In the early months of 2022 there was an massive sell-off of stocks and risk assets. Arif Elfendi claims the reason for this was rising inflation, anticipations of an increase in interest rates and tensions between Russia, Ukraine, and other risk assets. It is important for investors to diversify their portfolios when the economy is in turmoil. This is the place where crypto investments can help.
Is Cryptocurrency an investment or a Currency?
Cryptocurrency is a virtual or digital currency that is stored in a digital wallet. Arif Efendi believes this allows for payments to be made across the globe, without the need for transport and exchange cash.
Transactions using cryptocurrencies are secured with a method referred to as cryptography. According to Arif Efendi the author, this makes it impossible for users to make double-spends and make counterfeit.
The most distinctive aspect of this digital currency is that it cannot be issued by any central authority. As a result, there is no government interference. It is possible to earn the currency, and then buy it at an broker, exchange or another intermediary.
https://www.globalbankingandfinance.com/interview-with-arif-efendi-on-the-future-of-business-and-cryptocurrency/ Ripple, Ethereum and Litecoin are the three most well-known cryptocurrency. Every coin has its place in the.
Beyond serving as a payment currency It also serves as an investment tool. A lot of people want in trading digital coins to earn profits. Investors are able to purchase digital coins, store them for a time and then sell them as their value increases. Although cryptocurrency is not legal in every country, El Salvador became the first nation to legally allow Bitcoin.
Arif Efendi on Printed Currencies versus Cryptocurrencies
Fiat currencies or printed currencies facilitate transactions. However, they aren't identical. Arif Efendi discusses the distinctions below.
Regulation
The central bank is responsible for regulating fiat currencies since they're issued by government. They are also regarded as legal tender. However, policies of the government can affect their value over time.
Cryptocurrencies are decentralized digital assets. As a result, they are not subject to the control of government. The use of cryptocurrency is not endorsed by some countries since it can be used to conceal money or to serve other illicit purposes.
Form of exchange
You can exchange fiat currency in both physical and electronic formats, but cryptocurrency is only exchangeable in digital form. Because it is embedded in a series of codes, it can't be exchanged in physical or electronic forms.
Storage Method
Fiat currency can be stored in home safes, banks, and fiat wallets. Cryptocurrencies are held in crypto wallets. Fiat wallets can be used to convert the currency of the government into digital assets.
Arif Efendi Benefits of cryptocurrencies over printed currency
The cryptocurrency is an excellent alternative to printing currencies. Arif Efendi said that these benefits contain the following advantages:
Decentralized System
Crypto is a distributed system. Therefore, nobody can control the value of it or its circulation. Every transaction is recorded in the ledger, as banks do. It does not reveal any personal details. This stops the theft of personal data and fraud.
Uses As A hedge
In the context of inflation protection digital assets such as Bitcoin are a possibility. Inflation could lead to more money in circulation, but also lower prices for items that are scarce.
Arif Efendi Bitcoin is designed to ensure that it will remain scarce regardless of the state of the economy. The coins will always be scarce even though thousands of dollars can be used to purchase them. Also, there is a good chance that coins will increase in value.
Payments across Borders
With cryptocurrency, it's possible to transfer money in moments to other countries. Arif Efendi It is easy to send money, and there aren't fees for transactions.
Currency printed in the other hand, will require a few days or even weeks to get to the recipient. Additionally, these transactions come with expensive costs. In certain situations the transaction may be refused due to tension between the countries, sanctions , and rules.
Cryptocurrencies The risks
Arif Efendi discusses the dangers of using cryptocurrency.
Extreme Volatility
Cryptocurrency can be volatile. It is possible to accumulate a large amount of wealth within one month or less, and then go through it all in the blink of an eye.
You can delay getting your refunds
Advertisers and older investors make it seem that beginners are able to earn high returns right away. It is possible that you won't make more money from your investments if you don't have consistent trading and an effective risk management.
Account Monitoring
Even though crypto transactions are secured with encryption, they still leave digital footprints. The FBI can track the accounts of everyday citizens and decode the code.
Arif Efendi Conclusion
Arif Efendi talks to cryptocurrency as a digital investment you can make use of for safe transactions. It is also possible to consider investing in cryptocurrency to diversify you portfolio. This article discussed the differences between cryptocurrencies and printed currencies. The article also discussed the advantages of crypto over paper money.
Arif Efendi reminds investors that cryptocurrency can pose risks similar to other investments. It is recommended that investors seek advice from a professional financial advisor prior to investing.