Let's start with a known general knowledge. Gold is supposed to be the best insurance against financial crises. But gold is not the only speculative investment and protection against a currency crash. Investors in China and around the world continue to grow cryptocurrencies as demand increases.
1 - The era of good interest rates is over!
Cryptocurrencies are new to the world. Nevertheless, more and more people around the world are becoming interested in it. Unlike state money, cryptocurrencies do not pay interest or dividends. But this argument doesn't work anymore. Other forms of investment such as government bonds are no longer lucrative. On the contrary, you get even less than you paid for it.
The worldwide crises and the negative interest rates have given people an incentive to protect money - digital or physical - through tried and tested and brand new forms of investment.
2 - Increasing value without value increase!
Although the ECB prints over 80 billion euros a month, there is no sign of currency devaluation in Europe. If an inflation rate of 5 percent were to arise in Europe, the value of a cryptocurrencies would also have to rise by 5 percent annually in order to maintain its purchasing power.
But Mario Draghi (President of the European Central Bank) is currently fighting for inflation and deflation!
Prices are falling and the purchasing power of cryptocurrencies continues to increase, even if the value of individual coins does not change. Another point that makes cryptocurrencies interesting.
3 - Diversification and risk reduction!
Spreading wealth is one of the most basic things a wise investor should do. The risk of loss is reduced and fluctuations in the portfolio are reduced. Some forms of investment, such as gold, increase their value in times of crisis due to rising demand.
In 2008, the cryptocurrency was born with the Lehmann bankruptcy. During this period, investors shifted from equities to gold, also during the sovereign debt crisis of 2011, and current hotspots have investors looking for such investments again. The new elections in Spain and the USA, the possible withdrawal of Britain from the EU and the global currency war are just a few points on the list.
4 - The gold of the internet!
Gold has been the ultimate swap for thousands of years and is used almost everywhere as a substitute currency. Digital money can and will most likely replace gold here. Cryptocurrency has many properties that gold also possesses. Even if the world's currency markets collapsed, cryptocurrencies would work. They work from person to person and can be easily sent with Internet-enabled devices.
In the case of gold, there is a risk of prohibition by state bodies. The use of cryptocurrencies, on the other hand, can hardly be restricted.
5 - Paper money is increasing, the amount of cryptocurrencies remains!
Paper money has been increasing all over the world for years. Cryptocurrencies, on the other hand, are only available in a limited number and the previously determined stock cannot be changed after the Coins have been calculated. Since supply is limited, but demand is rising everywhere - especially in Asia - investment can multiply within a short time.
As with gold, price gains after a one-year holding period are tax-free in Germany.
Cryptocurrencies will play a role in a good portfolio in the future. You should never invest more than one-third of your assets in an investment opportunity.
Despite all the advantages and future-oriented technology, cryptocurrencies are a speculative form of investment. Personally, I believe that a rate of 5 to 20 percent is appropriate.
That's why I personally invested in the cryptocurrency DeepOnion. DeepOnion is a completely anonymous privacycoin using the TOR network and with upcoming features such as VoteCentral, Android Wallet and DeepSend it will become one of the most popular cryptocurrencies worldwide in the future.
Find out more about DeepOnion here: https://deeponion.org
Verified by DeepVault: DiPLr87p1SEkkhzQTfaSXfmGLSh7jQGCCm
- to be continued