As a nation, America continues to rack up personal debt. As of early March, USA Today reports that the average citizen holds $5736 of credit card debt alone, an increase of 7.5% on 2015. What’s more, according to the Fed the sheer level of debt might make the next debt bubble more difficult to fix than previous incidents, like the 2008 crash. For those with smaller debts who are looking for a long term solution, cryptocurrency might provide the perfect investment with regards to protecting your financial future.
Weighting against re-consolidation
For many Americans, debt is not only confined to one product. Gallup found that most Americans have over 3 credit cards, all with different terms and interest rates. This is one of the most common types of persistent debt, and a common method that those with multiple credit cards use to reduce debt is reconsolidation, which will often reduce payments and provide a better overall interest rate. Having a cryptocurrency portfolio can act as a further insurance policy against those interest rates. The majority of coins have provided huge gains since exchange listing; for instance, ADA has returned 118% ROI. Accordingly, having a developed portfolio can allow you to out-earn the rate of interest and reduce your debt rate earlier.
As a long term asset
The other way to look at cryptocurrency is as a long term investment. This would be the approach favored by most stock market or forex traders. What bitcoin offers over and above many common trades is that it is independent. According to Garrick Hileman, a research associate with the London School of Economics, this makes bitcoin a form of digital gold. It’s likely that in the case of a financial crash, or a debt bubble bursting, bitcoin will retain its value and bring benefits to those who chose to invest – just like gold has, historically.
With practice, for short term goals
Savvy crypto investors can stand to make huge gains over the course of a day. If you have a small debt that doesn’t impact on your day-to-day income and are making the payments, it can be beneficial to turn spare income into investments. As noted above, crypto has experienced dizzying highs, and you may be able to turn a small amount into a fortune – in the process paying off debt and creating a new nest egg.
Cryptocurrency remains relevant, and in many ways, the lack of limelight has allowed it to flourish. As debt continues to mount, bitcoin and its relatives may be the way out of the next debt crisis. Those looking for a new debt strategy may benefit from taking a look today.