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Is It Too Late to Invest in Cryptocurrencies?

Why it matters to you:
investing in crypto, on average, outperforms any sort of investment in the traditional finance markets like real estate, stocks, and bank deposits by a number of HUGE. Even ten years after its inception, the market is in its early stage of development, and it is still not too late to invest in it.

Bitcoin is already 12 years old—Dogecoin is 8, Ethereum is 7. But does all that mean that it is too late to invest in cryptocurrencies? Or have major growth cycles already passed in 2013, 2017, and 2020? 

No one can say for sure what the price of cryptocurrencies will be even tomorrow, but investing is not trading; here, you can wait. An investment horizon is long-term. This was the strategy followed by early investors in Paypal, Alphabet, Amazon, and Facebook.

Can you imagine the Internet in the early days? So many people were against it, and so many dismissed it as a "bubble." Yes, the dot-com bubble eventually burst, but despite this crash, we can no longer imagine our lives without the Internet.

Great inventions usually predict needs. They raise important questions and find solutions before most of the population even wonders if things need to change. And whether this new way is more effective. 

It's the same with crypto. Over the past decade, the world has gone digital, but the financial industry has not changed much. Most people still transact money and store assets through intermediaries (banks, brokers, and other legal and financial intermediaries). 

In some cases, this is very convenient because someone else manages and stores your money for you. You don't have to worry about deep diving into all the financial processes.

However, these intermediaries come with high service fees, various commissions, complexities with cross-border payments, freezing of bank accounts for no reason, suspending of transactions, bureaucracy, and long waiting times for banking services.

The crypto industry offers an alternative to the traditional financial system. Transparency, immutability, mathematical provability, digitalization, and economy are the main properties of the latest cryptocurrency technology that can completely change the modern world of finance.

However, the cryptocurrency industry is still in its infancy, and growth opportunities are still ahead. It is sufficient to compare the cryptocurrency market's capitalization with other financial sectors.  The total capitalization of the cryptocurrency market is $2.6 trillion—a notably small figure compared to other markets. 

Comparing the cryptocurrency market capitalization against other financial markets’ capitalization.

The cryptocurrency market has reached its current capitalization over the past ten years, mainly due to independent technological development and the interest of retail investors. However, it may have much more growth ahead due to four important factors:

  • Government regulation

  • Big tech crypto adoption

  • Institutional investment

  • Retail investor capital

As a result, the current figures in the region of $2.6 trillion can be easily surpassed, and by 2025, the market capitalization due to the influx of funds of institutional and retail investors may exceed dozens of trillions of dollars. 

The cryptocurrency market is still in its early stages. Therefore, no investor is too late and can enter it at an early stage of development, when many technological solutions are still being developed, and large companies are just starting to enter the market.

Published: Nov 25, 2021
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