Bitcoin is a part of our popular culture today. Since its inception almost a decade ago, it has come a long way. An obscure whitepaper idea published by an anonymous entity has become one of the most talked-about technological innovations of our time.
What was responsible for the buzz around Bitcoin? Bitcoin is essentially a new digital currency that is exchangeable directly by peers without any third-party intervention. The distributed blockchain ledger technology makes this feasible. It is an innovation aimed to improve on the imperfections of the traditional ledger system that banks use. Thus the Bitcoin and other cryptocurrencies are in great demand today.
Several big multinational corporations like Tesla, PayPal have already invested in Bitcoins. Several vendors accept payment in Bitcoin and other cryptocurrencies. Due to its rising demand, the price of a single Bitcoin has skyrocketed to a staggering 68,000 USD.
Now we all know the numerous stories about the Bitcoin Billionaires. This is a lucrative yet high-risk asset. The question is, is it worth including in our portfolio? Let us find out.
Cryptocurrency portfolio
With the proliferation of cryptocurrency exchanges all over the platform, it has become increasingly more accessible for people to trade in cryptocurrencies. Today there are over 7500 tokens including Bitcoin, in the crypto market. Through trading platforms https://bitcoins-era.com/, traders can invest or trade in crypto. These trading applications allow users to create their crypto portfolios and store their tokens in integrated wallets.
But should you be investing in cryptocurrency?
Investing in crypto
Experienced investors in cryptocurrencies recommend that we should ‘trade cautiously’. Cryptocurrencies are high-risk investments as they are highly volatile. A new trader can always play safe by investing in stable tokens like Ethereum or Bitcoin. The chances of losing money drastically on these tokens are lower than that in new tokens that are at their initial inconsistent stage.
Experts also recommend that since cryptocurrency is a high-risk yet high-value asset, you should invest judiciously. Invest the amount you won’t mind losing. We have to remember that the crypto market is relatively new compared to the traditional hub of trading, the stock market. The crypto investment may account for 5-10% of your entire portfolio and should not get in the way of your financial sustainability.
Beginner’s guide to crypto investment
Bitcoin is at its nascent stage, and traders worldwide are getting habituated to this new asset amidst them. From existing trends of gains and losses, we can sum up a few important points we should remember as new investors
- Do not consider crypto investments as a shortcut to getting stinking rich. We are not ready to be so adventurous in the crypto market. Such experiments are well suited for the stock market. Instead of trading, invest for a long term.
- Invest an amount you can afford to lose. Both the markers are highly speculative. But the values are more volatile. We have seen Bitcoin’s price soar in a matter of days and also plunge into low value too. To not suffer the fate of the investors who lost millions, traders should invest a safe amount of money.
- The future of cryptocurrency is still uncertain. It might die out as a fad. However, experts believe that it is going to stay with us for quite some time now. But wise investors must take account of the probable pitfalls from existing trends.
Conclusion
The anonymity conferred by the blockchain ledger to its users is one of the USPs and a drawback. While users can circumvent issues like surveillance, data theft because of the blockchain ledger, it should also be known that it is increasingly used by criminals and money launderers. Several countries like China or Turkey have already banned crypto. Keeping in mind the possible pitfalls, you should decide for yourself if it’s worth including cryptocurrencies in your portfolio.
