Bitcoin and Its Role in an Investment Strategy
Bitcoin has entered the mainstream and more people are taking note of this alternative currency. In fact, mainstream financial sources began talking about this financial product back in 2015 and they have yet to stop. While cryptocurrency has suffered a number of highs and lows in recent years, experts predict it is here to stay.
Bitcoin as a Currency
More companies are taking Bitcoin as a form of payment for goods and services. However, where does it stand in terms of world economies? Many people will be surprised to learn it was the best-performing currency the world over multiple times in the past decade. However, there were times when it was also the worst performing currency. It’s no wonder people are hesitant to dabble in cryptocurrency as a result of this volatility.
An Alternative Investment
Financial experts recommend investors diversify to protect their portfolio. When one type of asset declines in value, others tend to rise. This ensures an investor isn’t wiped out in any type of crash. A person needs to consider their overall financial strategy and where Bitcoin may fit in, depending on their goals and objectives. It never hurts to add something other than stocks, bonds, and real estate in an investment portfolio, with cryptocurrency being an option.
Why Is This Considered a Good Choice?
One reason many experts recommend cryptocurrency as an alternative investment is because it is non-correlated. This means that it is not affected by changes in stocks and bonds. It is a completely independent investment that can boost a person’s portfolio when the stock market is on a roller coaster ride.
People are frequently hesitant to diversify their investment portfolio because they find they cannot calculate the fair market value at any given time of the investment, such as with private equities and hedge funds. However, when investing in Bitcoin, individuals can see the real-time price immediately, thanks to the different tickers and online exchanges currently offered. When searching for more information on Bitcoin and cryptocurrency as an investment, be sure to read multiple sources. Individuals who do so get a full picture of the benefits and drawbacks of investing in this financial product, allowing them to make an informed decision as to whether it is right for their needs.