The economy of the world is inescapably moving towards a digital eco-system, from money transfers to investment everything is now becoming digital and paperless. Cryptocurrency is one new and promising addition to this division of digital payments. It is a medium of exchange like other currencies such as the Euro and Dollars, but it has been created with the intention of exchanging digital information. This is the reason why this currency is known as digital or virtual currency. But, what makes it attractive is that it is highly difficult to forge and because it is not issued by any central authority, the government has no right to take it away.
The past few months have been rough for the cryptocurrency market since the prices dropped drastically in the fall of 2017. Ever since, investors, on-lookers, HODL-ers, and everyone else has been concerned about what the future holds for cryptocurrencies. But, you don’t have to worry as this currency is going nowhere, in fact, it is predicted that cryptocurrency is going to be the future, and will turn out to be a great long term investment.
Here are 7 arguments to prove why cryptocurrency is the future:
- It has Non-Correlated Returns
One considerable and big dominance the cryptocurrency has over other traditional assets is that it has non-non-correlated returns, as compared to other asset classes. When you observe other digital currencies like Ether and Bitcoin, you will see that they have comparably low correlation rates, almost 0%, as compared to other asset classes like long term bonds, short term bonds, crude oil, etc. This proves to be a beneficial feature for traders or investors who deal in traditional asset classes.
- It is Perfect for Portfolios
The low interaction of cryptocurrencies and other asset classes is what makes crypto perfect for portfolios. No matter whether it is a retail investor, trader, or an asset manager, with crypto on your portfolio you are bound to stand out. The reason for this is because the low equivalence between cryptocurrencies and other asset classes does not allow the bearish markets to have too much of a greater impact on an overall portfolio. Because cryptocurrencies are capable of pulling more weight in the market, the most common and successful portfolios can benefit from them.
- It has High Volatility
Those with no experience or knowledge about the currency market might see high volatility as something negative. But, people who have experience in trading and investment, and are in this business for many years, understand how high volatility can bring great turns if capitalised at the right time. This gives traders and investors, who have knowledge and know-how, a chance to trade in a declining and dormant market and make ample returns from it. So, it won’t be wrong to advise you to invest in some of the best crypto wallets, as it will turn out to be profitable for you in the future.
- It has Incredible Innovation Potential
Because high volatility brings great returns and profits, it also opens doors for incredible innovations that occur as an effort to take benefit from this volatility rate. Cryptocurrency trading tools or platforms, using machine learning and artificial intelligence, that offer users huge and extensive returns if they trade in cryptocurrencies, are likely to be great successful tools or platforms.
One such upcoming project known as RoninAi is a SaaS tool, which commits to jumping on the volatility in the crypto market, and promises large profits to its users, by examining more than 100 factors contributing to the prices of cryptocurrency.
- It is more Mainstream
One of the many reasons why it is believed that cryptocurrency will be the future is because it is mainstream and has increased governance. It is expected that moderately the market’s analytical activity will decrease, and it will go back to its peculiar value. This will provide investors a chance to consider cryptocurrencies as a buy and hold investment. This will eventually lead to more money being flowed through mainstream investors, as cryptocurrency will become a long term asset of investment.
- It Offers Independence from National Currencies
The world we live in today is caught up between international sanctions, and a great number of citizens of different countries are facing a large drop in their economy. This has made people desperate for a currency that has no ties with the government or their sanctions. Recently, because of the United States, overnight imposition of additional sanctions, Turkey’s currency Lira fell by 20%. But, while this was happening a great rise was seen in Turkish cryptocurrency exchange, as people believed that converting Lira into cryptocurrency would prevent their money from dropping.
This ease of conversion to crypto, anonymity, and the power to move funds overseas is what makes cryptocurrencies a safe and alluring option for many citizens of different countries of the world. Today, many countries suffer from currency depreciation, which has increased in a great amount in the last 5 years. This will eventually make people rely more on cryptocurrency, as the economies of different countries suffer in the future, more people will move towards the crypto market.
- Other Investment Opportunities continue to Lose Appeal
The global economy currently is not offering many attractive investment opportunities to retail investors. Majority of developed countries have adverse inflation-adjusted returns on bonds, whereas developing countries have higher returns on government bonds. But, these developing countries lack the adequacy of advanced capital markets that offer investment opportunities. This leaves the investors with a question of how to generate money and resources?
One answer, to the question above, that comes to our minds right now is Cryptocurrency. Why we say this is because it has easy accessibility and for all the reasons mentioned above. The cryptocurrency market might have gone down the hill for a while, but all these arguments and reasons prove that it is only going to rise in the future.