Why Are Cryptocurrencies So Popular?
These days trading and investing in cryptocurrencies is a hot topic worldwide. But what is the reason behind their popularity? There are many reasons why cryptocurrencies have gained popularity over the years:
- They are an alternative to a traditional banking system.
- They can be used for day to day transactions as well as for investment. Hence, they are a good alternative to holding cash or investing in traditional investment products such as gold and shares.
- They provide an alternative method of investment apart from traditional asset classes.
- They have the potential to become the fastest, cheapest, easiest and safest mode of exchange acceptable universally.
- Cryptocurrencies provide equal opportunity to all, irrespective of a person’s background, country of birth and other such factors. As long as a person has a device connected to the internet network, they can use cryptocurrencies. This provides broader economic freedom to all.
- Since cryptocurrencies are geography agnostic, they provide opportunities for free trade, even in countries with tight economic control.
- For countries affected by inflation fluctuation, cryptocurrencies provide safety of the value of investment and hence are a great option for savings and payments.
- They are free from government control. Traditionally, the value of every currency is dependent on various factors, especially the stability of the government. For example, on January 6th, 2021, when rioters stormed the United States Capitol, the value of USD to INR fell to ₹ 73.06 compared to ₹ 73.26 on January 5, 2021. However, USD rose to ₹ 73.58 on January 8th, 2021 once the situation was brought under control. (Please note that USD to INR rate mentions the number of Indian Rupees required to purchase 1 USD. Less amount of Indian rupees means USD is weaker). However, the value of cryptocurrency is not affected by the political and economic events happening in a country.