The dawn of digital technology brought a new way of accepting payment in the world of currency without the need of transacting with real money nor the need to negotiate with the bank. This is cryptocurrency!
We have seen a lot of wonderful breakthroughs and innovations in the digital currency. People continue to be positive about the use of digital currency. What if we were to ask you, what is your take on cryptocurrency? Will you be willing to take the chance in putting your money in this new age currency?
As the year ends, we know that cryptocurrency remains to be strong. Let us see what this expert’s crypto recommendation is.
The Only Cryptocurrency I’d Consider Buying
As we look back on 2017, it’ll likely be remembered by investors as the year of the cryptocurrency.
Prior to the advent of virtual currencies, the stock market had been the undisputed king of consistent wealth creation, unless you were lucky enough to defy the odds and win the lottery. The 7% annual returns from the stock market, inclusive of dividend reinvestment, provided a rough doubling of your invested capital about once a decade.
But since the year began, we’ve witnessed the aggregate value of all cryptocurrencies rise from a market cap of $17.7 billion to $248 billion as of Nov. 22, 2017. That’s about a 1,300% gain in less than 11 months. The stock market would take decades to match this type of return, and it’s rightly put virtual currencies like bitcoin, Ethereum, bitcoin cash, Ripple, Dash, LiteCoin, and Monero — to name a few — on investors’ radars.
Four reasons 2017 belongs to virtual currencies
The catalysts behind the rise in virtual currencies appear to be a mixture of four tangible and intangible factors.
First, we’re seeing clear excitement about the future of blockchain technology. Blockchain is the digital decentralized ledger that underlies virtual currencies and records transactions without the need for a financial intermediary. This burgeoning technology makes altering logged data practically impossible since most blockchains are open-source networks. This added level of security, along with the ability to settle transactions in real time, could make blockchain an attractive technology for the financial services industry.
Second, weakness in the U.S. dollar throughout much of the year has sent some investors scurrying to cryptocurrencies. When the dollar weakens, it devalues the cash that investors may be holding on to. Traditionally, investors would seek to deploy some of this cash into gold, as gold has been used as a currency for centuries, and its scarcity makes it a suitable store of value. However, with some digital currencies, like bitcoin, having a cap on the number of coins that can be mined, they are also viewed as scarce and thus perceived to be a store of value.
News-driven events have served as a broad third catalyst. Announcements like Japan accepting bitcoin as legal tender and 200 companies in the Enterprise Ethereum Alliancetesting out a version of Ethereum’s blockchain in small-scale and pilot programs help validate the existence of virtual currencies.