Crypto vs Fiat Investments

Hello World!

It is a new day from this part of the world. This is my first post on steemit and I have decided to post something on investing in fiat and crypto.

Many authors have made it clear that to be somehow successful, one must develop his/her abilities and skills in saving and investing. What I seek to do today is to look at the most promising asset to investing in with respect to investing with financial institutions which I refer to in this post as fiat investment and investing in crypto.

When investing, the risk factor of the instrument you are investing in is just as important as the investment itself. I have therefore decided to use Treasury Bill in the case of fiat investment to make my analysis since it has very low risk.

The average treasury bill rate in Ghana where I come from is approximately 13%(www.bog.gov.gh) over the last decade (use your local rate) and this rate is much lower in most countries. Now assuming this rate is maintained with minor changes for the next decade, the return on investment over that period will be 13 * 10 which will be 130%.

Another option is a 91 days treasury bill which has almost the same rate. This will be the preferred option for most investors so let have a look at its ROI.
that will be 3.25 * 4 *10 =130%

let us then consider a $1000 investment over this period using the second option. For simplicity, let assume this amount remains the same for every 91 days. The return on investment over the 10 years period will be 1000*130% = $1300

let us round this amount to $2000 because one will actually invest the principal + interest after every 91 days. This means with everything remaining fixed over a 10 years period, one will make about $2000

Before I go further to look at an investment in cryptocurrencies, let not forget that $2000 in the next 10years would not be worth what it is now due to inflation because the central banks and politicians will print new monies anyway.

let take a look at this images captured from coinmarketcap and get some information from it.

Both images were captured from coinmarketcap.

I have no particular reasons for choosing etherum and stellar and i could add more projects from coinmarketcap but this is only for demonstration purpose.

Now, form the images captured, from August 2015 to Feb. 2020, the ROI over this period for etherum is 8000+
That of stellar is also having a ROI of 1900+. Both projects are less than 10yrs old.

So the return on investment would be far too much higher than that of fiat. However, let not forget that blockchain technology and the crypto market is still young and so returns can not be promised especially when most projects in this industry has already failed.

So let look at spreading the $1000 over 10 different projects . That means we investing $100 in each project.
Using ETH as example, $100 worth of ETH during ICO would have been able to buy about 333ETH
At the current price of ETH around $231, the return on investment is about $76923

If we assume that 9 of the projects failed and only one goes well, our return on the single project will be over 1000% more than fiat investment and that is still under 10yrs.

In conclusion, one can therefore say that spending 100$ each on 10 different carefully selected projects today is likely to do much better than investing $1000 with a bank in the next 10yrs.

Invest wisely.