4 Reasons Why It’s A Good Time To Move Your Investments From Stocks To Crypto
After the spread of covid-19 globally, markets across the world are facing high volatility across all assets. One of the most popular investment options in the world, stocks, is widely affected. It is time for cryptocurrency to become a timely alternative investment option according to the current situation.
1. Stocks may be affected from the economic damage but crypto is not
The global pandemic has left a lasting impact across all sectors of the economy. Recently, the IMF has estimated a 3% contraction of the global GDP . Poor economic conditions have affected public companies and their stocks significantly. Only a few Industries and sectors are left with a bit more hope than the rest, which means considering stock options now has been made a lot more difficult.
2. Covid-19 may actually have a positive impact on digital assets
The fact that most of the world’s population is practicing social distancing simply means that online transactions will and have increased dramatically, including digital payments to the point where digital currencies are now accepted by big financial institutions including BIS and Deutsche Bank. Both corporations have embraced digital currency and have made statements. Covid-19 will stimulate spending of digital currency, benefiting investments in cryptocurrencies.
3. Investing long-term in a crypto portfolio may earn you more than a stock portfolio
Many central banks around the world are coming out with policies to stimulate the economy which means returns from bank savings will decrease as well as interest from stock portfolios which average around 1%.
There is a commonly used investment method called Dollar Cost Averaging which can be used in stocks or crypto investments. In particular, DCA is a method of investing small amounts over regular intervals in time. It is an investment method that smoothens out the price volatility of the investment. Using dollar-cost averaging, you can reduce the average purchase price of the asset as compared to its present market price. Long-term investment in Bitcoin has shown higher gains as compared to Fixed Deposits, Mutual Funds, Stock Market, Recurring Deposits, etc. in the past years.
4. You can use Cryptocurrency for daily spending, while this is impossible with stocks
The most important factor in the current world situation is the fact that if we investall our stocks but have a sudden need for a spending allowance, selling stocks could take up to 2 days, or you could wait for dividends to be paid out — which only takes place twice a year.
Trading in digital currencies allows conversion from fiat to digital and vice versa in an instant. Digital currency Traders could also spend on a daily basis with digital currencies as there are now many applications and service providers that accept payments in cryptocurrencies, and even stores that accept Visa and MasterCard, or simply vendors who directly accept digital currencies, and of course, digital asset platforms who offer services to convert crypto to fiat for merchant partners.
However, all investments come with high risks. Investors must always study all relevant factors, and not just opportunities and returns.
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