When you first heard of cryptocurrency, were you skeptical about it or wondered if it would ever last? Now that crypto has been around since 2009, maybe your thoughts about it have changed and you want to invest, or already have invested in crypto, but worry about its future. Today, we’ll give you three reasons why crypto may be the future of investing.
1. Growth of Crypto
The growth of crypto is perhaps the most significant indicator that it may be the future of investing. When one of the first cryptocurrencies (Bitcoin) was created in 2009, there was little recognition. Many probably thought it would amount to nothing.
When you compare the total number of cryptocurrencies from the time the first one was created to now, however, you’ll discover there are thousands of cryptocurrencies in circulation.
BitDegree explains that this growth especially took off in 2013, where over 1,500 new cryptocurrencies were created in less than five years. On top of that, they add that the market cap for crypto grew nearly 4000% in 2017, to a value of $21 billion. They also claim its value has since then risen to $454 billion at the time of writing this article.
Let that soak in for a minute.
It’s hard to ignore the fact that crypto has grown significantly in just a relatively short amount of time and that it continues to grow. Clearly, it’s the future of investing.
“Blockchain” is a confusing term. And you may ask how it relates to crypto. First, blockchain is a technology used to keep a record of data transactions; it’s a digital ledger.
What makes this technology so noteworthy is that it anonymizes and verifies data during its transferral. There’s no need for an organization, such as a bank, to regulate or verify transactions. It explains why blockchain is most commonly referred to as being decentralized.
So, now we come to how it relates to crypto.
Investopedia states, “If a user’s bank collapses or they live in a country with an unstable government, the value of their currency may be at risk. These are the worries out of which Bitcoin was borne.”
A physical currency relies on a government to regulate and keep its value. On the other hand, cryptocurrencies, like Bitcoin, do not rely on a government. Instead, crypto relies on blockchain technology for its creation and transactions rather than a government or bank. Blockchain also gives stability to cryptocurrency.
Billions of dollars have already been invested in this technology due to its potential. And big companies have already started using blockchain to create a cryptocurrency of their own. It is just one other indication that crypto is here to stay.
3. Cryptocurrency Recognition
If there is one other big reason why crypto may be the future of investing, it would be that it has gained recognition.
As crypto grows, so does its trust. Many companies are now recognizing the potential of cryptocurrency and what it can bring. Companies like Microsoft and Shopify, for example, accept payments with Bitcoin.
Even PayPal, at the time of this writing, recently integrated cryptocurrency into its platform, allowing you to buy and sell major digital currencies.
The list goes on, but companies are making it possible for customers to buy goods and services with crypto just like you would with regular currency.
Not only that but technologies, such as crypto tax software, have been built around crypto as a result of governments now requiring their citizens to pay taxes on their cryptocurrency gains. Again, this reveals that it is gaining recognition, even among some governments. If you have questions on how to file your taxes for crypto, check out the crypto tax software provided by TaxBit here.
One last thing: if you browse the internet for resources on crypto, you can find plenty of information about that topic. This means people are talking about it and are becoming more aware of its existence and potential.
The Future of Investing
While crypto does have its caveats, it’s apparent that it is becoming more established and accepted as part of society. And with the advancements of blockchain technology and the benefits of other types of software associated with crypto, such as crypto tax software for easier tax reporting, it makes sense that it is growing. That means crypto could very well be the future of investing.