The Future of Cryptocurrencies: Are They a Good Investment?

Cryptocurrencies have become a staple in our modern society. They are growing in popularity and value every day, making an impact on the world in ways that are more and more permanent. For the average investor, you might be curious if investing in cryptocurrency is a good idea. What does the future hold for this online currency?

Read on to learn about the future of cryptocurrencies and whether or not it is a good idea for an investor to place money into this electronic world. There are many ways in which this market might go. We will discuss everything that you should know about this growing product.

Table of Contents

What is Cryptocurrency?

When Did Cryptocurrency Start to Become Popular?

What Cryptocurrencies Are Good Long-Term Investments?

Is Bitcoin a Good Long-Term Investment?

Is Ethereum a Good Long-Term Investment?

Is Dogecoin a Good Long-Term Investment?

Is It a Good Idea to Invest in Cryptocurrency as a Whole?

Benefits of Investing in Cryptocurrency

Disadvantages of Investing in Cryptocurrency

What Does the Future Hold for Cryptocurrency?

Sources Used:

What is Cryptocurrency?

For those not familiar with cryptocurrency, it is critical to know what it is before getting involved. Essentially, cryptocurrency is a form of payment that many uses in exchange for goods and services. Rather than paper cash, a cryptocurrency operates as a digital coin.

Investors can exchange real, physical money for as much of a cryptocurrency as is available. Many enjoy this currency because it has been decentralized, meaning that it is harder to track and lacks the fees that many banks charge to transfer or store money.

Cryptocurrency has many other qualities as well, which include:

  • Its ability to be stored online in a safe and compacted format
  • Blockchain technology, which allows the information to be distributed but not edited or decentralized
  • Vast encryption networks that protect each type from harm that might come their way

Cryptocurrency is just a digital format of money. However, it is much more secure and safe than physical bills. Many want to invest in it. This is where the question comes in. Is cryptocurrency a good investment? Will it stay strong as time goes on? How did cryptocurrency even become so popular in the first place?

When Did Cryptocurrency Start to Become Popular?

The rise of cryptocurrency can be traced back to the release of bitcoin in 2009. A mysterious man released the item into the market, an individual who is unknown still to this day. It sat for almost a year. Individuals mined it, but no one used it for currency until an individual traded his share for two pizzas.

From that point on cryptocurrency began to boom. Because bitcoin had been used as a real form of payment, its value started to grow. Other cryptocurrencies blossomed around it, and the competition began.

Once popularity increased, the world of cryptocurrency was subject to a variety of issues such as:

  • Black market dealing, especially of illegal items that could not be traced
  • Scams, including the unfair trading or exchange of cryptocurrencies
  • Theft, including thousands of bitcoins disappearing from accounts
  • Price crashes, such as that of bitcoin in 2013

However, this did not stop people from continuing to buy. Eventually, worthy bitcoin competitors sprouted, and the future of cryptocurrency blossomed. With endorsements from tech moguls such as Elon Musk, this universe became one that fit into our modern society.

The future of cryptocurrencies should be interesting to behold, indeed. They might rise into their own time relying on the people to boost them in popularity in value. Or cryptocurrencies could continue to rely on things like celebrity endorsements and viral images or videos. This could make the entire market very sporadic and hard to predict. All we can do is guess and hope that the world twists our way.

What Cryptocurrencies Are Good Long-Term Investments?

There are a ton of cryptocurrencies out on the market. There are over 10,000 cryptocurrencies traded on the market today with public access, according to nerdwallet.com. With that many options, it can be easy to invest in a crypto that does not have a chance in the future of cryptocurrency.

There are at least a dozen popular cryptocurrencies on the market. We will dive into a few of these and discuss whether they are excellent long-term investments or short-lived options that will not make you very much over time.

Is Bitcoin a Good Long-Term Investment?

Bitcoin is easily the most popular of cryptocurrencies. Because of this, its value is one of the highest on the market. Though it is owned by so many, the item recently had a huge drop in value thanks to the words of Elon Musk.

There is a lot of debate about whether or not Bitcoin is something that is going to last. However, the fact that it has stayed around for so long at such a high value is a testament to what it is.

Bitcoin is a good Long-Term investment because:

  • It could become the first cryptocurrency to act as an official currency in the world
  • It has the potential to gain value the longer it is around
  • It is popular with a lot of people and thus it has sped up the process of moving into the real physical world as a format of currency

Bitcoin is one of the best cryptocurrencies to invest in for the future. Even if it is just a small amount, this item might be beneficial to your finances. It could be good to hang on to this while you still have a chance. You don’t even need to invest in a single bitcoin. You can put your money into a fraction of one and see where it goes.

Though the bitcoin market tends to ebb and flow, it easily shows the largest potential. This is one that anyone interested in the future of cryptocurrencies should hang on to.

Is Ethereum a Good Long-Term Investment?

Ethereum is another format of cryptocurrency that emerged on the market. Like any other investment, it has many risks that come with placing your money on it. However, there is also the chance for high rewards at the end of the day. According to fool.com, Ethereum has grown approximately 1000% from June 2020 to June 2021. That’s a massive amount of growth and not something to be ignored.

Ethereum tends to cost more than the average cryptocurrency. However, cheaper does not always mean better. Ethereum is an intricate system that continues to grow more and more each day. Investing a chunk of money might be good for your pocket at the end of the day.

Ethereum is also a great option for long-term investment because:

  • It can easily be traded for physical assets that you can touch and feel
  • It has a great way to store your cryptocurrency, ideal for the future of cryptocurrencies
  • It is a huge competitor for bitcoin, which has also been on a continual rise for a good amount of time

Next, up after bitcoin, this one is the greatest one to take part in for the future. It is not necessarily safe, as no investments truly are. However, you can safely know that you are putting your cash on one of the best on the market.

Is Dogecoin a Good Long-Term Investment?

Dogecoin, endorsed by Elon Musk earlier this year, is another cryptocurrency that has shot into the spotlight of the digital world. There are a ton of Dogecoin investors out on the market. Unfortunately, the value of a dogecoin has not even risen to one dollar, though many aspire to bring it close.

Dogecoin boasts a lot of things, but its value as a long-term investment is not one of them. It’s an item that has limited popularity, staying in the public eye only when it is being shoved there by a celebrity or a spokesperson. Dogecoin is also a bad long-term investment because:

  • It has virtually no value at all to those who only own a few, which is many
  • It constantly changes due to the huge number of people that have a share
  • One person owns a large chunk of all dogecoin
  • It produces an unlimited supply, which causes the value and desire to drop eventually

If you plan to make a long-term investment, do not pick dogecoin. Ethereum or bitcoin are much better options to choose from. Dogecoin may continue to increase in value, but at the moment it is barely under a dollar. It is not likely that it will rise much higher than that.

There is always room to be wrong, however. If you want to invest in dogecoin because it’s cheap, you are more than welcome to. Perhaps the value will increase exponentially over the next few years, drastically altering all of the predictions for the world of cryptocurrencies.

Is It a Good Idea to Invest in Cryptocurrency as a Whole?

Ultimately, the question we are asking is if investing in cryptocurrency is a good idea. We’ll go over a few of the benefits and disadvantages here to help you decide what your best option is.

With any form of investment, there are going to be downsides. Cryptocurrency is an ever-changing market, and even the best advice cannot necessarily predict the future.

Benefits of Investing in Cryptocurrency

There are many great things about investing in cryptocurrency. These can benefit the future of your finances and involve you in the future of cryptocurrency.

Let’s begin to breakdown cryptocurrency to help you understand the good things that makes it worth investing in. There are plenty of good things about cryptocurrency, some of which include:

  • The fact that it is decentralized, meaning that one doesn’t need to go through a bank to perform all of their financial obligations
  • The ease of access that the internet provides to coming into contact with and purchasing virtually any type of cryptocurrency
  • It is convenient to buy and trade, as well as meet with other investors who can give advice and allow you to view the way that they see the market

There are many excellent reasons to invest in cryptocurrency. The market is always shifting and changing, altering according to what is going on in a given day. Perhaps that’s what makes it the most exciting for those who put money into investing in cryptocurrencies. You never know what you are going to get.

Disadvantages of Investing in Cryptocurrency

There are also bad things about investing in cryptocurrency, all across the board. These can affect your future with cryptocurrencies, and perhaps the general future of cryptocurrencies all over the world.

Some of the biggest setbacks that exist within the world of cryptocurrencies include:

  • Their ability to be hacked online, which still happens despite the raised security and privacy that trading and dealing with cryptocurrencies allows
  • It may never become a widely accepted form of payment, and thus continue to float around on the market for a long time to come
  • The black-market aspect of cryptocurrency may become too much for this world to handle
  • Nobody knows what is going to happen, no matter how much knowledge they have about cryptocurrency

These setbacks can certainly have an impact on the future of cryptocurrencies. The only way we can truly know what will happen is by watching and observing.

What Does the Future Hold for Cryptocurrency?

The future of cryptocurrencies is up for speculation in many circles of investors. Some say it will eventually merge into society as a format of actual currency. Others reveal that they believe that it will eventually die out and fade away as if nothing happened in the first place. Many mixed opinions are floating around the world.

There are so many things that could happen with the future of cryptocurrencies. The way that we trade and accept business could be altered if the coins are pushed into the market. The government could find a way to incorporate regulations that could destroy the industry before it starts. Cryptocurrency could stay in this confused state for an indefinite amount of time.

Though the future is up for debate, it is worth it to invest in cryptocurrency. The unknown comes with the potential for something great to happen. It is possible that years down the line, everybody will have access to cryptocurrency and understand it. Though there are risks involved, if you are going to follow your investments, this is a good place to start.

Sources Used:

https://www.fool.com/investing/2021/06/03/2-reasons-to-invest-in-ethereum-and-1-reason-not-t/

https://www.investopedia.com/terms/b/blockchain.asp

 

Jonathan hung, Angel Investor About the Author

Jonathan Hung is one of the most active angel investors in Southern California, his mission is to drive value creation within each portfolio company. In support of this mission, he serves as Co-Managing Partner at – Unicorn Venture Partners.

Jonathan and his team target investments in US companies that have global market potential with a focus on long-term growth expansion to East Asian markets.

Jonathan developed his investing prowess as a Managing Member for his family office fund, J Heart Ventures, which made investments in start-up companies such as Gyft, ChowNow, Miso Robotics, Clover Health, Bitmain, to name a few startups he funded.

Jonathan has various degrees from the University of Southern California, London School of Economics, Massachusetts Institute of Technology, and The Wharton School at the University of Pennsylvania.