Why Do People Buy Cryptocurrencies?
Unless you have been living under a rock for the past few years, you have heard about wildly popular cryptocurrencies. As a digital currency and not something that physically exists, many people wonder what is so popular about buying them. You’ve heard about its high highs and low lows, but what exactly are cryptocurrencies and why are people buying them? Keep reading to learn more about why people buy cryptocurrencies and decide if it’s a good investment for you.
Why Do People Buy Cryptocurrencies: The Three Main Reasons
A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.
Cryptocurrency has its fair share of downsides, such as insecure storage, the nonexistent barrier to entry, and questionable scarcity myths. Some people believe there is no real-world application for them, and the tax situation may not be worth the effort to invest in them. However, there are three main reasons why many people do decide to buy cryptocurrencies: you can trade them anytime, they have volatility and excitement, and you can go long or go short.
You Can Trade Cryptocurrencies Anytime, Anywhere
As mentioned, there is no centralized governance of the cryptocurrency market. This means you can buy and sell cryptocurrency anytime, anywhere. On cryptocurrency exchanges, you buy and sell cryptocurrency between individuals.
There are periods of time when exchange platforms may be down due to adjustments, updates, or forks. A cryptocurrency fork is an update to the software governing the distributed network that makes existing rules either valid or invalid — sometimes resulting in spinoff versions of Bitcoin.
This is a huge difference to trading hours for the stock market. Regular trading hours for the U.S. stock market, including the New York Stock Exchange (NYSE) and the Nasdaq Stock Market (Nasdaq), are 9:30 a.m. to 4 p.m. Eastern time on weekdays (except stock market holidays). On early-closure days, typically right before or right after a market holiday, regular stock trading ends at 1 p.m. ET. This means that if you would like to buy or sell on these markets, you have to wait until the stock market opens again. There are ways to trade during off-hours, but cryptocurrencies allow you to do as you please.
Volatility and Excitement
Volatility in financial markets refers to changes in the price of an asset. It can be healthy, with steady increases or decreases in price within a general range. It can also be extreme, with sudden price movements in either direction. Volatility is what allows for profit, and the opportunity to buy, sell or short a stock.
The cryptocurrency market’s volatility is unlike any other. There are very high highs and very low lows happening at a quicker pace than in other markets. This allows for plenty of excitement and opportunity for huge profit when investing in cryptocurrency. However, it does mean that you should have a risk management plan in place.
Go Long or Go Short
When buying cryptocurrency, you are purchasing an asset. Just like with any other asset investment such as gold, a house, or fine art, you are hoping that it goes up in value so that you can sell it at a profit. This gives you the perfect opportunity to either go long or go short with your investment. Here are some definitions to help you learn the difference between going short, going long, and what might be best for you.
- Going long: Going long on a stock or bond is the more conventional investing practice in the capital markets, The investor purchases an asset and owns it with the expectation that the price is going to rise.
- Going short: Short selling occurs when an investor borrows a security and sells it on the open market, planning to buy it back later for less money. Short-sellers bet on, and profit from, a drop in a security’s price.
About Priority Gold
Although cryptocurrency trading is relatively new, it is an exciting market with the potential for great profit. If you are looking for a great investment, a crypto IRA might be perfect for you. Priority Gold is one of the most trusted cryptocurrency and precious metals dealers in the United States with BBB A+ Rating, AAA Rating with Business Consumer Alliance, and 5 Stars Rating with TrustLink.
We specialize in providing precious metals investment services with Security, Liability, and Great Convenience for customers. Our team is committed to helping to streamline their cryptocurrency purchases at a fair price, selecting the right precious metals portfolios, and meeting their important financial objectives.
For more information, visit us at prioritygold.com