard-earned money.
Cryptocurrencies Are Decentralized and Anonymous
Cryptocurrencies are a new, revolutionary form of money. They are decentralized, meaning that no country or government controls them. You can buy or sell cryptocurrencies using peer-to-peer transactions without the need for a middleman like PayPal or Amazon.
Cryptocurrencies also have lower transaction costs than traditional online payment methods and can be used to send money across borders quickly and cheaply. This makes them a better option for freelancers who work with clients all over the world.
Because cryptocurrencies aren’t tied to any central bank or government, they’re less susceptible to manipulation by political forces than conventional currencies are, which makes them appealing in countries where inflation is high (like Venezuela), and black markets thrive due to stringent economic sanctions (like Cuba).
Cryptocurrency Can Be Used Instead of Real Currency
You can use cryptocurrency to purchase goods and services from merchants all over the world.
The most popular way of doing so is with a service called a crypto exchange, where you can trade bitcoin for other cryptocurrencies or fiat currencies like USD. One example of such an exchange is Coinbase, which allows users to buy products directly from online retailers using bitcoin and other cryptocurrencies.
Another way of using cryptocurrency as payment is through something called atomic swaps: Users send funds from one blockchain wallet to another without having a middleman involved (e.g., an exchange).
Cryptocurrencies Are Also Used by Criminal Organizations for Money Laundering
Cryptocurrencies are an excellent way to launder money without being detected. The anonymity that they provide makes it difficult for authorities to track down the source of illicit funds.
There is little doubt that cryptocurrencies will continue to grow in popularity as they become more and more accessible. However, it may be too early to say whether or not they will become mainstream currencies or if their use will decline as a result of government intervention or other factors such as security vulnerabilities, lack of widespread adoption, and fluctuating prices.
The Future of Cryptocurrencies Will Depend on the Government Regulations
The future of cryptocurrencies will depend on the government’s willingness to regulate them. As these digital currencies become more popular, governments are trying to make cryptocurrency more transparent, traceable, stable, and secure. The main goal is also to ensure accountability within this emerging asset class.
In conclusion, cryptocurrency may not be a fad just yet, but it won’t be what it is today in the future.