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Wondering why you should own some cryptocurrency? Owning great cryptocurrencies is now a fiscal responsibility and not a speculative act.
Not long ago, the mainstream financial media saw cryptocurrency as a speculative fad. That era is no more. Cryptocurrency is a legitimate asset and those that do not accept this reality are missing out.
Here are some reasons why you should own some cryptocurrency.
<< Read: Why You Should Care About Cryptocurrency >>
If you believe in how powerful long trends are, then you shouldn’t ignore the gradual mainstreaming of cryptocurrencies like Bitcoin and Ethereum. To be specific, some of the biggest companies in the world are buying cryptocurrencies in bulk. For instance, in February, Tesla bought $1.5 billion worth of Bitcoin.
Square, a digital payments company, bought $170 million worth of Bitcoin in late February. The world’s largest derivatives exchange, CME Group (CME), also started offering Bitcoin futures in late 2017.
These transactions are minute when compared to the total amount of money that can be converted to Bitcoin. For instance, if Apple converts only 10 percent of its cash into Bitcoin, it would end up buying about $19.6 billion worth of Bitcoin. This is over 10 times more than Tesla’s $1.5 billion purchase.
Then we have trillions of corporate cash that are sitting on the sidelines across the world.
Reducing Trust in Governments and Financial Institutions
Cryptocurrencies like Bitcoin and Ethereum help to minimize the trust people have in governments and financial institutions.
According to Maria Paula Fernandez, the advisor to the board of directors at golem Network; “Investing in Bitcoin and Ethereum are natural ways to minimize the trust layer in governments and institutions that have failed to look out for the public and protect individuals from the fragility of traditional financial systems as they are both assets that do not require central parties to verify, create or administrate them.”
Cryptocurrency is a Deterministic Asset
Cryptocurrencies are assets that were not possible for a major part of financial history. Gold was the closest asset class to Bitcoin in the past.
The interest that corporate organizations have in Bitcoin, coupled with the unprecedented rise in money supply in the United States, make Bitcoin more compelling for Americans. This has created a strong use-case for cryptocurrency, especially Bitcoin since only 21 million bitcoins will be mined.
Although gold, copper, silver, and palladium also have limited quantities, the total amount of reserves on earth can change and new minerals can be discovered. Bitcoin on the other hand has a hard cap on the maximum quantity that can exist. Apart from the fact that Bitcoin is unique when we consider the events that happened in the past, it is also unique going into the future.
There are a series of factors that make quality digital currencies like Bitcoin less risky than other assets. This cryptocurrency is unique due to its well-defined scarcity, slow increase in supply with time, and hedge-like features that make it immune to government control.
The fact that assets like gold are becoming less reliable also makes it viable to own some cryptocurrency.