As people strive to find a more rewarding haven for their investments, cryptocurrencies such as bitcoin have now become the talk of the town. Prof Kuber Sharma tells you how students can make it a lucrative option
The COVID-19 pandemic has led to an unprecedented economic crisis. Every industry around the world has been affected by this pandemic, with the IMF calling it the worst recession since the Great Depression. Companies are missing their earnings estimates, people are losing their jobs, experiencing salary cuts and many traditional investments have taken a hit across the board. As people strive to find a more rewarding haven for their investments, cryptocurrencies such as bitcoin have now become the talk of the town. What are the reasons that are propelling this phenomenon? Let’s analyse.
First and foremost the equity market is losing its attractiveness post the coronavirus crisis because of decreased demand for many companies' products, resulting in long-term declines in corporate profits. Investors are looking for more rewarding options to invest other than stocks. Since Cryptocurrencies such as Bitcoin possess many properties that are similar to that of precious metals such as Gold, they are indeed emerging as an important and highly rewarding asset class.
Secondly, cryptocurrencies such as Bitcoin are proving to be an attractive option because there is very little correlation between them and traditional investments. So even if traditional investments are growing or declining, the appreciation in cryptocurrencies is fairly immune to them. As a result, for Investors, there is more room to incorporate assets in their portfolio that have little correlation with the uncertainty in the economy.
Thirdly, even before the outbreak of COVID-19 pandemic and subsequent economic fallout, financial experts around the world were already recommending some exposure to cryptocurrencies within investment portfolios. Post COVID-19 pandemic, the crypto market remains on the growth path, and cryptocurrency trading participation by institutional investors has become much more significant. One such reason behind this is because cryptocurrencies are protected against inflation. So, events like the crash of the stock market, the spread of COVID-19 and others has little impact on the value of these digital currencies.
The fourth and most important reason is that cryptocurrency is one of the biggest applications of very popular and very trust-worthy Block-chain technology that eliminates the needs of middlemen, allowing transactions to perform directly and swiftly between two entities. This phenomenon of performing transactions swiftly while saving on brokerages and middlemen feeshas particularly piqued the interest of several large scale investors, particularly the large global banks.
Blockchain has leaped onto the world stage and presented itself as the next-generation solution for many of the tech & finance sectors' most pressing problems. It has now received influential endorsements from government leaders, industry titans and ambitious entrepreneurs in an unprecedented acknowledgment of the technology’s prowess. The future of cryptocurrency seems very bright not just for investing but as a career path also.
What the blockchain industry needs are people who are aware of this ecosystem and are interested in continually enhancing their skills, and staying up to date with the industry’s advancement. There are steps blockchain enthusiasts can take to start developing their careers in the space.
Popular career options in cryptocurrency
Want to apply your passion and knowledge of cryptocurrency to a profession? Here are three burgeoning career options you can pursue:
Blockchain Engineer: Blockchain engineer is an attractive career option that helps building applications using blockchain technology. While typical blockchain engineers used to track digital currency transactions, many companies are now creating customised technologies as per their own requirements.
Financial Analyst: As the world is moving more-and-more towards digitalisation, the need for financial analysts who are fluent in crypto as an asset class has increased more than ever. As a financial analyst, your role is to help clients make smarter investments in digital currency.
Cryptographer: The work profile of a cryptographer is to develop algorithms and security systems to encrypt sensitive information, such as protecting data in finances. If data protection interests you, you can probably lookout for this as a profession. Additionally, cryptographers are engaged in designing and developing several customised applications that help in maintaining national security.
Alternatively, there are many career options that exist in the Sales & Marketing functions and other functions such as Business Analysis, Technology Analysis, Advertisement & PR, Investor Relations, Legal, Regulations, Corporation Communications and others.
The writer is Professor of Practice & Investments Dynamics , JK Business School
