At the moment, crypto currencies are the “in” thing. Although the currencies are still fresh on the market and out of the usual, everyone wants a piece. That’s very understandable. Crypto is not only new, but it is also incredibly hazardous. The cryptocurrency market is much more unpredictable than the stock market, and it is still unknown if digital coins will outlast stocks in the long run.
Having said that, there’s a lot to gain from holding cryptocurrencies if you understand the risks involved. Here are three reasons why you should consider investing in it.
- Crypto can make you wealthy
You might acquire shares of a MTN stock for Ugx100,000 , only to have them increase in value to Ugx 300,000 each later. Cryptocurrency follows the same logic. The value of digital coins fluctuates over time, and you may find yourself in a position where you can sell your coins for considerably more than you bought for them. Naturally, the inverse is also true.
- It can lend to diversity in your portfolio
There’s a reason why investors are urged to diversify their portfolios on a regular basis. A varied portfolio of assets can protect you from losses during market downturns while also allowing you to build wealth over time as different markets thrive.
If your present investment portfolio consists only of equities, adding bitcoin to your mix could prove to be a wise decision. Consider a scenario in which the stock market crashes and your investments take months to recover their value. If your bitcoin assets remain stable at the same time, you won’t be seeing such large losses — even if they’re just screen losses compared to the actual losses you’d face by selling investments for less than what you purchased them for.
- It can be treated as bonus cash
Some people purchase cryptocurrencies with the expectation of losing all of their funds. As a result, when their investments succeed, they are free to run with their profits and do anything they want with them.
If you’re not sure about cryptocurrencies but have some spare cash and want to experiment with it, you may follow a similar strategy.
Let’s say you were given 50,000Ugx as a birthday present and decided to invest it in cryptocurrency. You can walk in thinking you’ll lose that 50,000Ugx in a week. But what if your investment’s worth rises to 200,000Ugx? You can then cash out and regard your profit as extra money to spend as you like (though keep in mind selling cryptocurrency at a higher price than what you paid for it means having to pay taxes on your gains).
Although cryptocurrency is definitely not for everyone, it pays to conduct some study and give it a shot if it’s something you’re interested in. It could be beneficial to you in a variety of ways.