Blockchain technology has transformed the way individuals invest in assets, attracting younger and less affluent investors.

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Over a decade after the release of the Bitcoin network’s genesis block, blockchain technology has altered how individuals spend their money, with many platforms in the crypto world having significantly more relaxed investor restrictions when compared to traditional finance.

Investing in cryptocurrencies is less difficult than investing in traditional assets. Anyone can get a free Bitcoin (BTC) or multi-crypto wallet and join one of the many cryptocurrency exchanges. Many exchanges still do not require users to prove their identities, while others require ID verification only when specified thresholds have been reached.

When it comes to buying stocks, practically every platform has Know Your Customer (KYC) protocols that consumers must go through before purchasing their first stock. Furthermore, customers can only purchase equities from publicly traded firms and cannot acquire shares in a private company.

Crypto investors, on the other hand, can invest in tokens established by public or private companies. Early-stage investment rounds, including seed capital, are also available to crypto investors.

Only accredited investors and high-net-worth individuals are often permitted to participate in traditional markets. In contrast, seed-stage fundraising in cryptocurrency projects allows anyone with a wallet to participate. Everything is up to the founding team’s decision. Balancer’s head of growth, Jeremy Musighi

“The transparency of communication between a crypto project’s main contributors amongst themselves and with the larger community is also lightyears ahead of how publicly traded firms work,” Musighi concluded. Access to precise and complete information is critical for investing, and I believe it is a night and day difference when comparing crypto to any other asset class.”

Because of the lack of centralization and lower entry barriers for crypto investors, the business has grown in popularity in developing countries. In Nigeria, for example, 35% of persons aged 18 to 60 (33.4 million) have owned or traded cryptocurrency this year, with 52% (17.36 million) having half of their assets in crypto. This is primarily owing to the country’s lack of cheap traditional financial services. Cryptocurrency is a simpler, more readily available alternative to traditional financial services, or TradFi. Traditional fitness is frequently accompanied by restrictions and red tape that make it difficult for the average Joe to participate.

Cryptocurrency has also attracted younger investors, with competitiveness among friends and family being one of the driving causes. Unfortunately, despite the low barrier to entry, many of these young investors wrongly believe that the crypto market is regulated. Easier access to financial tools may attract younger investors who may not satisfy the criteria for traditional finance.

Musighi feels that younger investors are more interested in bitcoin since they have grown up in a technological environment, stating, “Younger investors are more tech-native.” They spend more time online, identify the value of digital assets more naturally, and understand Bitcoin more quickly. It’s no wonder that the digital generation prefers digital money.”

How are investors profiting in the crypto space?
Cryptocurrency not only makes it easier for investors to gain access, but it also enables many ways for investors to profit. Token sales and decentralized financing are two subsectors of the cryptocurrency economy (DeFi).

Token sales were one of the first subsectors to gain traction in the crypto ecosystem. Token sales are fundraising rounds in which investors can purchase a crypto project’s native tokens before they are available for purchase on the open market. The concept is that investors will be able to “get in early” and profit once the tokens are listed. This is predicated on the expectation that a token’s price will rise following its listing as a result of speculation and increased liquidity.

Token sales can take several forms, including:

  • Initial coin offers (ICOs): Projects use smart contracts to sell tokens to investors directly through their website.
  • Initial exchange offerings (IEOs): Tokens are sold to investors through centralized exchanges by projects.
  • IDOs are initial decentralized exchange offers in which projects sell tokens to investors via decentralized exchanges (DEXs).
  • IGOs are projects that sell in-game assets, tokens, and nonfungible tokens (NFTs) to investors.

    The ICO market peaked in popularity in 2017, hitting the $1 billion mark. ICOs and their newer variants (IEOs, IDOs, IGOs, and so on) were appealing to investors because they were initially incredibly simple to engage in, requiring only a crypto wallet. However, there are now additional regulations such as KYC (for IEOs), whitelists, and limits on how much money can be sent.

Source: https://cointelegraph.com/news/how-blockchain-technology-is-changing-the-way-people-invest

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