Reasons why your Business Should have Cryptocurrency Investments
In late 2020 and early 2021, Bitcoin’s price spiraled to heights never reached before. This price increase was echoed throughout the crypto industry, especially in dominant digital currencies like Ethereum and Dogecoin.
Some quickly took profits and showed them off on social media. On networks like Twitter, crypto enthusiasts posted about their lives being changed. Some bet on NBA odds for fun, and others talked about paying off student loan debts.
The swift increase in price drew several investors to the crypto market. Up till the time of this article, Bitcoin has dipped from its all-time high price. New crypto enthusiasts that bought at the top felt unsure about the viability of virtual currency as an investment. Some couldn’t handle the dip and sold the minute the crypto market capitalization started dropping.
Nevertheless, digital currencies have permeated the mainstream market. The decentralization concept that crypto imbibes has attracted several firms to add it as a payment option. At least 2,300 US companies accept Bitcoin as a form of payment.
This article will reveal the key reasons your business should invest in crypto.
Top Reasons why your Firm Should Possess Crypto
Here are some reasons why firms should possess crypto:
Hedge Against Inflation
One of the reasons Bitcoin was created is the massive currency inflation experienced in several countries, including the US. Bitcoin and other fixed-supply cryptos cannot experience inflation since new currency units cannot just be introduced to the economy.
For instance, if your firm is in the gambling industry like BetUS and handles business across international borders, accepting a currency that gets hit by inflation reduces its value. On the other hand, if you utilize crypto payments, you’d avoid inflation.
A New Payment Method
Several individuals are interested in cryptocurrency. When your company incorporates crypto into its liquidity plans, it will be able to receive and send crypto payments. This way, there’d be an increased variety of options that customers can choose from.
Cryptocurrency investments can be held long-term since they’re not exposed to government influence. During the 2008 global financial crisis, currencies decreased in value, banks closed down, and some nations experienced hyperinflation.
Bitcoin and other cryptocurrencies are looked upon as truly global, being free of any government affiliation. If the financial system breaks down again, holding cryptocurrency would benefit your business.
Transparency of Transactions
Cryptocurrency is by far the most transparent form of money. Anytime a transaction is made, it can be audited and checked on the blockchain, which is a public ledger.
The transactions are also immutable, making the records highly verifiable. If your business uses cryptocurrency, it will gain a reputation for being transparent in its dealings.
Reduced Transaction Expenses
Typically, banks levy expenses and fees on digital payments made by your company. While it is true that these fees are needed for the bank to seamlessly continue operations and make a profit, it reduces your firm’s cash inflow.
Digital currencies, on the other hand, are not handled by intermediaries. All the payments are peer-to-peer, meaning that financial institutions like the banks get cut off. This translates to significantly lower expenses on transactions made for your business.
A finance manager’s job is divided into four key parts. The finance part, the investment part, dividend decisions, and risk management. Risk management involves creating a portfolio of different investments.
Like the proverb goes, ‘never keep all your eggs in a single basket’ limiting your investments to the conventional financial sector could prove counter-productive.
Going for cryptocurrency to diversify your portfolio would level up your business. For one, cryptocurrencies tend to skyrocket in price, offsetting losses from other portfolio investments.
The recent increase and subsequent decrease in the cryptocurrency market capitalization have made several entities reconsider the viability of crypto investments. Nevertheless, companies need to invest in digital currency because it offers several benefits.
Cryptocurrency can serve as a hedge against inflation and a portfolio diversification option. They also reduce transaction expenses. Also, crypto can be used as a new payment method, be held long-term, and transparent.