Back in the year 2008, a global economic catastrophe brought the world economy to its knees and completely toppled the trust of investors from the centralized financial system. Greedy capitalism had made the entire world pay and it was a great time for something as unprecedented as a new concept that puts back the control of money in your own hands to evolve. That’s what the white-paper that was written by Satoshi Nakamoto, the father of decentralization and cryptocurrencies brought for the world. There was a significant turn-around in the way people had started seeing money ever since then. From ordering a pizza with more than 20,000 to 30,0000 BTC due to its low fair-market value to witnessing an exponential rise in demand of cryptocurrencies as their prices skyrocketed with people understanding its potential.
That’s what the journey of each and every cryptocurrency powered by decentralized ledger technology termed as Blockchain had been. The bullish run has certainly disrupted but the fall or rise has been rational with new adoption and innovations in their modus operandi. That’s what happened with BTC, ETH, XRP, XMR, or other cryptocurrencies. With that said, it wouldn’t be an understatement to conclude that cryptocurrency investments have flourished and after the introduction of new generations of blockchain and Bitcoin, there’s no looking back even for the future. Lately, BTC has touched even US$20,000 and similar is the case with other ALTCoins showing bullish trends. Such developments bring us to question why cryptocurrencies are going to be the next big thing in 2020 and beyond. Here are a few key reasons to support this claim.
Determinants That Make Cryptocurrencies The Next Big Thing
The returns have almost taken the market by storm. As new protocols are empowering the cryptocurrencies, there’s a huge surge in their demand. For example, a typical stock appreciates by 20% on average 20-day moving averages. But cryptocurrencies have shown unprecedented potential by touching 20X to 200X returns in top DeFi protocols like AAVE, Synthetic, and MakerDAO. Investors are looking forward to moving their funds from banks and invest in the DeFi protocols for significant returns. Such developments have pushed the demand for ETH and BTC lately. WBTC or Wrapped Bitcoin have gone in demand due to such favourable turnarounds. There’s a huge surge in Bitcoin tokenization as people are buying BTC with the credit card on a large scale to mint or swap tokens at the exchange. Alamada Research has concluded that a rise of 70% WBTC minted in August alone showcases a good investment season ahead in cryptocurrencies. As more DeFi protocols are all set to launch, the need for BTC and Ethereum is likely increasing, painting the investment market in crypto colors.
Cryptocurrencies are literally immune to global and political upheavals financially and politically. Whether you talk about the US-China trade war, Middle East unrest, falling petrol, and gold prices, or anything that affects other investment portfolios, do not affect cryptocurrencies. Such leverage makes them the best investment portfolio for investment. You can simply understand that the birth of cryptocurrencies was laid on the aftereffects of the global economic crisis where the tokens rose significantly irrespective of the market slump. Similarly, even during the prevailing CoronaVirus pandemic and anticipating the entry of other financial crises triggered by lockdowns and lack of demand, cryptocurrencies have been able to maintain the bull-run even at this time. The rise in the proportion of buying BTC with a credit card or using BTC to mint more WBTC certainly shows why cryptocurrencies have emerged as game changers of finance.
Nobody would like to have pseudo ownership of their assets. That’s what happens with the fiat when banks default, where you lose control of your own funds. That’s what happened recently with Yes Bank Limited when the owner of the bank was under question for money-laundering and showing false records or losses. As a result of that, many account holders were forced to withdraw money to a certain limit only even if they have a surplus amount in their account. Cryptocurrencies are almost different with this respect, as a result, some of the economies like Turkey, Venezuela, Zimbabwe, and African nations trust cryptos since they do not depreciate, neither they are affected by the change in the monetary policies. With that said, you have complete control of your own currencies, and no one can make it illegitimate, censored, or regulated to fulfill their own agenda. In a way, putting the entire power back to you.
Very High Liquidity
Cryptos are going to be the best investment portfolio since they offer you a very high liquidity advantage. You have the advantage of swapping them on exchanges, setting them for buy-sell orders without incurring additional brokerage or order booking charges, and opt for algorithmic booking governed by smart-contracts. These advantages ensure that you can quickly make your purchasing power multiply in no time using crypto. With the launch of non-collateralized flash loans on Defi projects, the scope of enhancing liquidity further strengthens significantly.
While investing in any portfolio, you always look for the velocity and flexibility that it could deliver. Cryptocurrencies have given that edge by allowing investments even in bits and pieces. So, anyone with a very limited budget can also invest in cryptocurrencies, trade, and make considerable profits. Juxtapose the same with real-estate or other bonds and debenture portfolios where you have a minimum threshold making them available only for elite investors.
The censorship, trustless, and decentralized nature of blockchain has paved the way for smart investment in the cryptos market. Different Defi protocols have driven the demand for cryptocurrencies like WBTC, ETH, DAI, USDT, where investors can buy BTC with a credit card, swap it on exchanges and invest in their preferred Defi protocols for fast money. It is almost similar to keeping money in the liquidity pools as investment-saving on multiple protocols, in a way that you do at the banks. The banks give you limited interest or earnings but these Defi protocols incentivize you significantly. As more top use-cases with the likes of decentralized finances or payment gateways emerge, it will further push the demand for cryptos making them a safe investment portfolio for 2020 and beyond.