Crypto as an investment

Cryptocurrency is rapidly gaining momentum as a recognised form of currency, globally. According to MDPI research, the digital, virtual currency has seen significant traction in countries such as Africa, the United States, Australia, the UK and some parts of Europe with Bitcoin remaining the most used, followed by Ethereum.

It is moving into a more mature stage of its development, says S&P Global, which is ultimately leading to increased interest in how crypto platforms and the ecosystem as a whole can increase the value it offers and its sustainability.

The legitimacy and potential of crypto are having a positive impact on regulatory landscapes in Africa, with many countries showing forward-thinking planning around how the ecosystem can evolve to provide improved economic growth and investment opportunities.

South Africa issued its first 100 crypto asset service provider licenses and Kenya has announced their intention to follow suit. With regulations framing the platforms more cohesively, according to the Africa Blockchain Report, there is more potential for investment opportunities.

In addition, reducing regulatory uncertainty reduces the risk traditionally associated with investment in cryptocurrency as it is important for long-term viability and adoption.

Another key consideration for crypto is its volatility. This is both an asset and a risk factor – the currency has the potential for high returns, something early adopters of Bitcoin and Ethereum benefitted from as they saw their investments multiply many times over.

The story of the crypto-millionaire may not be as common today, but it is not out of reach when investments are made wisely and on trusted, safe, regulated platforms.

New trend

The market has seen an increase in various altcoins and DeFi tokens which have delivered returns that overshadow traditional investment vehicles.

The potential for high returns is rooted in the disruptive nature of blockchain technology and its applications. These cryptocurrencies are not just speculative assets, they are innovations in finance and digital ownership and as they continue maturing, they’re offering investors solid returns that have long-term value.

However, it is important to remain aware of the volatility of cryptocurrencies.

Amidst the success stories are failed projects and diminished returns – this makes it key that investors approach the market with a level of caution and use a platform that provides them with insights that are trusted and relevant.

Binance provides a crypto wallet for traders to store their electronic funds and is built on trusted foundations that are designed to support investors as they explore different currencies.

The platform offers programmes designed to help people make investment decisions – Binance Academy – which is free and accessible to anyone who wants to transform their investment strategies.

Providing a deep understanding of cryptocurrencies and the markets, institutions such as Binance, help investors minimise the risks of volatility and helps them better manage and invest their money.

The platform is also secure which is another key challenge within the crypto investment space. While the technology itself is secure, hacks and scams can affect the wallets and platforms that trade and store cryptocurrencies.

The risk of losing funds to unethical actors underscores the importance of using a platform that has invested in its security. When operating within a compliant platform that’s aligned with security and regulatory expectations, investors can ensure the long-term sustainability of their investments.

Conclusion

While the cryptocurrency investment landscape is a mix of opportunity and challenge, it is a space where anyone can benefit from high returns and an energetic investment portfolio. The trick is to use the right platform and have an understanding of the market and its risks.

For investors willing to navigate these challenges, the market is more than just a space in which to grow their funds, it is a chance to participate in the future of finance.

The writer is the Operations Manager – Africa for Binance