Investments in Cryptocurrencies

Diversifying revenue streams and customer bases has always been a priority for payment platforms. Adding as many payment options as possible is one of the strategies for diversification. ACH payments, credit/debit cards, and cryptocurrency operations (a recent addition) are some of these payment options.

What will happen to cryptocurrencies if interest rates fall?

The pandemic is affecting every economy in the world. Most countries use two strategies in order to mitigate them. For instance, the Fed has lowered interest rates. To increase borrowing affordability (mainly for businesses), this step has been taken. Different rescue packages are another strategy. A significant part of their outreach is to SMEs, which act as the “arteries” of the economy.

Low-risk instruments have traditionally been preferred by investors. Among them were savings and checking accounts, government bonds, and money market accounts. The modest returns provided by these investment vehicles are on the verge of disappearing. Due to money injected into economies through rescue packages and low-interest rates, inflation is looming. Investing is a complex process, so what alternatives are there? How will potential inflation affect the cryptocurrency market?

Are cryptocurrencies a good investment?

Traditionally, cryptocurrency markets have been known for their high volatility. Do cryptocurrencies ever have a chance to become low-risk investments? Recent developments have led to the introduction of stablecoins. Worldcoinindex features these cryptocurrencies. On the other hand, they are pegged to the US dollar rate, unlike Bitcoin or Ether. Therefore, their prices are unlikely to fluctuate greatly. Among the examples are BUSD, USDT, and PAX.

Therefore, stablecoins have already been used as investment instruments by some businesses. How much does the annual yield amount to? Get up to 16% return! It is enough to counteract inflationary pressures. The rise of stablecoins has created a feeling of hope among many investors.

Stablecoins and cryptocurrencies, particularly, will become more important in the near future as payment methods. In order to enable cryptocurrency payments, payment gateways and payment platforms need to support them. Visa, for instance, recently began using USDC stablecoins to settle payments.

With stablecoins, your money won’t go bad as their rate won’t change, and their peg doesn’t fluctuate. The ability to accept cryptocurrencies, therefore, becomes crucial for payment platforms.

Find out why decentralized financial (DeFi) services are gaining traction and how you can learn more about them by contacting us.