WHY PEOPLE WILL CONTINUE TO PURCHASE CRYPTOCURRENCY
Here’s why people will continue to purchase and maintain their cryptocurrency assets
Decentralized digital currencies have had their fair share of criticism from policing institutes to average investors alike. The former believe the platforms allow for fraud and money laundering, whereas the latter often observe the market to be unstable. The recent crash has made investors nervous as well. However, crypto cynics will likely be proven wrong once again. Here’s why people will continue to purchase and maintain their cryptocurrency assets:
1. It’s Protected Against Economic Conditions
Before the recent cryptocurrency market crash, the economies narrowly avoided crashing themselves. As the COVID-19 pandemic and the economic situations of numerous countries worldwide demonstrated, cryptocurrency can be safe when the world economy is uncertain. Bitcoin itself has its supply limit capped, so despite its recent fall, its price will recover in the long run. Additionally, cryptocurrency is not linked to the stock market, so investing in it opens users to diversifying their wealth storage and investment options.
2. In Times of Mistrust, It Is Safe
The safety aspect of cryptocurrencies goes two ways. Firstly, individuals worldwide are losing trust in central organizations and financial institutions. Several factors contribute to this situation, but the result is individuals wanting to store money and perform transactions without going through processing bottlenecks or continuous surveillance, and cryptocurrency offers the perfect platform to enable that.
Secondly, financial fraud and identity thefts are common. As cryptocurrency transactions are anonymous in how they do not involve user identities, they are considered safer. Not to say that these qualities have not been used for money laundering or crypto frauds by certain individuals, but as more countries accept the currency, they’ll likely be regulated to get rid of those scenarios.
3. It Has Huge Profit Margins
It is not an everyday situation for the market to crash or spike, but we all remember what happened when bitcoin rose to cross $65,000 back in 2021. Recent bloodbaths in the cryptocurrency markets only serve to highlight the volatility of these markets. Both profit and losses can be considerable, so individuals need to keep their portfolios diverse to spread their losses and gains over more channels. Regardless, the markets aren’t stable, and if you play your cards right, you can gain considerable profits.
4. It Has Low Transactional Costs
As no third party is required and the currency knows no national borders, cryptocurrency is ultimately cheaper for users. The transaction fees are minimal, making it especially useful for larger transfers. Additionally, taking money over borders becomes feasible because of the lack of cryptocurrency’s affiliation with any government. These facilities make it incredibly attractive to users.
The Risks This Popularity Entails
The benefits of cryptocurrency to individuals are apparent. However, some risks continue to plague broader societies:
1. Continued Money Laundering
The ability to transport funds has held an equal, if not greater, appeal to criminals as well. Money laundering through cryptocurrency laundering increased by 30% from 2020 to 2021. It may as well continue to increase in the future if regulatory measures are not taken on time.
2. Tax Evasion
Not having your currency held by a central, authorized institution makes it easy to keep your wealth undisclosed. The White House predicts the tax gap to be around $7 trillion over the next decade. Cryptocurrency proves a dangerously effective means to allow individuals and businesses to hide the wealth they possess. All the owed tax will simply put more pressure on the public sector and deprive millions of underprivileged of basic necessities if necessary measures are not implemented soon.
3. Undetected Criminal Movement and Transactions
The anonymity of cryptocurrency makes it a lethal tool in the hands of criminals and terrorists. They can make illicit transactions, raise ransom through such platforms, and move their money out of sight. Transactions can occur over the dark web, too, making policing such activities extremely difficult. With the increasing popularity of cryptocurrencies, more terrorist groups may work over their hesitation to use them. The consequences can be disastrous for the world.