The Investment Benefits of Cryptocurrency: Does Bitcoin Have a Place in Your Portfolio?

One of the defining characteristics of cryptocurrencies is their independence from traditional banking systems. Unlike traditional fiat currencies (British Pound Sterling, United States Dollars), which are controlled by governments and central banks, cryptocurrencies are typically decentralised.

This gives users more control over their own assets, as transactions don’t have to go through an intermediary like a bank. For investors who value privacy and autonomy, this aspect of crypto can be particularly appealing.

With Bitcoin and other cryptocurrencies, you’re not limited by banking hours, geographic borders, or transaction fees imposed by traditional financial institutions. This independence gives crypto investors a level of control that’s difficult to achieve with conventional assets.

Unlike traditional investments, which often require investment accounts, minimum investment amounts, or specific qualifications, cryptocurrencies are accessible to nearly anyone with internet access. Whether you’re in London, Dubai, or a remote area in the middle of Australia, all you need is a digital wallet to get started with cryptocurrency. 

This inclusivity has made crypto an attractive option, especially for those who may feel alienated by traditional finance. 

It’s worth noting that until recently, there was a barrier to access in the form of tech knowledge, with buying and selling cryptocurrency a detailed process which required technical understanding. Now however, you can buy, sell, and trade digital assets directly from your phone or computer, making investing far more accessible.

Cryptocurrency transactions can be incredibly fast and adaptable. Transactions with Bitcoin and other cryptocurrencies can be completed within minutes, regardless of the transaction size or the locations of the sender and receiver. This speed is a significant advantage, especially for those who are used to waiting days for international bank transfers.

This might not seem like a major benefit for investors in developed nations where fast and secure payments are a normal part of financial management. But many developing countries don’t enjoy the same level of financial infrastructure, giving cryptocurrency a huge advantage.

It can also be a useful alternative payment method in countries experiencing hyperinflation and/or currency controls. While payment benefits don’t directly relate to investors, higher rates of adoption generally lead to rising prices.

The 24/7 nature of the crypto market means investors can trade any time they want. Unlike stock markets, which close at the end of each trading day, crypto markets are always open, allowing investors to react quickly to market changes and take advantage of emerging opportunities.

Cryptocurrencies are built on blockchain technology, which offers several benefits compared to traditional finance. Blockchain is known for its transparency, as transactions are recorded on a public ledger that anyone can view. 

The technology behind cryptocurrencies also allows for rapid, peer-to-peer transactions without the need for intermediaries. Innovations like smart contracts, which are self-executing contracts coded onto the blockchain, are just one example of how cryptocurrencies are pushing the boundaries of what’s possible in financial technology. 

For investors interested in modern, cutting-edge tech, investing in cryptocurrency represents an opportunity to be part of a financial system that’s constantly evolving.

We’ve buried the lede a little here, because there’s no denying that the biggest draw of investing in cryptocurrency is the potential for high returns. It’s the only real reason we’ve seen crypto go from a fringe interest to hitting the mainstream.

Since 2010, Bitcoin has grown from $0.09 to an all-time high of $73,835 in March 2024. While crypto’s volatility (as discussed in our risks article) can lead to significant losses, it also creates opportunities for high returns that are difficult to achieve with traditional assets.

Of course, it’s essential to approach this benefit with caution. While some investors have profited from crypto’s growth, others have faced large losses. For those willing to accept the risk, however, the potential for high returns makes crypto a compelling addition to a diversified investment strategy.