As of 2022, the global blockchain market value is $10 billion. There are over 20,000 cryptocurrencies in circulation and hundreds of thousands of daily transactions.
Some investors are still hesitant to put their money into crypto. It’s in its infancy and a volatile asset. While crypto is by no means a low-risk investment, there are certainly benefits to adding this modern investment vehicle to your portfolio.
Keep reading to find out more about investing in cryptocurrency so that you can make the right financial decisions.
High Risk, High Rewards
It’s no secret that investing in crypto is a high-risk investment due to its infancy compared to other investment options. Those who invested in cryptocurrency in the early days made a lot of money.
However, in recent times there have been massive losses alongside huge gains. This fluctuation has seen from 94% annual returns to a terrifying 39.5% loss.
So, what is the takeaway? If you have money to lose and are looking to add a high-risk investment to your portfolio, cryptocurrency is a great gamble. To reduce risk and see high rewards, you’ll need to be comfortable with the long game, letting your investment sit for years until the market stabilizes.
Censorship-Resistant
One benefit of investing in cryptocurrency is that there is a limited supply, defined by mathematical algorithms. This is important because governments and other political powers cannot dilute the value through inflation; it’s simply impossible. Governments also cannot confiscate tokens.
This means that your investment is safe even if financial disasters or hyperinflationary events occur. Interested in investing in cryptocurrency? Check out the blockchain KSM crypto price to get an idea of the current value and recent changes.
Investing in the Future
Are you a future-forward investor? Then crypto should be a key aspect of your portfolio management. Many believe that crypto will become a part of daily life and transactions in the future, replacing currencies across the world.
Even more progressive is blockchain technology, which could revolutionize many industries, from healthcare to banking. When you invest in crypto, you are investing in technology that may usher in a new era of economic activity.
Portfolio Diversification
There is no other investment asset quite like crypto, which makes it ideal for diversifying your investment portfolio. As a non-correlated asset, crypto functions almost completely independently from other markets.
If your portfolio is already full of stocks, EFTs, or bonds, adding crypto adds another level of diversification which could potentially result in huge returns.
Should You Add Crypto to Your Investment Portfolio?
Crypto is definitely not for everyone. It’s a long-term investment that requires surplus capital. Adding crypto to your investment portfolio could lead to massive returns and losses.
However, you’ll be investing in future technology and diversifying your portfolio with an independent asset.
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