At Bitwala, we believe that crypto will play a fundamental role in the future of finance. Here are some of the reasons investors love using crypto, from keeping savings safe to shopping online.
Paying your way with crypto
Many people get into cryptocurrency hoping to get rich quick. But crypto is so much more than a short-term investment. Perhaps the most important use for crypto is as currency. We all use currency to pay for products and services and crypto is in many ways a better option. Here’s why.
Traditional currencies are subject to censorship, value manipulation and need to pass through an army of middlemen before arriving at their final destination. Cryptocurrencies, on the other hand, are immutable and uncensorable. What’s more, cryptocurrencies can be transferred instantly, even across borders.
In the past few years, crypto payments have seen massive adoption from financial titans, ranging from central banks to the likes of JPMorgan. But the benefits of crypto payments aren’t just for the financial elite. On October 21, PayPal made crypto an option for over 300 million customers. Using crypto has never been easier, whether it’s sending money back home or supporting your favourite content creators during lockdown.
You’d be surprised by what you can already get your hands on with crypto. Pay for your next pizza with Bitwala’s Bitcoin account here.
Constant growth: crypto evolves
Crypto-curious readers might be disappointed to know there’s no one reason for buying crypto. But that’s actually a good thing. A cursory glance at Twitter shows fierce debate about the industry, including perhaps the most important question: What is cryptocurrency for?
While we’ve already looked at crypto as currency, every investor has their private belief about how crypto is best used. There are two other theories that pop up frequently.
The first of these is that cryptocurrency, namely Bitcoin, is a store of value. A store of value is an asset that does not depreciate in value over time. Some people think that both crypto’s unforgeability and digital scarcity qualify it as a store of value. Consequently, many prominent analysts are bullish about Bitcoin long term, meaning that it could provide better value than storing savings in traditional currency accounts.
On the other side of the fence are those who believe crypto is a “risk asset.” A risk asset, as the name implies, is an asset that carries an element of risk. This usually means price volatility.
This interpretation is enjoying a resurgence after analysts at JPMorgan recently suggested that Bitcoin behaves more like a risk asset. The analysts said, “even a modest crowding of gold as an alternative currency over the longer term would imply double or tripling of the bitcoin price from here.”
But the best thing about crypto is that investors are free to decide on what theories work best for them. This versatility is just one of the reasons that many investors choose to keep at least 2 percent of their assets in Bitcoin.
You can easily explore the world of crypto and add Bitcoin to your portfolio in minutes with Bitwala’s Bitcoin account.
Contrary to popular belief, earning money from crypto doesn’t have to be a nail-biting experience. As the sector develops, it’s easier than ever to generate income from your crypto without having to do anything at all.
The hottest topic in crypto right now is Decentralized Finance, more commonly known as DeFi. The DeFi lending system took crypto by storm, offering interest rates up to 20 times higher than traditional finance. Not a bad way to make use of crypto that is sitting idle in your wallet. With many people now in lockdown and unable to gain access to the financial support they need from financial institutions, DeFi is a community approach that rewards participation.
The roaring success of DeFi and the Ethereum blockchain moved the spotlight off Bitcoin as the best way to create profit from your crypto holdings. Because Bitcoin can’t run on the Ethereum blockchain, it initially looked like a checkmate. But in true crypto style, nothing stays the same for long. Along comes Bitcoin DeFi, a way of running Bitcoin on the Ethereum blockchain.
The Bitcoin is converted into an Ethereum token that represents Bitcoin and is subsequently locked into a smart contract. Wrapped Bitcoin, or WBTC, is one such tokenized version of Bitcoin running on Ethereum. With 117,585 WBTC in circulation, it has witnessed a meteoric 7810% increase in 24-hour volume in the last 3 months. It could be said that DeFi is the biggest buyer of Bitcoin by a margin.
There is a fierce rivalry between some investors siding with either ETH or Bitcoin. But DeFi is yet another way of bridging the gap and making finance more accessible for everyone.