In this digital age, Cryptocurrency is all the rage for investors and online traders alike. In case you missed the 101 class about these digital currencies, crypto simply refers to a digital form of payment that can be used to purchase products, services, or other currencies.
Even though the phenomenon is still new to a considerable number of people, cryptocurrency is increasingly being embraced as a mode of payment by many businesses that offer goods and services online. This is in part because, for starters, it uses a technology that is more reliable in terms of security (cryptography), as well as anonymity, and immense reliability.
In addition to popular Cryptocurrencies like Bitcoin, Litecoin, Ethereum, and Ripple, there are more than 2000 different types of cryptocurrency, with their value totaling up to almost $250 billion as of 2019. This makes it a wide market that aggressive investors can explore and tap into. And due to the numerous benefits the cryptocurrency market promises to offer, more and more people are using crypto as a means of saving money for future investments as well as unexpected expenses or needs that could crop up in the future.
You never know, you could be – God forbid – hit by a truck or involved in an accident that ends up running all income sources dry due to hospital bills, medication, and post-treatment care costs, among other things. According to Gregg Anderson from Terry Bryant Injury Law, it is crucial to know the next steps you should take in such a case, including getting medical attention and hiring an accident attorney to help get you compensated. And depending on the severity of your injuries, you may have to pay for your medical expenses first before the insurance company can pay for your damages. This means that having a significant amount of money stashed somewhere can be lifesaving.
But then again, what should motivate anyone to use cryptocurrency as a mode of savings, especially considering that crypto is still a new thing that some may think of as riskier than other investment options? Well, here are some reasons why crypto is the perfect way to save for a rainy day.
1. Crypto Has Shown an Upward Trend
Since the inception of Bitcoin and similar digital currencies (over a decade ago), the direction of crypto with regards to value has been up, up, and up in terms of value! This is perhaps the strongest driving force for people to invest heavily in Cryptocurrencies. If we take Bitcoin, for instance, one coin was worth just a penny or less in its first few days after birth. But the value has since grown to tens of thousands of dollars as the currency learned to crawl, stand, walk with the wall, and walk on its two feet. And at a few thousand dollars now, we can also agree that the currency is flying!
The same has also been observed for other major crypto coins and in other words, cryptocurrency is a great long-term savings option since as far as the past several years are concerned, since all it has shown is an upward trend, of course, with slight fluctuations over short-term durations. It’s a great way to preserve your money’s buying power, which brings us to the next important point… Inflation!
2. It’s Not Prone to Inflation
What a $100 bill could buy ten years back is not the same as what the same amount can buy you today. You’ll get much less today compared to what you could buy with the same amount of money a few years back. This is what inflation is, a phenomenon where currencies lose value or their purchasing power decreases over time. It happens to all the major paper currencies in the world of today. But as described in the previous pointer, digital currencies are taking a different course. They’re almost always appreciating in value instead of depreciating, meaning that they aren’t prone to inflation. This is because unlike conventional currencies, these digital currencies aren’t controlled by any central bank. It also means that if you buy a $1000 worth of Bitcoin today, your coin will likely be worth more by a few hundred or thousands several years or even months down the line.
3. The Opportunity to Trade
The other good thing with Cryptocurrencies is that they not only let you buy products or services, but they can also be traded for profit. Today, there are several Cryptocurrency trading platforms and just like one can profit from speculations in the forex market, so can they profit from the cryptocurrency exchange market. In other words, if you have a few coins saved for a rainy day, you can also tap into a portion of your savings to earn some extra passive income from trading crypto.
4. Your Money Is Always Secure
Another intriguing factor about crypto, as earlier hinted in the introduction, is the level of security offered by the blockchain technology. In a layman’s language, blockchain technology is simply the record-keeping technology used for transactions involving cryptocurrency. Thanks to this technology, crypto transactions are more secure than conventional payment systems. This is because they take place through a process with a high level of encryption so a fraudster or hacker can never gain access to your money or hack your virtual account. In addition to preventing identity theft and blocking away fraudsters, the tech also allows you to transact anonymously. And unlike in traditional payment systems, all third-party entities can see regarding your transaction is the encrypted wallet addresses used, no personal data or sensitive information. This means that even if your rainy day involves getting in trouble with really bad guys, you can easily get yourself out of the mess without necessarily raising any eyebrows.
5. Easy Accessibility
Another reason why the demand for cryptocurrency is ever-growing is its ease of use. With just a smart device and an internet connection, you can conduct as many transactions as you like with cryptocurrency. And once coins have been mined or sent to you, they’re always available on the public blockchain, which you can access and provided you have the credentials needed to access it. The best part is that in a situation where you don’t have the right to access traditional currency exchange or payment systems, crypto will always be a viable option.
Nothing is more important than saving for a rainy day, and this is not something new even to a fifth-grader. But due to factors such as identity theft, fraud, inflation, and accessibility issues, many people shy away from putting their savings in conventional bank accounts. If this sounds anything like you, the above few pointers should be enough to motivate you to consider putting your savings in crypto.