Silver has become a valuable asset to many investors for many reasons. It’s been around since the earliest civilizations. Like most natural resources, silver is considered a commodity. This means that its price is inversely proportional to those of stocks and bonds. It’s a physical asset, so it has intrinsic worth. When the stock market is down, many investors turn to silver and other commodities.
Advantages Of Silver As An Investment
- Inflation hedging: it’s an investment that can be used to offset the expected drop in a currency’s price due to inflation. This could protect the decreased power of a currency. Investing in silver is an effective way to maintain your wealth because it provides a decent return on investment, especially if inflation is factored in.
- Diversification: Most investors purchase silver as a means to diversify their financial portfolio. Diversification isn’t only limited to having stocks, but also having various asset classes. Silver is considered a stable option because it’s less related to other markets, so it’s less likely to be influenced by inflation
- Tangible: Silver is a finite tangible asset. Unlike cash, bonds, mining stocks, and other financial products, silver isn’t completely affected by market fluctuations, like other commodities. Investors can buy silver bullions in different forms and through various means, like using cryptocurrency.
Risks In Investing In Silver
To avoid damaging your investment portfolio performance, here are some things you should know before investing in silver.
- Supply and demand: While silver is a great way to diversify your portfolio, it can still be subjected to the law of supply and demand. This might result in fluctuation in prices, which could potentially cause you great losses.
- Premiums: When you ought to buy silver, you’re required to pay the current price and a premium. Make sure you examine different brokers so you can get the best price possible.
- Fraudulence: All types of investments can face the risk of fraud, so you should be careful in choosing your broker. Steer away if they promise you guaranteed returns, like if they claim you can make more money even if there’s only a little risk.
- Emerging technology: Certain industries might have come up with technology that can replace silver as a material for their products. This will significantly decrease the demand for silver, so you can expect that the price will be lowered, too.
How To Invest In Silver With Cryptocurrency
Now that you’ve considered the advantages and the risks of investing in silver, you might want to know how you can purchase silver. There are many ways of investing, like buying the physical form, using silver futures or contracts you have to own without actually owning physical silver to avoid hassles, buying an exchange-traded fund (ETF) that actually owns physical silver, investing in silver mining stocks, or using cryptocurrency, like Bitcoin, in trading.
Since the rise of cryptocurrency these past few years, new and experienced investors alike use cryptocurrency in diversifying their portfolios. They saw the potential of cryptocurrency in trading precious metals, like gold or silver, due to the convenience of its transaction process. Because of the decentralized nature of cryptocurrency, they can bypass the obstacles of buying online with a credit card. It also removes the global lines, transcending exchange rates, geographical distance, and even language.
So, here’s the step-by-step process you should follow when buying silver using cryptocurrency:
1. Make sure you have a digital wallet in which your chosen cryptocurrency will be stored. Your crypto wallet that holds your coins can be used on a website that sells silver. It should be accessible to you through an email address and a password. Be careful of your login information because someone can easily hack this if you move carelessly.
2. Find an authorized silver dealer who accepts your chosen cryptocurrency. There might be a website where you can easily access their products. Normally, they offer other forms of payment. Add your selected items to a cart, then proceed in clicking the Check Out button.
3. Now, you’d be offered different payment methods. For this case, select the Bitcoin option since it’s the most common among cryptocurrencies. Some websites require your digital wallet app to open their payment submission page for your convenience. They need to complete your payment by either: scanning a QR code, in which the invoice can be easily scanned by your digital wallet to transfer the payment; or, by filling out payment information with your digital wallet synced with the website.
Note: You should send the amount in bitcoin (BTC), not in dollars (USD), so make sure you change the currency.
Investing in silver has its upsides and downsides, so make sure you consider these before deciding on diversifying your portfolio by buying such a commodity. As financial systems change with time, such types of investments are good alternatives for the legal tender that’s often correlated with the country’s economic state.
Using cryptocurrency in buying precious metals, whether gold or silver, is one of the most reliable ways to invest. It’s proven to have fast transactions once you’ve already established your digital wallet.