Should You Invest In Crypto?

Ten years ago, most people would have laughed if you said you hold part of your investment portfolio in cryptocurrency – a type of virtual currency that is secured through various cryptographic and computer-generated means. But these days, you might be seen as behind on the times if you don’t currently invest, or if you have never traded a single Bitcoin, Ethereum, or Litecoin in your life.

Like it or not, cryptocurrency is practically everywhere these days and no longer just for day traders and nerds. In fact, many traditional businesses are integrating cryptocurrency into their platforms in some form, or using it as a means to launch other types of products.

Cryptocurrency Continues Gaining Steam

Case in point: In October of 2020, PayPal launched a new service that made it possible for their account holders to buy, sell, or hold cryptocurrency, or to use it to buy stuff at 26 million different merchants.

According to the payment platform, mainstream use of cryptocurrencies has largely been “hindered by their limited utility as an instrument of exchange due to volatility, cost and speed to transact.”

However, they believe their platform could provide a means to make cryptocurrency more useful as a payment method.

“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly,” said Dan Schulman, president and CEO of PayPal in a press release.

Edmund McCormack, founder of crypto investment platform DChained, says this move on behalf of Paypal PYPL -4.6% was expected but also needed to usher cryptocurrency into the mainstream.

“This decision directly addresses three of the most common objections that cryptocurrency has faced in the last 10 years, including practicality for day-to-day purchases, a clearly defined and easy to use marketplace, and legitimacy,” he says.

McCormack also points to the payment platform Square SQ -3.2%, which reportedly invested $50 million into Bitcoin in October of last year.

At the moment, you can choose from a nice selection of cryptocurrency savings accounts. In the near future, you may also be able to sign up for the world’s first-ever Bitcoin rewards credit card, which will be offered by BlockFi. The BlockFi Bitcoin Rewards Credit Card will work like traditional rewards credit cards, except that you’ll earn 1.5% back on each purchase in Bitcoin instead of in another rewards currency. Currently, this card is on a waitlist.

What does all of this mean? As more and more businesses and platforms find ways to utilize cryptocurrency – or let their customers use it – it will become even more mainstream than it already is. But, should you invest in cryptocurrency?

The answer depends on who you ask.

Why You Should Consider Investing In Crypto

Bitcoin reaching all-time highs and legacy financial institutions adopting cryptocurrency means that digital currencies have finally become an important part of finance and FinTech.

In terms of advantages, cryptocurrency gives consumers greater choice, independence, and opportunity in their finances. Further, cryptocurrency’s decentralized, open-source nature helps “eliminate the weak points of the modern banking system by bringing access directly to consumers. This makes it easier to buy, sell, store, and trade the best performing assets of the last decade.

Not only that, cryptocurrency is in its infancy. This means, if you invest now, you could be getting in on the ground floor “even though the prices seem high.”

After all, some experts have suggested that Bitcoin could be worth as much as $100,000 one day. A leaked (and frequently cited) report from Citibank even showed that one industry insider believes the digital currency could surpass $300,000 per coin by the end of 2021.

Investing in a new investment vehicle like Bitcoin has the potential to lead to massive gains (as well as massive losses). Further, cryptocurrency is easily one of the most liquid investment assets since trading platforms have been established across the globe.