Cryptocurrencies have been around for more than a decade. During this period, they have gone from being widely argued to being a helpful sector in the global economy.
As it stands, the world has accepted the concept of digital currencies. Some governments have taken digital assets as an alternative to the present-day cash system; some are indifferent, while a few have opposed it. Despite this, digital currencies are gaining popularity, with celebrities and VIPs investing considerable sums in Bitcoin and altcoins, as they have Bitcoin business ideas they want to explore.
A few notable names who have invested in bitcoin include Elon Musk, Kanye West, Mark Cuban, Bill Gates, Jeff Bezos, and Serena Williams. It can be recalled that in 2013, Snoop Dogg accepted Bitcoin as payment for the sales of his album, Reincarnated. The cost was set at 0.3 BTC per copy.
The crypto market is a volatile one with limited assets to trade. Currently, only 21 million Bitcoins exist. This scarcity makes it a unique and attractive investment, as the space is growing and attracting investors in droves. This implies that the future of the industry is bright.
There are many reasons why cryptocurrency has grown and is still growing.
Medium of Payment
Cryptocurrency is perceived as a means of payment and has been adopted by many institutions. Traditional banking facilities now recognize crypto as a payment medium, and the level of acceptance is predicted to increase in the future.
Recently, VISA announced a proposed crypto consulting agency to service banks and merchants around the world. PayPal is another payment giant that has also adopted Bitcoins as proof of payment. Other payment systems may soon adopt digital currencies as proof of payment in the future.
Cryptocurrencies can serve as proof of payment for global transactions. International companies have a higher chance of accepting cryptos as a payment method. Not only will this increase its value, but it will also give people around the world a chance to experience a decentralized financial system.
The Halving Technique and Stock-to-Flow Model
Digital currencies like Ethereum and Bitcoin have an in-built escrow system. This mechanism allows miners to be rewarded with a unit of cryptocurrency once a transaction is completed. Every four years, the rewarding process is reduced by half, causing the perceived inflation rate to be reduced. The halving technique significantly improves the stock to flow ratio.
A Suitable Safe-Haven Asset
Cryptocurrencies are perceived as haven assets by financial experts around the world.
A safe-haven asset is a financial instrument that rarely loses its value irrespective of the state of the economy. The asset either retains its current worth or gains value during economic letdowns.
For example, during the global inflation in 2021, cryptocurrencies like Bitcoin increased in value and reached a new all-time high. This proves that the perception of cryptos as haven assets is not farfetched.
Despite their volatility, cryptocurrencies have the potential to grow by multiple folds in this decade and the next. Investors are assured of greater returns on investment, and more investors are urged to invest in the crypto space.
A Passive Income Source
Cryptocurrencies have provided an avenue for people around the world to trade and make a passive income. Either through mining, staking, HODLing, or active trades, investors are becoming rich. This is enough to attract more investors to join the crypto train, regardless of the risk attached.
The Increasing Popularity of Crypto
The increasing popularity of decentralization has contributed to the rise of cryptocurrencies. In the past few months, web3 and NFTs have become widespread, making headlines on global news channels. Research shows that the worldwide crypto adoption index reflected an 800% increase in the acceptance of cryptocurrencies worldwide. This means that the assets might show an upward trend this year.
Its secure and decentralized blockchain has propelled investors to delve into the new projects offered by the crypto space.
Where to?
There is no limit in sight to the levels cryptocurrencies could reach. These assets and the projects they host are here to stay.
In the last quarter of 2021, Bitcoin hit an ATH of $69k, Ethereum hit $4878, BNB $680, and Solana $260. There are telltale indications that these major coins and other altcoins could breach their current ATHs and set new records.
Crypto projects like nonfungible tokens and DeFis will also boom at alarming rates. Simply put, crypto still has a lot of growing to do.
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