The word “cryptocurrency” is being thrown around on every news station. It’s blowing up, and the value of many major cryptocurrencies have skyrocketed in recent months, but you might be finding yourself still skeptical of how popular it seems to have become seemingly overnight.
While there are always reasons to be hesitant regarding the surge in value of any asset, the benefits that come with investing earlier are sometimes worth pushing through the trepidation you may have.
Are you thinking about breaking into the world of cryptocurrency, but have no clue where to start? Let us tell you all about cryptocurrency and how we can help you get started in investing in the future of the market.
What Is Cryptocurrency?
Cryptocurrency is a form of currency housed on the blockchain. The original cryptocurrency, Bitcoin, is the most well known in the world and is worth over $1 trillion in value at time of writing.
Unlike other currencies, there is a finite number of Bitcoins that can be “mined”, which means that there is less and less available and demand will skyrocket the closer to 0 the number of bitcoins remaining gets.
These digital coins are mined through the use of powerful computer hardware (both by private citizens and mining “farms”) to perform millions upon millions of calculations every second, attempting to discover the solution to complex “hashing” puzzles and complete “blocks” of transactions. Miners are rewarded for their efforts in the coin they mine.
Rather than simply being a way to see federal (fiat) currency in a different light, the value of cryptocurrencies like Bitcoin are completely independent of your country’s market. For example, if the Australian dollar falls in value, the value of Bitcoin is unaffected.
Why Are People Skeptical?
Bitcoin isn’t tied to anything else in the current financial market, meaning that not only is it attractive to add to a portfolio, but makes it terrifying for some people to make the jump.
Investing in stocks is something people have been doing for hundreds of years and has more clear and tangible benefits than cryptocurrencies, historically speaking. The market is designed around stocks, so doing anything to invest outside of these formats can feel unnatural for high earners.
Another reason people may be hesitant to invest in crypto is because it’s largely unregulated and isn’t something backed by the federal government. Because of this lack of regulation, if the Bitcoin bubble bursts, there is little protection for losses.
What’s The Hype?
Popular influential individuals worldwide have begun to take the dive into the world of cryptocurrency, making it easier for consumers to trust the market. Elon Musk’s bullish sentiment and Tesla’s recently invested $1.5 billion into the Bitcoin market has made waves in the media in recent weeks. Tesla now accepts Bitcoin as a way to purchase their electric vehicles.
Jack Dorsey, CEO of Twitter, and Jay-Z, popular music icon, announced they would be partnering up to invest in and establish a Bitcoin development fund with $23 million in Bitcoin backing the project.
This is to say that some of the world’s richest individuals are seeing serious potential in Bitcoin and have begun to put their money where their mouth is, so when the market eventually reaches its peak, they can get a serious return from their investment. To that end, Tesla has already netted $1 billion on their recent investment.
Wealthy and popular individuals investing in a chosen cryptocurrency doesn’t inherently mean you can trust it for long term gains. Crypto markets are no stranger to the same kinds of volatility that stocks are.
Where Can I Use Cryptocurrency?
Some retailers have even begun accepting cryptocurrency as a valid form of payment, from Tesla motors to even Mastercard and PayPal allowing users to buy and trade Bitcoin on the platform.
Mastercard, though, will convert the digital currency into traditional currency and transmit funds over this network. In doing so it’ll allow consumers who invest in Bitcoin use them wherever they could use a Mastercard as a form of payment.
What this means is that, essentially, Bitcoin can be accepted as a valid form of payment all around the world. For somebody who travels, being able to keep your currency in Bitcoin can make traveling between nations easy as you don’t have to deal with currency conversions.
And, of course, makes the process of online shopping easier since even your currency is housed in a virtual cloud.
Why Use Cryptocurrency?
Bitcoin is the best performing asset of the last decade, beating out Microsoft, Amazon and Apple. Even companies like JPMorgan, who initially opposed the idea of Bitcoin, began allowing cryptocurrency transactions on its platforms and even plans on creating its own cryptocurrency. Theirs, however, would be intrinsically tied to the value of the US Dollar.
Another reason to consider using cryptocurrency is because it gives you as the investor more control over your wealth. With a smartphone you can access cryptocurrency without waiting for a bank to open. There’s no need for a debit card or credit card.
There’s also increased transparency on where money is going, which many forms of government-controlled money simply don’t offer. This serves to differentiate the idea of the stock market and what actual wealth is.
Rather than wealth existing as a theoretical concept that only the mega-rich can understand, your money is somewhere you can actually see and can track how it’s grown in value and trade as you see fit.
Thinking About Cryptocurrency Trading?
Deciding to convert some of your money to cryptocurrency can be a daunting endeavor, but it isn’t impossible. Investing in cryptocurrency is a way to keep your money your own without governmental regulation.
As a digital currency merchant, Aus Merchant specialises in connecting a network of liquidity providers and high volume exchanges with a sophisticated wallet security system. Trade and access investment opportunities directly from your secure wallet.
Contact us today and speak with one of our brokers to customise a trading system just for you.