Some people feel crypto’s appearance signals changes in the financial world and perhaps even beyond. That might prove true as time passes, but we can’t tell for sure right now.
In this article, we’ll talk about crypto and its implications. We’ll also discuss whether you should use crypto as an investment vehicle.
What is Crypto?
Cryptocurrency is digital currency that investors describe as coins. These currencies exist in the digital realm, and investors track them using blockchain technology. Because crypto and blockchain link up for tracking purposes, crypto theft becomes virtually impossible. It’s not like physical money that someone can steal or you can misplace.
You can use crypto for investing if you like. You can also buy things with it. If you use crypto as an investment, you might buy individual coins thinking that they’ll become more valuable. You can sell them when they do. You may also build a crypto portfolio, much like a stock portfolio.
Does Buying into Crypto ETF Portfolios Make Sense?
A crypto ETF portfolio means crypto that you buy as an index. An ETF is an exchange-traded fund. Building a successful crypto ETF portfolio might appeal. You can put money into a managed one if you don’t want individual coins.
Doing so lets you essentially forget about the portfolio. You can monitor it as much as you’d like, but you don’t have to do anything with it. Each portfolio has a manager that modifies the assets according to the analytic data they collect.
Ideally, you’ll see a profit from your portfolio eventually. It’s like putting money into a mutual fund.
Do You Need to Start Crypto Investing?
Some seasoned investors ignore crypto entirely. Some feel it’s a fad, despite a total market cap valuation of over $1 trillion dollars at the moment. The total market cap tracks the entire crypto market’s worth.
You can also monitor an individual coin’s market cap valuation. The higher it gets, the more popular that particular coin is.
Nothing says you must put cash into crypto. Still, some individuals have made money through it, and you even encounter the rare millionaire who figured out the perfect moment to buy and sell their crypto assets.
You should only invest in crypto if you can handle the inherent risk factors. That’s true with stock market investing too, though.
Changes in the Financial World Through Crypto
Crypto rocked the financial world when it first appeared, and that continues to this day. Investors can generate new revenue streams with crypto if they know about leveraging it. Some coins have more significant implications than that, though.
Developing economies can increase their social and economic status through crypto. Many entrepreneurs see crypto as a way they might fuel their various ventures. With blockchain technology, they can access capital through sectors closed off until recently.
They might broker deals with new investors who can transfer them money instantaneously in crypto form. Some venture capital firms and angel investors hand over seed money for tech startups in Bitcoin.
The mogul or entrepreneur who brokered the deal can have their financial backing without waiting on banks for wire transfers that might take days using traditional or outdated methods.
Crypto Means More Economic Activity
Crypto’s very existence also triggers more monetary movement in the digital realm. Amateur investors enter the market, even those with very little trading capital. Some lose their investments quickly, but others rise and become prominent seemingly overnight.
Crypto feels and looks like another Wild West since there’s little regulation or oversight. While some governments try stepping in where they can, tamping down digital currency or getting its movement under control is almost impossible.
Blockchain, which goes hand in hand with crypto, can potentially disrupt many industries, and not just the financial world. Some experts believe the legal workarounds crypto offers might eventually destroy the banking world as we know it.
Can We Function Without Banks?
In theory, blockchain technology might allow untrusted parties to agree on transactions without needing the banks, which function as middlemen. Blockchain and crypto coins provide ledgers that require no administration.
That means blockchains can anchor financial services like securitization or payments without banks. The banking industry could collapse, though what the world might look like without it remains uncertain.
One thing remains evident. Blockchain and crypto are dual technologies that have disrupted the financial world. We do not know yet whether that might prove positive, negative, or perhaps both.