Is crypto a wise investment compared to FIAT?
Recently when I was talking to someone, we discussed building our corpus fund. My friend mentioned that he wanted to have a huge amount of money as a corpus or retirement fund and retire early. The discussion went in the direction where we both shared our point of view. I inclined more towards holding both cryptocurrencies as well as FIAT. When I say FIAT, not directly FIAT but something in the real world, those who are not aware of crypto investments, find it hard to digest that income can be generated by investing in the crypto world. There is a huge misconception that all cryptocurrencies are used only for bad practices. To counter that argument we could say that the same applies to FIAT too. There are many places where FIAT is also being used for illegal and bad activities.
Future is going to be crypto
I think that the future might look very bright for crypto investments. We are in a strong digital world and the future, this digital world is going to strengthen even more. There are so many innovations happening in the crypto space with the help of blockchain technology. It would be madness if someone is completely ignoring cryptocurrencies. Maybe it may not make sense for old people, but kids who are growing up might start exploring all these new technologies sooner.
Nobody would have wondered if someone had said that in 2020 every individual would have a cell phone in their hand. This was one of the biggest technological advancements where people keep a mini computer with them in the form of a smartphone. In the last few decades, mobile phones have become more efficient and affordable for everyone. Even the older generation is trying to learn because it has become important.
Crypto investments are also something similar. There are many blockchains available out there with so many different use cases. We can pick our use case and invest. I definitely would recommend people to invest in crypto.
Drawbacks of having our retirement funds in crypto
If someone is planning to invest their retirement fund in crypto and wait for it to grow. I would advise against that because any market is volatile and crypto markets are comparatively very volatile and nobody can predict the outcome. Some people have lost thousands to millions of dollars because of bad investments. When you try to invest in your retirement fund it means that you are interested in generating an income that would be passive but with cryptocurrencies such income may be available all the time. It can take a few more years to see many risk-free projects emerging in the crypto world.
FIAT and crypto
I would recommend a combination of both FIAT investment and crypto investment. Government cannot keep themselves away from cryptocurrencies for a very long time. Many countries have already started using cryptocurrencies efficiently and if that happens to be the best payment medium, there will be no other option than accepting this technology in the future. To participate in the good fortune cryptocurrencies are going to be giving in the future it would be good to invest a little bit now.
The balance should always be between FIAT and cryptocurrencies. There should be both real-world investments as well as digital investments. The real world investments can include commodities and properties that can give some kind of passive income. Having just the money alone may not help because the government is printing a lot of money and the money we hold may not mean anything in the future.
To conclude I would say that it is wise to do both investments because the future of currencies will also be crypto and FIAT might slowly fade away and everywhere it would only be digital currencies.
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