Why Should Everyone Own Cryptocurrency?
When cryptocurrencies first emerged, they were widely dismissed as a fad by the financial press. Investors who refuse to acknowledge the realities of the 2020s and make the necessary adjustments to their portfolios will be included in the cold. Now many online platforms provide the facility to buy and sell cryptocurrencies. Briansclub is one of them.
Adoption in the Mainstream
The growing mainstreaming of several of the blue-chip cryptocurrencies like Bitcoin (BTC) and Ethereum's cryptocurrency, known as ether (ETH), is something that investors who believe in the power of long trends should pay special attention to, even though some may see this as the weakest point.
In particular, some of the world's largest and most forward-thinking corporations are making massive cryptocurrency purchases: Tesla, an S&P 500 company and one of the most valuable publicly listed firms in the United States, invested $1.5 billion in Bitcoin in February.
As of late February, digital payments startup Square (SQ) had invested $170 million in Bitcoin, reflecting the business's desire to diversify its portfolio.
In addition, Coinbase, the biggest cryptocurrency exchange, is going public with a value of approximately $100 billion. CME Group (CME), the largest derivatives exchange in the world, started trading Bitcoin futures in late 2017. Only last month did it start trading ether futures. Ether's market capitalization is second only to Bitcoin's.
Compared to the overall fiat currency market that might be converted to cryptocurrencies, it is a pittance. For example, Apple (AAPL) would have to invest more than 10 times Tesla's record-setting $1.5 billion acquisition of Bitcoin if it were to invest only 10% of its wealth in Bitcoin. On top of that, corporations throughout the globe, not just in the United States, are sitting on a total of trillions of dollars in idle cash.
The Use of Cryptocurrency as a Hedge
NanoGlobals was founded by Patrick Ward, a former employee of Wedbush Securities. Wedbush was one of the first clearing houses to provide Bitcoin futures. He claims that many in the Wall Street community still see Bitcoin as little more than a speculative luxury in 2018. CEO of JPMorgan Chase & Co. (JPM), Jamie Dimon, notoriously called it a hoax that year, adding, "if you're dumb enough to purchase it, you'll pay the price for it one day."
The rationale for crypto in a personal portfolio, Ward argues, is straightforward in light of current market conditions: diversity.
To its credit, Bitcoin has managed to catch investor interest for the same reason that "safe haven" assets like gold and bonds did during times of uncertainty, as Ward puts it. "Beyond its newly acquired position as a counterbalance to equities," writes the Wall Street Journal, "in the near term, Bitcoin helps prevent too much exposure to U.S. currency for conservative investors who are used to maintaining a substantial percentage of their portfolio in cash."
Reducing Confidence in Institutions and Governments
Blockchain-based currencies have lasting strength due to more than simply a swelling chorus of corporate endorsement. Individual investors may protect themselves against a risk related to their faith in governments and financial institutions by diversifying their holdings with digital currencies such as Bitcoin and Ethereum.
Investing in Bitcoin and Ethereum, says Maria Paula Fernandez, an advisor to the board of directors at Golem Network, a decentralized cloud computing network, is a natural way to reduce reliance on corrupt governments and institutions that have failed to safeguard the public and safeguard individuals from the vulnerability of traditional financial systems.
A Deterministic Resource
Digital currencies are assets that have never existed before in the history of the financial system. The most analogous historical asset class to Bitcoin are commodities, and more specifically, gold, which is both rare and highly sought after by people all over the world.
In an interview with CNBC, Daniel Polotsky, CEO and co-founder of CoinFlip, the world's largest Bitcoin ATM operator, said that the argument for Bitcoin is stronger than ever because of the extraordinary expansion in the U.S. money supply and the growing interest among corporations in Bitcoin.
Because of this combination, as Polotsky puts it, "a compelling use-case for cryptocurrencies has been built, particularly around Bitcoin's deflationary feature, as there will only be 21 million." Nineteen million of the twenty-one million are already in existence.
The total amount of proved reserves on Earth is constantly susceptible to change and new mineral discoveries, even though natural commodities like gold, silver, copper, and palladium are likewise restricted in number. Bitcoin has a fixed maximum supply and a predetermined new generation pace that is halved approximately every four years.
The world has never seen something like this before. Additionally, Bitcoin is one-of-a-kind, not just in the past but also in the future.
"Since the blockchain has no single point of failure, blockchain and Bitcoin will survive as long as someone keeps a record and maintains consensus," explains Polotsky. Nothing is certain in this world, but Bitcoin will be there long after humanity has gone.
The Bottom Line
Simply said, there are a number of reasons why high-quality cryptocurrencies like Bitcoin are, in fact, less dangerous than other asset types. This asset is one of a kind due to its clearly defined scarcity and a modest rise in supply over time and its inherent hedge-like properties, which give insulation against absolute government control.
When you consider that traditional hedging assets like gold are losing their effectiveness—in 2022, gold is down year to date despite a new $1.9 trillion stimulus package on the way and rising asset classes across the rest of the market—clear it's that any individual investor without exposure to high-quality cryptocurrencies is missing out.
You should not undervalue the value of a 1% hedge on your portfolio just because you are willing to invest only 1% in something like Bitcoin.
The most innovative and profitable public firms in recent years, such as Tesla and Square, are operating accordingly. As soon as common investors realize this, they will be able to feel secure knowing they have made their portfolios stronger.
The daring step is not to adapt to this new terrain but to refuse to recognize its existence. To adopt cryptocurrencies, go to briansclub and buy/sell your favorite tokens.
