Investments: The Global Shift to Cryptocurrencies

Do you remember back in 2009, when Bitcoin was created, and suddenly, everyone was convinced that they were going to become a cryptocurrency millionaire?

Since then, cryptocurrency has evolved from something that has been considered quite unstable to now being a recognised and respected investment asset. Indeed, the EU, the US government and the UAE are all paying attention to cryptocurrencies and drawing up ways to merge them with their countries' financial infrastructure.

Why has this happened and how does it impact the future of investing in cryptocurrency? Read on to find out.

Decentralisation and Financial Independence

One of the main reasons for the global shift towards cryptocurrency is the decentralised nature of this investment. Traditional currencies are controlled by central banks but many cryptocurrencies operate on blockchain networks, which are often overseen by platforms like coinex.com. This kind of structure appeals to investors seeking alternatives to government-controlled funds, particularly in places where there are higher rates of inflation, which can drive down the return on investments.

Increased Institutional Adoption

Many institutions have legitimised cryptocurrencies as investment options, which include major financial firms and hedge funds. This has helped to improve market liquidity relating to cryptocurrency and has driven up regulations. Historically, there weren’t many regulations around the trading of cryptocurrency online, but, as professional investors continue to purchase this currency, it’s being increasingly viewed alongside traditional commodities and real estate. In other words, it’s being taken more seriously. 

Accessibility and Global Reach

Without aiming to cheapen cryptocurrency, it has lowered barriers to entry for many global investors. A person no longer needs to have access to a stockbroker or financial advisor to purchase cryptocurrency. All that’s needed is an internet connection to participate in buying this form of digital currency. Also, you can often purchase cryptocurrency with smaller capital requirements than other investments, which is very impactful for investors from developing economies. The presence of digital wallets and exchanges allows users to store, trade and transfer cryptocurrency across borders at the click of a button and at noticeably lower cost than other trades, which makes it a more popular option globally.

Portfolio Diversification and Risk Considerations

As cryptocurrencies have been around for over a decade now, they're starting to be seen as a secure option, so many investors view them as a tool for diversifying their portfolios, rather than being something to invest in on their own. As well as this, they’re also being seen as more stable. However, you should note that they’re all still quite volatile compared to other investments, which has led many investors to include cryptocurrencies only as a small portion of their portfolios. If you’re thinking about investing in cryptocurrencies, you should make sure that you’re familiar with the security risks and market fluctuations, as these are important considerations that you may need to seek guidance on.

How the world views cryptocurrencies is changing, thanks in part to the security and technology around these options. So, if you’re curious and don’t want to miss out on this option, do your research into on-chain cryptocurrencies and start assessing their risk against your financial goals.