Why It Is a Must to Have Crypto in Investment Portfolio? Crypto investment comes with a lot of risks. The highly volatile nature of many cryptocurrencies is what makes them risky. However, with big risks comes great rewards, and that's why it is a worthy investment.
Today, the value of a coin can go so high you will be tempted to invest in it. By the next day, it has dropped, you get scared about losing your investment. Surprisingly, despite the many twists and turns of the cryptocurrency market, many people still seem to be diving into it. No doubt, this shows that beyond the profits one can make, there's a lot that comes with having crypto in your investment portfolio.
Even top financial experts who are investment cautious still buy the idea of crypto investment. The only difference between these experts and the everyday investor is that they follow the 5% rule. By this rule, you're expected to invest nothing more than 5% of your portfolio into assets with high risks on returns as crypto.
How to Invest In Cryptocurrency the Right Way To Avoid Losses
Suppose you must invest in cryptocurrency, whether Bitcoin or Ethereum; you must know the best ways to go about it. First, you have to conduct in-depth research on the coin you are investing in. You have to read through the analysis and opinions of experts on bullish and bearish patterns. You also have to look into different technical and fundamental analyses to ensure it is a worthy investment.
Another way to invest in Bitcoin the right way is to ensure you can meet your other financial needs even after you have purchased some coins. Other needs here could mean debts accrued, an emergency fund that needs to be sorted, or retirement accounts that need to be maxed out.
Finally, you have to consider Bitcoin price at the time of your investment. If Bitcoin price is low, it is a good time to invest because you can sell or trade it for other assets when its price surges. However, where there is a predicted bearish pattern for Bitcoin price, you need to invest carefully. Alternatively, you can look elsewhere and buy Bitcoin cash instead.
Why Should You Have Crypto In Your Investment Portfolio?
In the cryptocurrency market, a lot is said about the risk of investing in virtual currencies. However, in all of these, are there reasons why you should still invest in these coins? What are some benefits that come with having crypto in your investment portfolio?
Cryptocurrencies are profitable, and they are the future of money.
No matter how volatile any cryptocurrency may appear, the truth remains that many of these coins are profitable. Instead of shying away from digital currencies, you can consider investing between 2-5% of your net worth in them. It is believed that this percentage is one you can lose, and where there is an increase in value, it can cause a financial boom for you.
We live in a crypto-savvy world.
Tech-savvy is not the only word that qualifies the digital world we live in. As digital currencies continue to become a thing, everyone is becoming more crypto-savvy than they used to be many years ago. With this crypto-savviness comes curiosity as well. If you're crypto-curious, you will know that diversification of your investment portfolio is not complete without crypto investment.
As a cautious investor, you can start investing 1% of your net worth in cryptocurrencies while you feed your curiosity. The more knowledge you have of the cryptocurrency market and Bitcoin price, the more of your net worth can be diversified into it. In all of these, ensure you're not investing more than you know of the market.
It is a risk management strategy.
An excellent investment portfolio has a mix of different investment portfolios in it. With this, certain percentages of your entire worth are invested in different assets. While some are invested in stocks, bonds, and commodities, others can be invested in exchange-traded funds and cryptocurrencies despite its volatility.
Diversification of assets is a risk management strategy that ensures you don't lose all your investment at a go. When you have multiple investments, the success of one channel can make up for the possible loss that may occur in another. Interestingly, cryptocurrencies are becoming mainstream. With an understanding of the best crypto trading strategies, you can invest in the over 7,000 cryptocurrencies available.
As an investor, instead of putting all your investment eggs in one basket, you should diversify. Your investment portfolio should be inclusive of multiple investment channels. Of the many channels you should consider, Bitcoin investment is essential. You can use a certain percentage of your net worth to buy Bitcoin cash.