Why invest in cryptocurrencies?
Why use Hodl for investing your funds in cryptocurrency? Let us start by answering the main question before thinking about whether you should use Hodl at all. Why should you invest in cryptocurrencies?
The financial world as we know it is about to transform. Confidence in the current financial system is rapidly disappearing. Central banks are printing large amounts of money. Economies have been artificially supported since the 2008 financial crisis and recent economic events have worsened the situation. A growing population is aware the current central banking system cannot continue indefinitely and thus expects a transition of the financial system.
The first cryptocurrency, Bitcoin was created exactly for this reason. It was released after the 2008 financial crisis as an alternative to the current financial system. Bitcoin is a global decentralized digital currency without a central bank or single administrator. Bitcoin can be sent via the peer-to-peer bitcoin network without the need for intermediaries. It has no inflation, is divisible in small quantities, and can be stored and used with a smartphone. Confidence in bitcoin is growing rapidly. This can be seen by the large number of companies adopting Bitcoin into their business processes.
In the last years, thousands of other cryptocurrencies with various technological use-cases such as Ethereum, Ripple, and Quant have been launched. These cryptocurrencies represent the value of the business model of the underlying blockchain. Investing in these business models offer a new form of income. They offer an excellent risk-return ratio and are a good hedge against the current monetary policy. It is a great addition to a traditional investment portfolio as a small allocation can offer returns greater than the total yield of the portfolio.