Ask CryptoVantage: Is it Too Late to Invest in Crypto?

Counterpoint: It's Not Too Late to Invest in Crypto

From traditional financial institutions getting involved in the ever-evolving space to emerging products in the crypto industry, here are reasons why it’s not too late to hop on the bandwagon.

#1. Institutions Are Playing

For a long time, the notion of Wall Street companies associating themselves with cryptocurrencies was considered laughable. And yet, traditional finance institutions have not only poured billions worth of crypto into their balance sheets, they’ve built out teams solely dedicated to the phenomenon and are jostling to launch crypto-focused products, such as a spot Bitcoin ETF.

JPMorgan Chase, Morgan Stanley, and Goldman Sachs are among Wall Street veterans that have allocated teams to focus exclusively on crypto and blockchain.

In recent years, we’ve also seen a raft of companies invest in crypto — including MassMutual, BlackRock, Tesla, Square, MicroStrategy, and lesser-known ones such as Fairfax County Retirement Systems and a few Canadian pension funds.

Institutional interest in cryptocurrencies indicates a broader acceptance of crypto as a legitimate asset class. Crypto’s reputation is that it’s mainly adopted by retail investors who are driven by greed and an obsession with “getting rich quick,” all without an intrinsic value to go by. Sometimes, institutional interest is the one to move the needle.

Traditional companies entering the space illustrates their belief in the crypto industry being onto something and they want to get a piece of the action. This signals that it’s still a good time to get in.

#2. New Projects on The Block

Almost every week, there’s a new crypto project on the block. This would mean crypto is dynamic and evolving and is still attracting innovation. What’s interesting about this is you never know which crypto might gain wildly, making for exciting investment opportunities.

At the time of writing, there are upwards of 20,000 cryptocurrencies. While most of these have no value/real utility, you have some really innovative projects offering real solutions.

For instance, Solana, Cardano, and Polkadot — are projects that are relatively young but have left older ones in the dust. Dubbed “Ethereum killers,” these blockchains do what Ethereum does: support smart contract-powered decentralized applications (DApps).

But they’re cheaper, faster, and interoperable with blockchains, making them a favorable destination for app devs. These projects have risen to the top 15 in no time — demonstrating the value they inject into the ecosystem.

#3. Crypto Offerings

Lately, in the crypto space, everyone has been talking about Bitcoin ETFs as BlackRock has applied for a spot Bitcoin ETF to the SEC.

In general, cryptocurrency derivatives such as BTC and ETH based futures and options offered by Binance, Deribit, and the Chicago Mercantile Exchange signify that the clients of these institutions are interested in the asset class. Institutional investors are usually risk-averse — so their dabbling in crypto is a testament to its value.

Crypto derivatives will no doubt continue to gain traction as institutional investors continue to look for ways to gain exposure to cryptocurrencies without having to maintain crypto wallets or sign up on exchanges.

These clients are willing to experiment with crypto, meaning it’s not too late to invest.

#4. Crypto’s Promise

Seasons (whether bullish or bearish) come and go. But crypto’s promise of decentralization and financial autonomy still stands. That autonomy is partly enabled by its deflationary nature.

This is especially true for Bitcoin — the pioneer cryptocurrency. Bitcoin is deflationary for two reasons: its supply is capped so there will only ever be 21 million coins. It also features what’s known as “halving” every four years. Halving slows the “minting” of new bitcoins, making it inflation-resistant.

This is in sharp contrast to traditional money that’s printed when the occasion calls for it — reducing its purchasing power over time.

The deflationary nature of Bitcoin makes it a hedge against inflation and has earned it the name “digital gold.” This digital gold can help people store wealth. It’s a safe haven during economic uncertainties for holders. It also provides value for people in countries whose national currency is flailing.

As long as crypto fills this gap, anytime is a ripe time to invest.

Final Word: It’s Still Early

It’s not too late to invest in crypto. Indeed, the space is just getting started.

From institutional companies paying attention to an apparent interest in crypto derivatives to crypto’s very own nature, the opportunities are boundless.