The stock market was hit by a massive selling of stocks along with other risky assets in the first few months of 2022. Arif Effendi thinks that this is due to the rising inflation rate and the fear of an interest rate hike. A volatile economy means that investors have to diversify their portfolios. This is where crypto investing comes in.
Is Cryptocurrency an asset or a form of investment?
Arif Efendi Cryptocurrency is a virtual or digital currency that is stored in a digital wallet. Arif Efendi believes that it makes it easier to transfer money across the world without having to carry or exchange physical cash.
A method known as cryptography protects transactions made with cryptocurrencies. https://www.kitapyurdu.com/yazar/seyhulislam-mesrebzade-mehmed-arif-efendi-/217094.html This means that it is impossible for users, as per Arif Efendi, to make a double-spend.
The unique aspect of this digital currency, is its inability to be issued by any central authority. Arif Efendihttp://acikerisim.uludag.edu.tr/handle/11452/14743 It is completely free of government interference. You can make money from the currency or purchase it from an exchange or a broker.
Ripple, Ethereum (Litecoin), Bitcoin and Ethereum are just a few of the popular cryptocurrencies. Each coin has its own advantages.
The cryptocurrency can also be employed to invest. Arif Efendi Many people who are looking to invest in digital currency are trading them to earn profits. Investors purchase them and keep them for a limited or long time, then take them back when their value rises. Although some countries ban crypto use, El Salvador was the first nation to adopt Bitcoin as an legal trend.
Arif Efendi on Printed Currencies versus Cryptocurrencies
While fiat currency and cryptocurrency can both be utilized to facilitate payment but they are not working in the same way. Arif Efendi explains below a few of the differences.
Regulation
The central bank oversees fiat currencies because they are issued by government. They are also considered to be legal tender. But, their worth may change over time due to the policies of government.
Cryptocurrencies are digital assets. Digital assets that are decentralized can be used by anyone without the interference of government. The use of cryptocurrency is not endorsed by some countries since it could be used to transfer money, or to serve other illicit purposes.
Form of Exchange
While fiat currency can be found in electronic and physical formats, it is only available in digital form. This is due to the fact that cryptocurrency is embedded into an array of codes.
Storage Method
Fiat currencies can be stored in safes, banks, home, or fiat wallets. Cryptocurrencies are stored in crypto wallets. Fiat wallets can also be used to convert government-issued currency into digital assets.
Benefits of Cryptocurrencies Over Printed Currencies
The benefits of cryptocurrency over paper currency are numerous. Arif Efendi said that these benefits contain the following advantages:
Decentralized System
Cryptography is decentralized. Crypto is decentralized, meaning that no one is able to control its value or circulation. Every transaction is recorded in the ledger in the same way banks keep track of transactions. Arif Efendi However, it doesn't expose the personal information of the user. This stops fraud and data breaches.
Serves as a hedge
As a hedge against inflation Digital assets like Bitcoin are a good option to hedge against inflation. Inflation will result in more money circulated, however it will result in cheaper products.
Bitcoin is designed to be scarce regardless of economic events. There will be many people who can buy bitcoins for hundreds of dollars. It is likely that the coins could appreciate in value.
Payments across Borders
With cryptocurrency, you are able to send money to people from other countries in a matter of seconds. The fees for transactions are low and the whole procedure is simple.
It could take several weeks or days for printed currency to reach the recipient. The fees associated with these transactions can be astronomical. Sometimes, transactions can be refused due to conflicts between different countries or the regulations.
Cryptocurrencies can be a source of risk
Arif Efendi outlines some of the possible risks with cryptocurrency use.
Extreme Volatility
The risk of investing in cryptocurrency is quite high. You can amass a lot of wealth in one month or less, and then be wiped out in the blink of an eye.
Don't put off getting results from your investment
Older investors and advertisers make beginners believe that they can start getting high returns immediately. However, it's possible to earn lower returns on your investments if there has been consistent trading over the course of time and you've taken care of your risks.
Account Tracking
Although crypto transactions are secured with encryption, they still leave digital tracks. The FBI is able to read and monitor accounts of regular citizens.
Conclusion
Arif Efendi speaks about cryptocurrency as a form of digital currency that can be used for secure transactions. It is also a great way for diversification of your portfolio. This article will explain the differences between cryptocurrency and paper currency. It also shared the benefits of crypto over paper currency.
Arif Efendi points out that cryptocurrency, just like any other investment, has its own risks. He recommends that investors consult an expert advisor prior to investing.