Are you aware that 58% of Americans own some type of stock? If you’re thinking of upping your investment savvy, there’s never been a better time to do it. Making wise investments can increase your net worth and help build your retirement savings.
But knowing where and how to invest can be tricky. Fortunately, this guide has you covered if you’re considering whether crypto is the right addition to your investment strategy. Read on to learn about the eight benefits of crypto that will surprise you!
1. Get Good Returns
When it comes to crypto advantages, the potential for significant returns on your investment is one of the biggest. Because crypto prices can fluctuate quickly — and they can fluctuate a lot — you’ll need to be prepared.
You may encounter some significant losses at times. But when the prices climb, you can score big.
Yes, you will need to be aware of the potential for slippage in crypto. In this scenario, you’ll either exceed your expectations by scoring a better price on a sale or be dealt a loss if the price is lower. The volatile nature of crypto makes this a reality that every trader should be ready to experience.
But as with any assets, when one type goes down, another may go up. For instance, your equity holdings may start to decrease, but your crypto holdings could go up. Just be aware that because crypto can be more volatile, you may want to start with a conservative investment in it.
Timing is everything with crypto. Miners supply the cryptocurrency, but they don’t continually produce them. If the demand goes up for a coin when its supply is low, you stand to benefit the most as an investor.
2. Trade Any Time of Day
With the traditional financial markets, you’re limited in terms of when you can buy, trade, or sell assets. Usually, this means planning to enact financial decisions during standard work hours. And for those with traditional 9-5 jobs, doing so can be difficult if not impossible.
With cryptocurrency, you’re not limited by the hour on your clock. You can trade at any point in the day. This means it’s possible to score extra income on your timetable.
The appeal of being able to trade at any time of day gives crypto an edge over traditional markets. This may be particularly true for younger professionals looking to build their investments. In fact, crypto’s appeal has caused some traditional markets to investigate the option of expanding trading hours.
3. Gain a Secure Type of Payment
There’s always a risk that someone will steal your PIN or hack into your account with most traditional financial systems. One of the other big cryptocurrency benefits is that you can trust blockchain security to protect your finances.
The blockchain isn’t stored in one central system, meaning hackers can’t access everything from one hack. Every transaction is documented and even the savviest hacker can’t erase them.
Cryptocurrencies with higher hash rates offer the most security. This includes options like Bitcoin. The blockchain is stable in options with high hash rates, so hackers won’t be able to break through the network.
4. Save on Transactions
With traditional investments, you might be surprised by the fees associated with investing. Expense ratios for mutual fund investments, for instance, can reach up to 1.5% of your investment. And these costs can gouge into your bottom line.
Likewise, you can pay fees just to transfer money from one place to another with most other financial systems. By contrast, crypto investments come with very low fees and fast transactions.
Simply use your phone and an exchange wallet to send crypto just about anywhere. You may even be able to purchase some cryptocurrencies at select ATMs.
And you can settle your crypto transactions within minutes or even seconds, too. With a traditional money wire, you may need to wait several days for the transaction to go through.
5. Manage Finances Independently
When you do business with a traditional financial institution, you work through that institution to make a transaction. A bank, for instance, provides statements detailing the dollar amounts in your accounts with them. But when you deposit money with them, they are using your money to make loans to other businesses.
In other words, your money is not safely stored away. It is used to help the bank stay on top of its finances and make money.
As a result, you may be concerned that banks or other institutions might engage in financial mismanagement. If you want a more transparent and independent approach to finances, you may want to turn to crypto.
With crypto, the approach to financial management is much more independent and transparent. The technology used to govern the crypto exchange is decentralized. This means that a collective of people worldwide validates the transactions.
If you buy or sell a cryptocurrency, there will be a record of your transaction. And that record will become stored in a public digital sphere. In other words, all transactions can be traced and they cannot be modified.
Don’t worry, though — your name won’t be attached to a particular transaction. Your wallet address will be recorded as part of the transactional record. And ultimately, this helps create a greater sense of transparency.
6. Improve Your Retirement Holdings
Did you know that you might benefit from adding crypto to your retirement accounts? You can — and you could score bigger returns by adding it to your portfolio.
One of the surprising uses of crypto is as a component of a retirement portfolio. Despite their volatility, some currencies, like Bitcoin, have outperformed traditional retirement investments. When you know how to use crypto as part of a larger investment strategy, adding it is another great way to diversify your portfolio.
Not many major firms allow crypto as a retirement investment option at this point in time. After all, most retirement accounts are geared toward low-risk investment options. But as crypto gains prominence as an asset, that may change.
Better yet, you may be able to gain some tax advantages by working with cryptocurrency in your retirement account. You can steer clear of capital gains taxes by completing crypto trades using your retirement account.
7. Beat Inflation
When you’re trading using traditional dollars, you’re at the mercy of inflation. When inflation is high, that can devalue the worth of your money. While gold has long been a go-to asset for inflation-proof investing, it’s not the only option anymore.
Another one of the key crypto advantages is that it can be a hedge against inflation. That’s because your investments won’t be tied to national inflation trends.
Why is crypto a better bet? The answer is tied to its limited supply.
Production of cryptocurrencies is limited, either annually or overall. That means you won’t have to worry about the excessive production of coins that could deflate their value.
The Bitcoin supply, for instance, is not infinite. There is a cap on how many coins will be produced — ever. And the Bitcoin that is produced will follow a specific schedule, with fewer Bitcoin entering the market over time.
As a result, you can anticipate that the limited supply may increase demand. In addition, the price should go up and outpace inflation.
8. Improve International Trade
If you want to send money to Europe, you may have to wait several days and fill out lots of paperwork when you go the traditional route. Too many intermediaries slow down the process. And as a result, you may also be saddled with fees that hurt your budget.
With crypto, you gain access to a more streamlined process. You can transfer payments efficiently, with some transactions taking seconds.
On top of that, you’ll see low commission fees that may only be a few cents. With cross-border transactions growing, crypto provides a faster and cheaper solution.
Beyond crypto, the benefits of blockchain are numerous. This is particularly true for those engaged in trading international goods. Blockchain technology represents an opportunity for easier traceability.
The blockchain technology associated with crypto can allow companies to track products. This, in turn, helps them improve supply chain efficiency.
Digital timestamps enable companies shipping goods internationally to have a secure system in place. And they can improve the speed at which they move goods.
Learn the Benefits of Crypto
When you understand the benefits of crypto, you can make investments that build your income and financial trajectory. Make trades at any point in the day, and save money on transactions in the process. You can send crypto anywhere and trust that you’ll be working within a secure financial system.
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