Cryptocurrencies are a significant form of investment now. Most investors and senior traders consider cryptocurrency the major component of their portfolio, and there are solid reasons for that. The first one is that cryptocurrencies are highly rewarding and less dependent on external factors. Almost all cryptos do not depend on other global factors such as inflation, interest rates, etc.
So, this makes it even simpler to invest in crypto than any other growth asset today. Cryptocurrencies are digital assets one could invest or trade-in to diversify their portfolio. Here are some of the significant benefits that you could reap through crypto trading:
1. Acts as a shield against inflation
Suppose you are concerned about the growing inflation and decaying your investments and other liquid money. In that case, investing in these inflation-proof investment instruments named cryptocurrencies might make sense. As per records, the inflation has summed up to a massive number that amounts to 8.20%. This may seem minor to you, but to most investors and traders, it is an alarming situation.
This is why you should continuously diversify your portfolio across assets, including crypto, and hedge against inflation with the benefits of increased volatility. Even smaller amounts can bring fantastic results in cryptocurrencies due to their volatile nature, which can be a great way to invest in small pieces with proper risk management for huge returns.
2. Volatility and rewards
Despite being relatively young, the cryptocurrency market has seen a lot of volatility because of the enormous short-term speculative interest. For instance, the cost of bitcoin fluctuated between October 2017 and October 2018, reaching highs of $19,378 and lows of $5851.
Rapid intraday price changes can offer traders various opportunities to go long and short, but they also carry a higher risk and boost that trading spirit. While new technologies frequently draw speculative interest, talking of other cryptocurrencies seems to have historically been more stable.
3. More liquidity
Liquidity is another important aspect when trading an asset for those who don’t know about liquidity. In simple terms, it is just a metric used to determine how much money is invested in the asset, its trading volume, and market capitalization. Liquidity helps determine the asset’s product value, nature, and other essential factors while trading. Cryptocurrencies are highly liquid, making it simpler to shift from one coin to another for trading purposes.
4. Never-ending Market hours
Most traders lose a lot of trading calls and opportunities because of short market hours. If we consider the case of stock markets with an average opening time of seven and a half hours, it may seem a bit short for many traders, as they would like to cash in the opportunities that might not be able to the other market day.
Unlike this, the crypto market is open 24 X 7 because simple transactions involving cryptocurrencies are carried out directly between individuals without any involvement of governments or banks. Of course, like any other digital asset, it may be possible that crypto markets are in downtime when the market is in the development stage due to some occasional infrastructure updates. Click here to check Finixio AI to learn more about trading.
5. Security
It is a well-known fact that cryptocurrencies are much safer than any other asset because these are decentralized and are not controlled by any country’s government or financial institutions. This means the blockchain and the user are the only entities involved in the transaction.
Security shouldn’t bother you while trading. You should always look at the past contents of the cryptocurrencies you are considering trading. Crypto networks are built on advanced technologies that have simple-to-execute security solutions. Creating online wallets to store your money is easy and relatively safe.
6. Low fees and quick trade settlements
Fees are one of the most critical factors for any trader, especially those who trade intraday or scalp. With the rising popularity of cryptocurrencies, many exchanges offer very low trading fees and transfer charges. These can be highly beneficial for traders who take multiple trades within a short period, as they can take more trades without worrying about fees and costs.
Due to the fast network infrastructure and decentralization, cryptocurrency conversions and settlements are quick and require minimal settling periods, no matter how small the amount is.
Final thoughts
Cryptocurrencies are not just beneficial as a new method of discreet online payments but carry many great benefits for everyone, including traders and investors. These are different from traditional assets like stock markets and bonds but also have some risks. It is always suggested to research and choose good platforms like Finixio to invest in cryptocurrencies.
Once you start, you can trade at any clock hour and reap the benefits of decentralized volatility.
