Do you have troubles like,“When I think of being old, I have a lot of worries, especially about money”Or "I'm thinking about building an asset from now on in preparation for my retirement age. Is there a potential for investment?"
Considering the current global situation, it is somewhat uneasy to rely solely on pensions and retirement benefits.
Therefore, I will explain in detail why cryptocurrencies are attracting attention as asset management destinations for retirement age.
By reading this article, you can understand the advantages and disadvantages of cryptocurrency investment for retirement age, so please check it out.
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Why cryptocurrencies are attracting attention as a method of increasing funds after retirement
Why are “virtual currencies” attracting attention even though there are stocks and foreign exchange investments as a way to increase funds after retirement?
This is because cryptocurrencies can bring about technological innovation on a global scale. In a market where many investors are paying close attention to future trends, there is growth potential.
In the following section, I will explain why the cryptocurrency market is chosen for making money after retirement.
Can be used as savings for retirement funds
The profit obtained from cryptocurrency investment can be converted into legal currency (dollar or yen) and used for savings.
Just like profits from stocks and foreign exchange, it can be received in legal currency, so it will be a future savings.
The cryptocurrency market is attractive as an investment destination that allows building-up of assets over a long period of time, as prices are rising in the long run.
A market with potential
Major currencies such as Bitcoin and some Altcoins are popular because of their future potential.
In particular, Bitcoin, which is the main currency, has events such as the spread of payment and remittance cases and the half-life that balances supply and demand.
In recent years, many countries issue a large amount of currency through monetary easing measures, while cryptocurrencies such as Bitcoin has a major issue that it has an issuance limit.
The built-in system to prevent currency inflation suggests that the market has long-term potential.
In addition, altcoin development, which may cause breakthroughs in specific industries, is also in progress.
Innovative changes may be brought about through blockchain technology, which is the core technology of virtual currency.
It can be inferred that if some altcoin projects are successful, the price will rise significantly.
Overwhelming volatility not found in other markets
The above image shows the price increase of Bitcoin over the last 9 years as shown by Coin Dance.
At 2020, the price 9 years ago was trading at a few dollars.
Comparing the range of increase from that time to the present, it can be seen that the increase is more than 10,000%.
Even the full year calculation shows that the price increase continues for several years.
As the cryptocurrency market has many surges and plunges, there is often great volatility in the short term.
You may have once heard the news about the sharp rise and fall of the cryptocurrency market.
And it may have been recognized as a speculative product with a sharp price movement.
However, given the fact that prices have risen steadily over the span of several years, it is a promising investment destination after retirement.
You can start from a small amount
Cryptocurrency investment has the advantage that it can be started with a small amount of money compared to other markets.
In general, stock investment and foreign currency deposits require funds of at least tens of thousands of yen. Also, an investment trust provided by a securities company requires a minimum equivalent amount.
On the other hand, in cryptocurrency investment, you can invest from about 500 yen to 1,000 yen.
Even people who have never started investing can easily start, and that it can be started from a small amount is a wonderful thing.
There are also cryptocurrency funded investments for retirement life, so you can continue to use a portion of your monthly income.
Investment destination as risk diversification
Cryptocurrency investment has the merit of being able to trade with the true meaning of risk diversification.
Cryptocurrencies tend to have price movements that conflict with the stock market and foreign exchange markets.
Just as “gold” and “silver” are popular stocks as investment shelters in the event of a financial crisis, cryptocurrencies are also attracting investors as risk diversification destinations.
For example, suppose you have a long-standing investment in a company's stock for dividends.
However, when you start your retirement life, a financial crisis may occur, leading to corporate bankruptcy and crash of stock prices.
There is a possibility that the dividend yield will also fall, which increases the risk.
Conversely, holding cryptocurrency such as Bitcoin is likely to cause price increases at the same time as the financial crisis.
This will balance your overall asset amount.
When investing in one financial asset genre, we recommend adding cryptocurrency as a portfolio review.
Notes on starting cryptocurrency
After reading this far, some people may be interested in investing in cryptocurrencies toward retirement.
This chapter also introduces some points to keep in mind when investing in cryptocurrency.
High volatility
In most cryptocurrency markets (bitcoin, altcoin, grass coin), price increases and decreases are extremely vigorous.
Although the number of market participants is increasing all over the world, the market size is small compared to the stock and exchange markets.
Therefore, a large amount of money from large investors and institutional investors makes it easier to move the market in one direction.
The way to deal with the market price is to buy at the price range where the latest low price has been focused on.
With this investment style, you can invest with a low risk reward.
Alternatively, you can invest a fixed amount funding method every fixed period (1 week, 1 month, etc.).
Since the market price has a rising and falling trend, lowering the average acquisition price as much as possible will lead to long-term profit.
Let's change the volatility of the cryptocurrency market into profits well based on the above two patterns.
It is necessary to thoroughly manage cryptocurrency assets
Dealing with cryptocurrencies require thorough self-management.
In deposits, stocks, foreign exchange, etc., users' assets are firmly managed through banks and securities companies.
However, with regards to cryptocurrencies, legislation to protect users has not been accurately established.
Therefore, even if the user loses the cryptocurrencies due to hacking or mistake in remittance, it is extremely likely that it will not come back.
Those who start investing in cryptocurrency should have knowledge of wallet and two-step authentication.
You can manage cryptocurrency safely by taking proper security measures.
Watch out for unrealistic cryptocurrencies
Among the rise of cryptocurrencies, some have been developed for fraud purposes.
There are over 1,500 to 2,000 cryptocurrency stocks, and there are promising altcoins such as Bitcoin, Ethereum and Ripple, which are the main currencies.
With other cryptocurrencies, Altcoin, which is expected to be used in various industries, is being created every day.
However, not all cryptocurrencies are developed with good purpose.
For example,
- You can receive dividends just by holding
- A promise of price increase because it is listed on the exchange (ICO fraud)
- Price is guaranteed
- The blockchain technology is not installed in the first place
There are some cases in which specific cryptocurrencies are recommended with the above-mentioned claims.
All sounds good, but be careful as they are often fraud projects.
As a countermeasure, check the project white paper, development team, and reviews.
Please make sure that your cryptocurrency is credible before selecting a brand.
Summary
This time, I introduced whether cryptocurrency investment is effective in making funds for retirement.
Cryptocurrency is an emerging market, but as you can see from the data, it continues to rise in the long run.
In addition, even when the risk is off in other financial markets, it tends to be bought from the perspective of risk hedging.
It is suitable for asset diversification and long-term funding, so why not choose it as one of asset managements for retirement life.
Even so, there are hacking risks and cryptocurrency scams, so let's acquire knowledge and countermeasures.
