The cryptocurrency market has grown by leaps and bounds over the past two yearsCryptocurrency has transformed from a fringe curiosity to a mainstream trading medium within a very short time.
Bitcoin, the world's first cryptocurrency, was launched in January 2009, shortly after the financial crisis rattled markets globally.
It took it a decade to become one of the most sought-after digital assets.
While it remained in oblivion for the most part of that decade, its sudden rise led several such coins to flourish.
A primary reason for their rise was the promise of almost vertical returns.
It's no surprise then that investors flock to these new digital assets to gain a foothold quickly.But the question still remains: Should one invest in digital assets? Put another way.
Why should people invest in digital assets like Bitcoin or any other crypto coin? These coins are extremely volatile as quickly as they rise, they drop far more rapidly.
Since these operate online, what safety features will protect an investor's money?True, most of these digital assets are volatile.
Experts say as they grow and gain acceptance and more people begin to trade in or with these coins, they will gain stability, just like stock markets.
But what about safety? The cryptocurrency world operates on blockchain technology, which is new and many people are still not versed with it.However, tech experts say the technology is very democratic in its approach and completely safe to use.
It is based on the idea of a digital distributed ledger, meaning anyone can see any transaction at any time from anywhere.
Every transaction is stored in the form of data on the blockchain and nobody can fiddle with it.There are certain benefits of investing in them as well:1.
Booming SectorOver the past two years, the cryptocurrency market has grown by leaps and bounds.
For instance, at the end of 2019, Bitcoin's price was a little over $7,000 (roughly Rs.
5.18 lakhs), but today it is trading above $45,000 (roughly Rs.
33.34 lakhs).
It had touched a value above $60,000 (roughly Rs.
44.46 lakhs) both in February and April this year.2.
Digital EcosystemNot just cryptocurrency, but a whole new digital ecosystem is taking shape in the post-pandemic world.
Besides cryptocurrency, there are NFTs or non-fungible tokens.
Also, instead of directly investing in crypto coins, techies are also getting involved with the process of generating these coins, called mining, and earning a decent income.3.
Impressive ReturnsCryptocurrency gives one the best returns, only matched by the realty sector.
Unlike the realty sector, investing in digital assets does not require you to invest a big amount.
You can break your investments into several pieces.4.
Passive IncomeInvesting in digital assets and online businesses is a good way to earn a passive income.
You can carry on with it alongside your regular investments and money will accumulate in your account through a constant income without breaking much sweat.