Is Cryptocurrency Worth Your Investment?
Cryptocurrency has had a bit of a checkered past. First brought to the world in 2008, the asset saw dramatic gains. That is, until questions with regard to regulation started to come about. After bitcoin reached an all-time high of nearly $20,000 and other cryptocurrencies followed, these questions led to drastic declines that have been felt throughout the first half of 2018. However, it seems as though a reversal may be taking shape. So, the big question is, “is now the time to consider investing in cryptocurrency?”
What Is Cryptocurrency
Cryptocurrency is a currency like no other. It was born of technology, rather than printed on paper. Living on a transparent ledger, known as the blockchain, cryptocurrency is considered by many to be the most secure currency on the planet. However, that’s not where the true value lies.
For many, the real value of the cryptocurrency space lies in the fact that the crypto-space could lead to a decentralized financial environment. Today’s economies and the currencies that dictate their movement, are largely dependent on what we know as central banks. These central banks put monetary policy in place to control the rate of inflation, among other economic factors.
Nonetheless, many believe that central banks in today’s monetary environment do more harm than good. As a result, a decentralized monetary system is necessary.
On another hand, cryptocurrency provides another point of value. Today’s economy is a global one, with cross-border transactions happening all the time! Due to the digital nature of cryptocurrency, cross border transactions can happen faster, cutting the time to receive funds from days or weeks to seconds.
With all of that in mind, if you’re wondering if there’s anything to this crypto-craze, you’ve got your answer. At the end of the day, these alt-coins ultimately provide solutions to some of the problems faced when trying to live in a global economy with fiat currency.
Does Cryptocurrency Have Any Value?
From a monetary sense, cryptocurrency is about as valuable as those who buy it believe it is. Unlike fiat currency, cryptocurrency isn’t printed on paper or metal. It is nothing more than a code that lives on servers all around the world. However, it derives its value through providing solutions to economic problems. As a result, today, investors value Bitcoin at over $6,900 per coin.
When speaking of value, an important part of the discussion is liquidity. The good news is that crypto is very liquid. In fact, there are several brokers, wallets and other services that give you the ability to turn your cryptocurrency into fiat currency. So, cashing out on an investment won’t be difficult at all.
Is Now The Time To Consider Crypto-Investments?
This is a tough question to answer. However, I lean more toward the expectation of growth, rather than the expectation of declines. Here’s why:
- A Much Needed Solution – The honest truth is that I am a believer in the need for cryptocurrencies. As a writer, I work for clients around the world and I feel the pain of payment delays. In fact, I have a cryptocurrency wallet just for some of these clients to pay me faster. Also, I live and breathe in the finance sector, and the economic impact of central banks can be difficult to take. I honestly believe that decentralization of currency will help to lead to a more stable global economic environment.
- Social Views Are Improving – When cryptocurrency went on its run, social networks and other online outlets ceased accepting advertisements surrounding them for fear of fraud. However, even Facebook has changed its views, recently announcing that it would allow crypto-related advertisements.
- Valuation – Due to the drastic declines seen on cryptocurrencies throughout the first half of 2018, the valuations of some of the most popular cryptocurrencies out there are incredibly low. I believe that these low valuations represent a strong opportunity for growth ahead.
The bottom line here is that at present values, the stronger cryptocurrencies on the market are presenting strong opportunities for growth. So, now may very well be the time to dig in!
Note: This article was contributed to Modest Money by Josh Rodriguez. Joshua is the owner and founder of CNA Finance. He is also a partner at Modest Money. His analysis has been featured on Investing.com, Yahoo! Finance, Google Finance, Google News, and many others.
Category: Currency Trading
