One of the most strange reasons why some choose not to invest in crypto is due to its volatility. You may be asking why is that strange, no one wants to lose money right? However it’s a fact that precisely for that same reason, it enables us to make tremendous profit too. So I would ask why invest in anything at all if you are concerned about loss based on that logic?
The next usual quick response is well Crypto is too risky, however another odd response as everything has risk. What is critically missing in the argument is the rational method and reasoning fundamentally why you are investing in the first place. Most presumptions people have are those that are told to them through the corporate media.
Typically we hear on main stream media a plethora of propaganda orchestrated by a bias financier that has an extraordinary level of conflicts of interest. This is due to the fact many institutional hedge funds or smart money has already invested into the current establishment and need business as usual to expect a return on their investment.
It is also the main reason for the bizarre statements we frequently get then subsequently actions that contradict each other. A good example of this is CEO of JP Morgan’s odd statements on crypto yet they have invested a substantial sum into crypto. Also might I add the returns they have already achieved investing in crypto that they have declared quietly to clearly avoid more positive publicity on crypto. It’s a fact in 2021 Bitcoin was their largest asset return of investment.
So now we covered the obvious that we all intuitively knew already due to the nature of the economy and the corruption involved. Let’s now dive into the reasons why we should invest in anything at all putting aside crypto for now. If the objective to investing is to make or increase value then the first point of call is to research what makes that investment valuable to begin with.
So for example what is valuable about the precious metal gold? Well it’s rare and is required for use on anything that needs high conductivity of electricity. As the market for electronics grows so does demand. Therefore the scarcity of gold and the continued demand gives gold a good start on fundamentals to invest in it. However as gold is a dense material it’s very heavy and challenging to store or hold on to and not practical to transport. Also there are still many parts of the globe that has gold that has not been mined yet therefore increased supply is likely.
So although the utility demand for gold looks good it doesn’t appear it’s continued scarcity seems likely and impractical to trade or transport therefore has further overheads or costs to consider. The next important area to research to fully consider it’s value is it’s lifecycle. Is it a fad that will last a month or is it a necessity that will be needed for 100 years?
So using the asset gold as an example, will we need to use gold for electronics or are there alternatives for its utility? The answer is yes, we use fibre optic cables and lasers to transmit energy and light. The likelihood of future developments in other technologies that reduces gold usage very likely. We are also seeing the emergence of bio synthetic material that is more efficient in transmitting electricity too.
Therefore is gold a good investment in the next 5 years? possibly but in 10 years probably not. So now we have covered the fundamentals of why you should invest at all, I’m sure you are now asking why invest in crypto? There are many reasons that I can’t possibly cover all in this article and it depends on the specific cryptocurrency too. Bitcoin the most famous crypto for example has two core reasons. The first being that it is a decentralised ledger therefore corruption proof with blockchain technology whereby protocol in built in the system rather than reliant on individuals that can be bias.
The 2nd being that it has deflationary properties as it has max supply of 21 million BTC, this inherently means more scarcity over time. Plus our current fiat currency such as the dollar has infinite inflation therefore amplifying the value or scarcity proportionally of Bitcoin over time.
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