By Steve Burnett
Cryptocurrencies have come a long way and are now becoming an integral part of investment. Although the crypto industry still faces challenges around regulation worldwide, it has attracted many investors, including institutional investors.
The industry still holds some promise for those who have been following it. It is one of the fastest growing industries, reaching a market cap of over $1 trillion in less than one and half decades.
Cryptocurrencies and the underpinning technology, blockchain have continued to affect many sectors of the global economy, which means it will continue to be relevant. In addition, here are five reasons why you should consider adding cryptocurrencies to your retirement plan.
They serve as a hedge against inflation
Inflation is the continuous decline in the purchasing power of a currency over time. This is a feature built into fiat currencies around the world for reasons best known to the government. In addition, the government also makes decisions that continue to weaken the purchasing power of fiat money.
This is glaring in many countries including the US. The USD has fallen in value especially as the Fed continued to print dollars to support citizens during the Covid-19 lockdown. Similar patterns are seen in countries like Turkey, where the citizens have turned to cryptocurrencies to protect their wealth.
You too can do the same and invest in cryptocurrencies against your retirement. They have steadily increased in value over the years, particularly Bitcoin which is referred to as digital gold. This makes it a hedge against inflation that characterizes fiat currencies.
Many employers now allow their employees to invest part of their retirement savings in crypto. You can take advantage of that and invest in this revolutionary industry.
Bitcoin ETF on the way
One of the things holding back the explosion of the crypto industry is a lack of a spot Bitcoin exchange traded fund (ETF). This is a fund that will give investors exposure to Bitcoin without them having to directly buy and hold the asset.
One of the things it does is that it boosts investors’ confidence and reduces their fear. Although there have been several applications for such a fund in the US, it has not succeeded but that may be about to change.
It is not certain yet, but the Blackrock ETF application may receive a green light. If that does happen, institutional investors are likely to troop into the industry, initiating the much needed exponential growth the market has been waiting for. You don’t want to be left out when this finally happens.
They are easy to manage
Cryptocurrencies are easy to manage, unlike traditional investments that require finance experts and all. You don’t have to invest through an ETF if that is cumbersome for you. You don’t even have to use a retirement account for it. You can simply buy and hold your assets and wait for the price to go up.
Whenever the price goes up, you can be sure you’ll benefit from the gains. This may not happen in one year or even two, but if you’re really buying against your retirement, you should be aiming for five years and above, which is enough for crypto investments to mature.
They are available worldwide
Crypto assets are the only assets available worldwide to whoever is interested as long as they have internet access. If you have missed out on some investments because of your geographical location or other reasons, crypto will make a good investment for you.
You can use them as money
Beyond being investment assets, crypto assets are also currencies you can use to buy and pay for services. Before now, this was difficult, but there are currently thousands of merchants worldwide that accept cryptocurrencies, especially the top ones as payment for goods and services.
Conclusion
Cryptocurrencies have demonstrated over the years that they hold potential both as investment assets and as money. They are still early and the industry is still growing, which makes it a perfect time to get in.
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