Cryptocurrency investment has been with us for a fairly short time in the grand scheme of things, but there is no doubt it has stood the test of time far better than some have predicted.
For example, seven years ago, the Financial Times published an article under the headline: “What next after cryptocurrency bubble bursts?”
The idea that crypto was a fad was popular in those days, but few would make such a claim now.
Indeed, it may be observed that those who have changed position on this include Donald Trump, who was dismissive of crypto in his first term, but switched to a position of fulsome enthusiasm before his second, with policies to match.
That alone has been a game-changer for crypto and governments around the world have been working on their own responses, as the need to regulate it well and take advantage of economic opportunities can no longer be denied.
Having established that crypto is not a ‘bubble’ and is here to stay, the question arises of who should be investing in it and how they should go about it.
Who Do The Experts Think Should Invest In Crypto?
This question was recently examined by Go Banking Rates, which tapped into the expertise of financial advisors for an answer. They came up with several characteristics of what they believed the ‘right’ kind of person to invest in crypto is:
· Someone willing to accept a high level of risk, including potentially large losses
· Someone who is calm and uses logic, not emotion
· Long-term investors who can handle large fluctuations in value
· People who can afford the consequences of a big loss, rather than someone seeking a safe haven for their life savings
· Tech-savvy people who can spot opportunities before others do
In addition, one expert, University of Boston Blockchain lecturer Anne Connelly, said everyone, even the most cautious of investors, should have at least a small investment in cryptocurrency.
She explained: “Understanding how it works and how it will change global payments is critical to being able to see its future potential.”
How Do Crypto To Fiat Payment Cards Change The Nature Of Crypto Investment?
What was not reflected in the answers given was the significance of some investors owning a crypto-to-fiat payment card.
Having such a card enables those who have successfully built up their crypto investment to convert it directly into the currency of the jurisdiction they are visiting, doing so instantly and without any money exchange fees.
This has some obvious benefits right away in terms of the convenience it gives people as they travel, but it also solves the problem that previously dogged crypto investors, which is how to cash in their wealth after making a successful investment.
Previously, very few vendors would accept crypto payments, with most of those that did so being in luxury markets for things like jewellery, cars or top-end hotels. To be able to convert crypto for everyday spending is a quantum leap forward.
This does not invalidate what the financial advisors told Go Banking Rates; for example, the issue of volatility and the benefits of being able to spot an opportunity early are still real, but it places them in context.
For example, the truth that you shouldn’t put all your life savings into crypto may still be true, but if you intend to use a card to spend the crypto you have, then by definition, the investment aim is to increase your spending power today, not build a nest egg.
It also means that while crypto values can indeed fluctuate wildly, you may take the view that when the value of your investment is high, it makes sense to spend on it and get the benefit before any downturn occurs.
Why Is Crypto No Longer Just About Investment?
In effect, what a crypto card does is make what was a very illiquid asset into a very liquid one.
That doesn’t rebut the insight that being ahead of the curve when making investments is a key skill to have. Rather, it strengthens it, as it means that not only does it help you make good investment decisions, but also work out when to spend it.
In a nutshell, cryptocurrency is no longer simply an investment. Thanks to our crypto card, the ‘currency’ element of it, while more volatile than fiat currencies, now has more power to be used in the same way to buy goods and services.
This means that Cryptocurrency is less about trying to build up enduring wealth through assets that can remain reliably valuable over the long term, or through all the peaks and troughs of the market, but more about smart investments you can cash in on easily.