While some political and corporate leaders have been eager to invest in and adopt cryptocurrencies, others are entirely hostile. Turkish President Tayyip Erdogan recently declared outright war on the Bitcoin network. President Erdoğan: "We Are At War" President Erdoğan expressed his opposition to Bitcoin in a meeting with Turkish students this Saturday. The event comes after one of them asked if the country's central bank would adopt cryptocurrencies. Erdogan responded with total rejection: "We have absolutely no intention of embracing cryptocurrencies. On the…
Ever since the launch of cryptocurrency and blockchain technology, several advancements concerning finance have been introduced. The idea was to make transactions safer, more reliable, and permanent using blockchain.
Initially, the technology was focused only on providing payment currencies like Bitcoin, Litecoin, and Bitcoin Cash. More recently, crypto has been focusing more on providing comprehensive financial-related services, including trading and banking.
One service that crypto has replicated from the traditional banking systems is savings. Crypto assets have proven to be excellent modern-day savings tools that provide utter wealth protection.
Why is Crypto a Savings Account?
When saving, users often look for secure banking platforms. Moreover, policies like interests to be earned on savings affect the number of persons saving. Investors want to be sure that their money will increase in value over time.
Investors want to be sure that they can access their invested wealth at any time of the day and whenever they are in case of emergencies. Savings accounts should have policies for transferring funds when need be.
Crypto has all the features of a savings account. Foremost, a user can be sure that all their wealth invested will increase in value over time. Users can access their wealth at any time of the day and anywhere they are in case of emergencies. Also, there is a great technology backing crypto making them great saving tools.
Increase in Value
The traditional financing platforms strive to maintain the stored values, but inflation has always rendered their efforts useless. Although the amount saved could increase due to the interest earned, the value of money drops due to inflation. Even the most reliable fiat assets like USD, EURO, and Pound are subject to inflation. Inflation of assets makes them unreliable for saving.
However, Bitcoin, Ethereum, and many crypto assets have since launch proven to be great hedges against inflation. Looking at their charts, you’ll notice big surges in prices and an almost deflationary attribute.
For instance, in September 2020, the price of Bitcoin was a mere $15k. A few months later, the price of Bitcoin surged to over $60k, four times larger than the initially stated value. Although the prices have fallen to about $40k, the recent surge proves that cryptos are good for storing value. Ethereum has also tripled in value since December 2020.
Since the primary reason for saving is storing value and increasing wealth, crypto is just the right asset. Crypto assets are deflationary; thus, they will continually increase in value.
Value Increase Due to Scarcity
Another attribute that a good savings asset should have is scarcity. Items like gold used as savings assets are very scarce, thus increasing in value over time. Crypto also follows a near similar principle by fostering scarcity.
For instance, there is a maximum of 21 million bitcoins. There are no plans to increase the number of bitcoins circulating; thus, this coin will increasingly become scarce as it hits a global adoption.
The scarcity of a currency, be it fiat or crypto, can help strengthen its demand. High demand means an increase in value, thus utter reliability. Therefore, because of scarcity, crypto savings continually increase in value, earning more than in interest.
Cryptos Global Accessibility and Fast Adoption
The ability of crypto assets to capture fast mass adoption also makes them a good savings tool. Merely a decade ago, it was introduced. That introduced the digital assets world. Now, millions of people globally, especially the young generation, know much about crypto.
Social media and the internet have made crypto’s adoption grow super fast, and the result of that is making the crypto assets value grow super fast. The long-run result is high reliability thus good savings options.
Moreover, no fiat currency globally has a global reach; all fiat is bound within a specified jurisdiction. However, crypto-assets like Bitcoin, Ethereum, Ripple, Cardano, and many more are not bound in a particular jurisdiction. Although banned in some countries, their near-global reach makes them highly reliable investment assets.
When saving, a user wants to be sure that they can access their funds anytime and anywhere. Using crypto, an investor can withdraw their money any day and at any time. Therefore, crypto’s accessibility makes it a reliable savings option.
The technology behind crypto makes them excellent savings options for our time. Blockchain and smart contract technology have increasingly been used in different industries, thus fastening the adoption of the asset. Blockchain’s ability to protect funds and keep permanent records makes more people garner interest in blockchain.
In simple terms, investors are today banking on blockchain technology’s reliability. The increased adoption of blockchain and crypto guarantees investors that their wealth will be safe in the long term, making crypto a great savings tool.
After looking into the crypto world, it’s clear that crypto is a great saving tool of modern-day. Generally, there are several policies that users look for when choosing a platform to save their wealth in. Savings are supposed to be accessible and protect the value of the investors.
Crypto assets possess many savings accounts attributes, including a perpetual increase in value due to scarcity and deflationary attributes. Moreover, crypto assets are accessible from almost everywhere globally, thus can be deposited and withdrawn in emergency cases. The technology backing crypto helps in fraud protection, ensuring transparency in amounts invested and even the earned values.
Crypto is an excellent savings account. Recently crypto platforms have introduced savings options to make them look even more like banks. However, even without bank-like savings accounts, the assets by themselves are great savings options.