Is it Time to Take another look at Holding Cryptocurrencies?

At the time of writing, Bitcoin was approaching a new a lot of $20, 000 USD per bitcoin. What has changed since the last time this high was reached?

Covid Crazy

The Covid19 situation has changed the way people do many things. Technology has been push into the front of daily life. Things that used to be done physically are now being pushed into the virtual world — education and learning, eating in restaurants, entertainment, work and the purchasing of many goods and services. The natural fit to this kind of agenda is using cryptocurrencies. Why? They are an off shoot of the technologically driven world. They also can be used for competition to the existing financial system at a potentially cheaper.

Acceptance

The last time Bitcoin reached its record high, many institutions were demonizing cryptocurrencies as methods of payment employed by criminals for terrorism, money laundering and illicit drug sales. At this time, Mastercard and Visa are linking cryptocurrencies to their credit cards, and Paypal is now accepting Bitcoin to be suited for its platform. Many governments are talking about giving cryptocurrency versions of their traditional stock markets. There was also a push from Facebook joined with major banks and other institutions to issue a cryptocurrency called Libra which did not go very far but the purpose is there. Cryptocurrencies are not for criminals any more unless the aforementioned institutions are doing the offenses. bitcoin to visa

Adopting

The key for any technology is widespread or mass adopting. The more people use something, the more demand there is for its use and the more important it will become. With widespread adopting, the systems working in conjunction with the product also set out to change. Look at the Apple ipod device, Microsof company Windows, providers of the internet, and electric cars as examples. With new demand will come new industries and piggy back products that were a lot of useful without the adopting of the original product.

Vulnerability of Traditional Investments

Due to the Covid scenario and the depression that is unfolding, investment in stocks and bonds is becoming very costly and carries higher risk since the underlying economy is shut off from the performance of these markets. The high debt level makes real estate investment riskier than in the past as well as the volatility of rental income and people’s ability to pay for their mortgages. Cash is a safe destination but rising debt and inflation prospects mean that cash has risk as well. The concept of diversity means that these investments should be held to some extent, but there is now a longing for an asset that complements these products. This new asset is cryptocurrencies. This product allows for diversity from excessive debt, currency debasement, and high inflation.

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