When’s the last time you sat down and planned your investment strategy? I mean really took the time to evaluate everything you’re invested in for the future? Truth be told, often times the answer is either “not often” or just “never.” There are a lot of choices for investing nowadays, but we’ll take a minute to break down the benefits of cryptocurrencies and explain why they are both a relevant and important option for investors. We’re not just talking about throwing some extra change into an account and trying to day trade, either; we’re talking about serious, long term investment strategies here. So let’s break it down.
Early Adopter Advantage
There’s no question that it would have been awesome to have gotten into Bitcoin (BTC) when it was trading at less than $.50, but does that mean you’ve already missed the boat? Absolutely not.
Even though we’re seeing many highs that have never been reached before, there is an incredible amount of room for growth. If you’ve been in the space for a while, then you might remember people selling off Bitcoin when it hit the $800 mark only to see them kicking themselves now that it’s consistently trading for over $11,000. Hindsight is 20/20, right?
Well just like then, there is still a lot of room for cryptocurrency to grow. Even in its current stage, the crypto-community still hasn’t seen complete widespread adoption in popular culture yet. That’s beginning to change now, but the cryptocurrency market is still in its infancy stage when it comes to adoption.
If you ever begin to feel like maybe you’ve missed your opportunity to invest before everyone has, consider that as recently as the summer of 2017 only around 3 million people in the world were invested in cryptocurrencies, according to a study published by the Judge Business School at the University of Cambridge. When compared to the global community, those 3 million people only constitute roughly 0.04% of the world’s population.
Those numbers are rapidly increasing, but when you hear about all the hype around cryptocurrencies, it can be difficult to remember just how small the space actually is still.
Room for Growth
The primary advantage for being in on the movement earlier than a lot of other investors is what comes from being an “early adopter.” Since the cryptocurrency community is still incredibly small compared to the globals markets, there is only going to be stronger and larger growth as more people start funneling into the markets.
As new investors flood the space, more capital is brought with them, new projects develop, solid projects get more funding, and your initial investment is likely to see high growth because of it.
To put things into perspective again, looking back at when many in the community thought Bitcoin had really capped out around $800, we’ve seen absolutely astonishing growth since. In 2017 alone, the total market capitalization for cryptocurrencies saw a 2,700% increase from the previous year, increasing from around $17 billion to over $500 billion! That’s a lot of growth, and it’s not done growing!
Low Barriers to Entry
The last, but most certainly not the least, point to consider is the low barrier to enter into the market. Unlike a lot of traditional investment strategies that require individuals go through a company’s specific platform, use their service, and pay their fees, the cryptocurrency markets remain easy to enter and accessible for the regular person.
The most difficult part of getting involved in the crypto-community and investing today is establishing an “on-ramp.” An on-ramp is simply an exchange/service that’s trustworthy and allows users to purchase a cryptocurrency (typically a larger market cap asset like Bitcoin, Ethereum, or Litecoin) directly with fiat currency (US dollars, euros, etc.).
Exchanges like Coinbase/GDAX allow users to do just that using ACH bank transfers, wire transfers, credit/debit cards (some restrictions apply), and even PayPal in some cases. After you’ve established a solid on-ramp, investors have a whole host of options for acquiring other crypto assets. Once you’ve purchased a main asset like BTC, LTC, or ETH, most altcoin exchanges don’t require a lengthy verification process to exchange crypto/crypto pairs (please remember not to leave investments on exchange wallets: If you don’t own your private key, you don’t own the crypto!).
At a time when the financial industry is seeing record lows for traditional investments in the stock market, taking advantage of other options is important. Cryptocurrencies allow potential investors the opportunity to get involved before the global markets completely implement this new asset class.
If you’re an investor looking to secure a strong position for the future, go to a cryptocurrency conference, meet some of the teams developing the projects, and start doing some due diligence on projects that excite you! Right now is one of the best opportunities available for newcomers who don’t want to be in the position of those regretting it when mass adoption comes along.