For rich millennials, there seems to be a common element to their portfolio. Did you know that 83% of millennial millionaires own a cryptocurrency? The short and long-term potential of cryptos is attractive to this generational group.
Of that group, roughly a third have at least 75% of their investment holdings in cryptocurrency. Given the enormous returns observed over the last few years, it is hard to question their strategy.
However, many people are still uncertain about investing in cryptocurrency. Read on to learn about cryptocurrencies and explore the best, including Ethereum (ETH) and Bitcoin (BTC).
Before diving into investing in cryptocurrency, it is crucial to define it. Cryptocurrency is a form of digital currency.
Decentralization is a vital component of the crypto market. There is no central government or global bank behind cryptocurrency. This gives investors a feeling of independence as a cryptocurrency cannot be tainted by government manipulation.
There are so many things that make crypto special and a worthy part of your investment portfolio. On the financial side, cryptos are yielding some of the highest return on investment (ROI) margins in the game.
From a technical standpoint, digital currency allows for quick and cheap money transfers. These transfers are ultra-secure because they rely on blockchain technology.
The decentralized nature of cryptocurrency is another reason it is special. There is no single point of failure, and crypto shifts power away from traditional government-backed currencies and banks.
There are so many options out there in the cryptocurrency space. They all serve different missions and are available at various values.
BTC is the original coin to make a name in the cryptocurrency market. Before a price decline in 2022, there were over 100,000 bitcoin millionaires.
In January 2017, BTC was trading for less than $1,000 a coin. Even after a correction, BTC still trades at nearly $24,000 per coin. It peaked last November at more than $65,000 per coin.
The blockchain ledger powers bitcoin transactions. This is software that allows for encrypted and secured transactions that maintain anonymity. It is nearly impossible to hack into the bitcoin blockchain.
There is a maximum supply of bitcoin. Every new coin added to BTC’s supply requires a complex mining process.
Bitcoin has engrained itself in the global financial system. Major companies such as Microsoft, PayPal, and even Starbucks accept bitcoin as a form of payment.
It is also culturally significant. Professional athletes and celebrities are negotiating contracts with bitcoin compensation. The Central American government in El Salvador also made bitcoin a legal tender in the nation.
Many forms of crypto emerged in the wake of bitcoin’s success, with Ethereum as a prime example. Like bitcoin, blockchain technology powers Ethereum.
Users retain control over their data and what, if anything, is shared. To pay for items on the Ethereum network, users pay with a crypto token called Ether (ETH). In terms of market capitalization, ETH is the second largest behind bitcoin.
In January 2020, ETH was trading for less than $150 per coin. At its peak, it reached over $4,600 per coin and is still trading 10x higher than its January 2020 position.
You now have a small taste of the crypto world. There are many other types beyond the ones listed here. Many have significant potential for growth, especially as a recent correction has made them more affordable.
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