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Crypto Investing: Is it right for you?

2020 was an incredible year for cryptocurrency. The pandemic wreaked havoc on stock markets and commodities the world over, but crypto enjoyed an unprecedented high because of it’s inflation-resistance. And even more amazingly, the demand for cryptocurrency hasn’t shown any signs of slowing down. So we thought now is a good time to explore crypto-investing in detail.

Why Crypto?

Cryptocurrencies are inflation-resistant and secure decentralized virtual currencies. The transactions are fast and cheap transactions on a peer-to-peer network, maintained on a tamper-proof distributed ledger called a blockchain. So why is it the hottest thing since sliced bread? 

Simply, it’s safe, secure, instant, and immune to bankers’ possible malpractices. 

The Pros and Cons of Crypto As An Investment

Pros:

High Returns Possible

October 20, 2021 saw Bitcoin trading at an all-time high of $66,974.77. Those who invested when it first started trading in July 2010 paid between $0.0008 to $0.08 per coin. There’s no other investment that can yield such a dramatic increase in value in this time frame. Its estimated projected price for 2030 varies from $397,000 to $500,000 per coin. So it’s safe to say it will keep rising steadily.

Inflation-proof

When inflation rises, the value of most investments fall. However, cryptocurrencies like Bitcoin and Ethereum remain unaffected. While gold was once considered the most effective inflation-hedge, that title now belongs to cryptos. 

Diversified Portfolio

Diversification has long been a popular risk management strategy wherein you invest in varied instruments such as stocks, bonds, commodities etc. An important addition to this ecosystem is investing in crypto. It has little to no correlation with stock markets. Even if the stock market seems to be crashing, crypto has been unaffected and even riding a high!  

Fraud Protection

Transactions are completely transparent, anonymous and do not require any confidential information. With their famously iron-clad security, it’s virtually impossible to lose your crypto coins in a data breach. Hence using a secure and established exchange like ZebPay is always a good idea. 

International Investment 

Those who want to invest internationally often need to deal with lots of red tape, long delays and exorbitant brokerage. Crypto, however, is borderless and allows instant investment for negligible transaction fees. 

Excellent Liquidity

While other instruments may take time to cash in, crypto is instantly available whenever you need it. This makes it an excellent ‘rainy-day’ fund, which can help you meet any unforeseen expenditure in an emergency. 

Cons:

While the advantages are undeniable, there are a few disadvantages too. First off, it’s volatile. Some currencies, especially the new ones, have the potential to rise astronomically, but they could equally fizzle out. The risk and reward are proportional. This disadvantage can be tempered by investing in an established currency. However, the rewards won’t be quite as dramatic.

Furthermore governments back fiat currencies and banks maintain the ledgers. So there is an authority overseeing these transactions. Cryptocurrencies have no such issuing and regulatory authority.

If you invested in a coin that crashes, that value is lost. If your wallet is hacked, there’s no authority who can get it back for you. There have been cases where people have forgotten their private key, effectively locking their assets away. Since there’s no third party you can appeal to for intervention or a ‘lost password’ link, it’s lost for good. So keep your private key somewhere extremely safe, or better yet, go through an exchange like ZebPay, which holds it for you.  

The Bottomline

Cryptocurrencies are a formidable investment opportunity. And like every investment, you need to understand it fully, analyze trends, find the right coin to buy at the right time, what the risks and benefits are, and decide how much risk you’re willing to take on for proportional rewards. We understand that this can get overwhelming, which is why ZebPay is happy to help you start on your crypto journey with its easy and intuitive interface to access your completely safe and trustworthy wallet. Investing in cryptocurrency is a once-in-a-generation opportunity, and it’s fast becoming an indispensable instrument in a diversified portfolio because of its steady, inflation-proof growth that doesn’t seem like it’s going to slow down. 



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