Can Value Investing Be Found In Digital Currency?

Can Value Investing Be Found in Digital Currency?

Value investing occurs when an investor purchases an asset at a discounted price against its exact value. Undervalued companies list their shares for trade on various stock exchanges worldwide. Stock exchanges facilitate the buying and selling of shares. Investors in this kind of venture believe that the market overreacts to social, political, and economic changes. Naturally, the movement in stock prices is not an indicator of the company’s principles or performance. However, the investor gets an opportunity to profit by buying in at a deflated price. 

Value investing and cryptocurrency

A 2021 Gemini report reveals that approximately 14% of adults in the US are crypto owners, and 63% are curious about digital currency. People are increasingly putting their trust in cryptocurrency as names such as Bitcoin become commonplace in the financial arena. Like stock exchanges, digital currencies are used in transactions and sometimes experience price fluctuations.

Digital currency qualifies for value investing because it is bought and sold on different platforms and has transferable wealth qualities. With this in mind, it helps to consider that a digital currency such as Bitcoin was created as a remedy for the US financial crisis. Therefore, it is expected to withstand or even flourish during economic downturns. Cryptocurrency is an intriguing investment, and it can be profitable, though it attracts potential risk.

An investor needs to be well-versed with the details of crypto trading and available tools. Unlike stocks, digital currencies do not need to operate under the supervision of a management team, and they do not have to exercise any financial discipline. Technological advancement does not affect digital currencies.

Benefits

Digital currencies are meant to create trustworthy currency separate from the traditional financial structures. They are structured to eliminate some of the failures of standard currencies. Digital currencies highlight:

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