Digital assets are becoming an increasingly popular option for those seeking high returns and innovative opportunities. This has become especially noticeable in the last few years (starting from 2018-2019), when the global economy is regularly experiencing storms, and traditional investment instruments do not bring the expected financial results. Some investors go to the extreme, considering crypto assets a panacea for any economic situation. Today, tokenized equity is very popular, find out what it is so you don’t miss out on the benefits.
Pros of investing in cryptocurrencies
Among the advantages of using digital assets as investment instruments are:- High profitability. Prices of coins and tokens can fluctuate significantly in short periods of time, providing significant profits to investors who do not miss the moment to enter the market. For example, from October 2020 to March 2021, Bitcoin showed an increase of more than 500%, and from June to November 2021 - by almost 100%. At the same time, in the final quarter of 2021, an absolute price record was set - the No. 1 cryptocurrency in the world was trading for some time at a price above 60 thousand dollars. Thus, investors who invested in cryptocurrencies early on saw triple-digit returns in a relatively short period of time. In addition, cryptocurrencies offer the opportunity to earn additional income from mining, staking, landing, and pharming. As a result, the owner has the opportunity to receive not only speculative, but also interest income.
- Innovative opportunities. Cryptocurrencies represent new instruments that can provide investors with access to innovative technologies and business models. For example, blockchain technology, on which all digital assets are based, can be used in various industries such as finance, logistics and healthcare. Moreover, almost every successful crypto project solves problems that had no solution or real implementation before. Accordingly, investing in cryptocurrencies can provide investors with the opportunity to participate in the creation of innovative companies and technologies, which can potentially generate unlimited returns.
- Decentralized nature of assets. One of the main advantages of cryptocurrencies is their decentralized nature, which means they are not controlled by central institutions such as banks and governments. Instead, coins and tokens are supported by decentralized networks that are governed by participants using blockchain technology. Thanks to this, cryptocurrencies are not susceptible to many crisis phenomena that can negatively affect traditional types of investments.
- Safety. Cryptocurrencies provide anonymity and privacy, making them attractive to those who want to keep their financial transactions private. At the same time, the very nature of the blockchain (a continuous chain of blocks that is not subject to correction, a distributed network with complete duplication of information on nodes) guarantees, subject to simple rules, the impossibility of attackers interfering in any already carried out operations.
- High liquidity. Cryptocurrencies can be quickly and easily exchanged for other digital assets or fiat money. This means that the owner can quickly sell his investment, receiving the currently optimal price for it. It is worth noting that this applies to top coins and tokens, such as Bitcoin and Ethereum, but this set is quite enough for investors.
- Variety of investment opportunities. There are many cryptocurrencies, and each of them has its own unique characteristics and profitability potential. This means that investors have a wide choice of investment options, among which it is not difficult to find ones that correspond to their investment goals, the amount of investment capital and the risk profile.
- Ease of investing. Investing in cryptocurrencies is available to everyone who has access to the Internet. You can invest your money in digital assets on numerous centralized and decentralized exchanges, in hundreds of proven exchangers, and even in many traditional payment systems (for example, PayPal and card payment systems allow you to exchange fiat for crypto). At the same time, the exchange/purchase procedure and interface are so simple that they do not require special knowledge or training to master.
- Ease of use and versatility. Investing in cryptocurrencies can be a convenient and fast way to transfer funds between countries and continents, as transactions are border-neutral and do not require intermediaries such as brokers and dealers, banks and payment processors. For example, in 2022, Bitcoin was used to transfer $1 billion from China to the US, which was faster and cheaper than traditional transfer methods.