10 Reasons You Should Invest in Cryptocurrency

1. Diversification

Cryptocurrency isn’t always impacted by the same trends as the stock market — which means that it can be a great tool to diversify your portfolio. 

• Low Correlation: A report by BlackRock said that Bitcoin is often unaffected by risk factors that can tank the prices of traditional assets. As a result, investing in crypto may help to make your portfolio more resilient for all market conditions. 
• Case Study: After the COVID-19 market crash in March 2020, Bitcoin recovered more quickly than major indices like the S&P 500, highlighting its resilience.
• Practical Tip: Many advisors recommend allocating 1-10% of your portfolio to cryptocurrency to diversify your holdings and balance risk and reward.

2. Inflation Protection

Cryptocurrencies like Bitcoin offer a hedge against inflation — potentially protecting your wealth and purchase power while fiat currencies like the US dollar lose value. 

• Fixed Supply: Bitcoin’s maximum supply is capped at 21 million coins — which means that BTC is protected from inflationary pressures. On the other hand, fiat currencies like the US dollar have unlimited supply.
• The dollar’s decline: An item that cost $80 in 2018 would cost more than $100 in 2025. Meanwhile, Bitcoin’s value rose from under $10,000 to over $100,000 over the same time period! 
• Why It Matters: Bitcoin’s scarcity could make it an attractive store of value worldwide — especially in times of high inflation. 

3. Increased Institutional Support

Cryptocurrency has been legitimized in recent years due to growing support from financial institutions and governments. 

• ETFs: The launch of Bitcoin and Ethereum exchange-traded funds (ETFs) in 2024 brought crypto into mainstream investment portfolios. BlackRock’s Bitcoin ETF alone attracted over $50 billion in investments within its first year.
• Regulatory Progress: Countries across the world are implementing clearer tax laws and licensing frameworks — giving institutions and individual investors more confidence when navigating the cryptocurrency ecosystem. 
• Government support: Donald Trump won the 2024 presidential election on a crypto-friendly platform. On the campaign trail, he promised to create a Bitcoin strategic reserve — which means that the US government would officially hold BTC. 

4. Resilience 

Historical trends show that cryptocurrency is not a fad. Despite multiple bear markets, Bitcoin and Ethereum have both shown steady growth for more than a decade and have built global communities of investors and developers. 

• Longevity: Bitcoin was created in 2009 and has survived multiple market crashes, as well as the collapse of prominent crypto exchanges like FTX. Despite volatility, Bitcoin’s price reached $100,000 for the first time in December 2024. 
• Global Ecosystem: Ethereum, launched in 2015, now supports thousands of decentralized applications (dApps) and secures billions of dollars in value in the DeFi ecosystem. Ethereum has evolved over the years — with the Ethereum Merge in 2022 reducing energy consumption by 99%. 
• Fun Fact: "Bitcoin Obituaries" has tracked more than 450 occasions throughout the years where critics claimed that Bitcoin was dead. Despite critics repeatedly saying that cryptocurrencies were scams, the ecosystem has seen consistent growth. 

5. Historical Performance

Cryptocurrencies have consistently delivered strong long-term returns, often outpacing traditional investments.

• Bitcoin’s Growth: Since its inception, Bitcoin’s price has grown from under $0.01 to over $100,000. 
• Ethereum’s Rise: Ethereum’s value has skyrocketed as it became the leading blockchain for DeFi, NFTs, and crypto gaming, with its price increasing from $0.30 in 2015 to over $4,000 at its peak.
• Comparison: Since 2010, Bitcoin’s annualized return has averaged around 170% — far outpacing the S&P 500 and assets like gold. 

6. Potential for High Growth

The cryptocurrency ecosystem may still be in its early stages, leaving room for exponential growth. Let’s walk through some of the innovations that might bring more investment to the crypto ecosystem in the years to come. 

• Layer 2 Solutions: Ethereum’s Layer 2 networks, like Arbitrum and Optimism, have dramatically reduced transaction fees and increased speeds — making the blockchain more user-friendly than ever. 
• DeFi Growth: DeFi first came into prominence in the ‘DeFi’ summer of 2020 — with decentralized protocols offering lending and interest services that previously were only available through traditional finance. Today, there is more than $100 billion locked up in the DeFi ecosystem. 
• DAOs: Decentralized Autonomous Organizations are revolutionizing governance by allowing platform users — rather than corporate boardrooms — to make governance decisions. For example, MakerDAO uses a decentralized structure to oversee billions of dollars in stablecoin collateral.
• Real-World Impact: Projects like Ethereum are enabling tokenized real estate, decentralized gaming economies, and even blockchain-based supply chain solutions, reshaping entire industries.

7. Cross-Border Transactions

Cryptocurrencies provide a faster, cheaper, and more efficient way to send money globally.

• Remittance Savings: It’s estimated that more than 800 million people around the world receive ‘remittances’ — payments from family members abroad. Today, fees are around 6% and transactions often take days to finalize. 
• Real-Life Example: Cryptocurrencies offer lower fees and faster speeds for remittances. Crypto platforms like Binance Pay allow for nearly instant transfers at minimal cost, helping families keep more of their hard-earned money.

8. Innovation

Cryptocurrency is driving groundbreaking innovation in finance and beyond.

• DeFi: Platforms like Aave and Compound offer decentralized lending and borrowing, letting users earn interest and take out loans without relying on banks. 
• NFTs: Non-fungible tokens have created new markets for digital art, collectibles, and gaming. Today, it’s estimated that the NFT market is worth more than $80 billion. 
• Financial Inclusion: With just a smartphone, people in underbanked regions can access savings accounts, loans, and investment opportunities through crypto platforms. 

9. Investment trends 

Demographic trends seem to favor growth in the cryptocurrency market. 

• Demographic Shift: 94% of crypto investors are between the ages of 18-40. It’s likely the cryptocurrency market will see increased investment as younger, digital-native investors gain wealth. 
• Closing Gender Gap: For years, a disproportionate amount of crypto investors were men. However, this appears to be changing. Women’s participation in crypto investing surged from 18% to 29% in 2024. 

10. A New Financial System

Cryptocurrencies can be an alternative to traditional finance — giving investors an alternative to banks and government-controlled currencies. 

• Decentralization: By removing intermediaries, blockchain gives individuals direct control over their assets. For example, DeFi protocols enable loans without credit checks. 
• Examples: In countries like Venezuela, where hyperinflation has destroyed the value of local currencies, Bitcoin has become a vital tool for preserving wealth.
• Why It Matters: Crypto offers an alternative from systems that disproportionately benefit the wealthy elite, creating a fairer financial landscape. 

How much should I invest in crypto? 

If you’re getting started investing in crypto, you should start small. 

Investing an amount as small as $100 can help you dip your toes in the crypto ecosystem. You can use dollar-cost averaging to regularly buy more crypto and build up your holdings slowly over time. 

Remember, the cryptocurrency market is highly volatile. Never invest more than you can afford to lose. 

What do I need to get started investing in crypto? 

If you’re considering getting started in cryptocurrency investing, you’ll need the following tools: 

Crypto exchange: The first step is to find a cryptocurrency exchange that makes it easy to buy and sell cryptocurrency. Coinbase and Robinhood are considered great options for beginners, and allow you to transfer money from your bank account after you verify your identity. 

Cryptocurrency wallet: A cryptocurrency wallet allows you to control your private keys — giving you full control over your crypto-assets! A software wallet like MetaMask/Coinbase Wallet allows you to interact with decentralized applications, while a hardware wallet like Ledger/Trezor is considered the best option for security. 

Portfolio tracker/tax reporting: A portfolio tracker/tax reporting tool like CoinLedger can help you track your gains, losses, and income across all of your exchanges and wallets. When tax season comes around, you can download a complete tax report in just a few minutes. 

Why is cryptocurrency a bad investment? 

Let’s go through a few of the drawbacks of investing in cryptocurrency. 

• Volatility: Crypto prices are highly volatile. If you’re looking for more stability, you may want to consider investing in traditional assets. 
• Security: Investors are responsible for properly storing their private keys. If you lose access to your private keys, you may lose access to your funds. 
• Scams: The cryptocurrency market is rife with scams and frauds. It’s important to be vigilant to prevent hacks and theft. 

Is cryptocurrency safe? 

While cryptocurrencies offer an alternative to banks and financial middlemen, there’s a drawback: you’re responsible for maintaining the security of your assets. Here are a few steps to keep your cryptocurrency safe from hacks. 

• Two-factor authentication: By using two-factor authentication, you can have an extra layer of protection on your cryptocurrency accounts. 
• Stick to reputable platforms: Make stick to reputable exchanges and wallets. Be wary of offers that seem too good to be true, and avoid clicking on links that you don’t recognize.
• Consider a hardware wallet: Hardware wallets are considered the gold standard for security, because they keep your private keys offline. Consider investing in a hardware wallet like Ledger. 

Conclusion 

Cryptocurrency represents more than just an investment—it’s an opportunity to participate in the future of finance. By taking the right security precautions and building up your position, you can invest in the brave new world of Web3.