• Friday, March 01, 2024
businessday logo

BusinessDay

Investing in cryptocurrency for the future of business

E1389103-1E71-469B-900A-6F142EE42315

When it comes to future-proofing your business, blockchain technology-powered

Cryptocurrencies are basically a way for modern people and businesses to capitalize on the disruptive and slippery technological landscape of the 21st century.

However, as new investment opportunities with attractive investment returns attract investors’ attention, it is important to identify which cryptocurrencies have good growth prospects.

Until now, the Internet with Web 1 and Web 2 was primarily intended to democratize information. But now, Web 3 in particular has added a value component, and Ethereum, a decentralized platform based on blockchain technology, offers huge opportunities for investors. When looking at the cryptocurrency landscape as an investment opportunity, whether investing for capital gains like Ethereum or Bitcoin, or investing in cash flow producing assets in the DeFi sector, the Web 3 opportunity provides excellent long-term prospects.

As decentralized finance continues to redefine today’s financial industry and transform the role of banks, the crypto market offers interesting diversification opportunities for asset allocation as it is fundamentally different from traditional asset classes.

The virtual currency market was booming until 2017, but since the bubble, the participation of institutional investors has increased and the market has become relatively stable. The cryptocurrency market is currently viewed by many investors as an alternative asset class, often referred to as digital currencies.

Therefore, the fundamental differences in the cryptocurrency market compared to traditional asset classes are attractive for diversification from an asset allocation perspective. Longer investment horizons also allow investors to directly measure diversification benefits through portfolio performance, rather than observing asset correlations and other characteristics as indirect measures of potential diversification benefits.

However, it should be noted that cryptocurrencies can be vulnerable as overall market liquidity is still very low compared to established investment funds such as stocks and bonds. However, the good news is that cryptocurrencies can be traded 24 hours a day, including weekends, so you can liquidate them in an emergency. When the market panics, price fluctuations increase. It’s very unlikely that all markets, from stocks to bonds, real estate, currencies, valuables, etc., will bottom at the same time, so as you diversify your investments, you could be at lower risk for dramatic losses.