In recent years, crypto has become a global trend, although much is yet to be discovered about this relatively new financial technology. Many experts continue to raise concerns regarding blockchain and cryptocurrencies as well as their potential to disrupt traditional finance significantly. The phenomenal growth of Australia’s popular crypto exchange Swyftx and many others shows further that many people are gradually embracing digital currencies. Here’s why cryptocurrency may be the future of finance.
1. High returns
Over the short period of their existence, cryptocurrencies have emerged as the most profitable investment products out there for people who want to multiply their wealth. As opposed to stock investments whose highest returns hover around 20% in the USA, crypto returns can reach an incredible 100% and above. While they’re seen as high-risk investments, many people are taking advantage of crypto’s price volatility to make massive gains. The high rate of return on investment is one key factor that’ll keep luring investors to buy into the idea of Bitcoin.
2. Decentralized finance
Another obvious benefit of crypto is that they’re decentralized digital currencies, which means governments and central banks don’t regulate cryptocurrencies. Because they’re free from government interference, many people are prompted to invest in crypto for their own good reasons. Crypto gives people from all parts of the world a chance to invest, and that includes people from sanction-hit nations whose currencies suffer a depreciation. It’s easier to move large sums of money overseas within a short time using crypto and its decentralized nature makes it especially attractive to people who want to stay anonymous.
3. Stable coins
Stable coins were introduced to back cryptocurrencies with assets that store real value, like gold. Cryptocurrencies’ future in the financial ecosystem is not very much clear; while some investors see endless wealth-creation possibilities with crypto, crypto critics like Warren Buffet point to risks. One strong argument in favor of crypto is that it helps people in countries with weaker currencies to invest in Bitcoin instead of buying local stocks and bonds. Another primary concern about crypto is that they make it easier for people to commit fraud due to the lack of monitoring and auditing.
4. Crypto can replace cash one day
The quest for a cashless global economy couldn’t have come at any other suitable time than now. As reported by Deutsche Bank, the existing money system is somewhat fragile. Deutsche Bank predicts that by 2030, crypto users will soar to more than 200 million users. This massive growth of crypto is synonymous with that of the internet in its first two decades of existence. Cryptocurrencies can replace cash one day as the demand for decentralized payment systems grows further.
Crypto regulation may not be far from being a reality in the coming years, but when regulatory hurdles are overcome, crypto may officially become substitutes for fiat currencies. Bear in mind however that governments won’t want to lose control of the money supply chain.