- Do you know how you can gain the maximum returns as an investor by investing in the financial asset class, Bitcoin?
- Are you aware that Bitcoin is one of the highest delivering growth investments in recent months and years?
- Have you thought about how much of your investment portfolio should Bitcoin occupy in 2021 in terms of percentages?
You do not need to be very smart to invest in Bitcoins. What you need to possess is the willingness to take action and not be a fence sitter like some others.
It stands to reason that the world has never seen a financial asset deliver in the same fashion as Bitcoin has. It has made eighteen-year-old millionaires in a matter of months. It has also made young millionaires transform their fortunes by adding billions, all within a year’s time.
So, the question, which then arises is- how much of your investment portfolio should be made up of Bitcoins? In this article, we will look to exactly answer this by taking help from experts and analysts.
Diversifying your Investment Portfolio with Bitcoins: Risk versus Rewards
Let us start by addressing the elephant in the room. Yes, Bitcoins still suffer from instability. This has traditionally made them an unfit investment, at least for institutional investors who prioritize safety in these areas.
However, a new breed of investors, those who are willing to take the risks and earn the rewards are making their way to the field. They realize that by allocating small amounts as investments, they will be able to ride high during Bull Runs.
Many people also hark back to the history of volatility and point out that the same still continues. Not quite. In 2020, there are a lot more institutional investors propping up the Bitcoin and crypto ecosystem much in the same fashion as the Stock Markets.
Governmental Regulations too seem to be a bit on the friendly side, with increasing attempts being made to formalize adoption by banks and other financial institutions. In this way, Bitcoin as an investment option is not the same as it was some years back.
It definitely is much more mature, safer, and stable, almost like a traditional financial investment asset.
Investments in Bitcoin: How Much Is Too Much?
Let us start with a blunt proposition. You should only invest in Bitcoins!
Just diversify your portfolio to include Bitcoins as the only crypto. This is because Bitcoins is an undisputed leader of the ecosystem and will stay the same for the next many years comfortably.
Yes, a new and improved coin might replace Bitcoin in the future, but that is quite a distant future as things stand now. This means that investing in Bitcoins is a safe and secure bet.
Analysts point out that in 2020, investing 10% of your entire portfolio in Bitcoins might be sensible. Investing 10% is not at all a risky proposition.
Worst case scenario- if your investments tank in Bitcoins (which they will not), your losses would be minimal. In any case, your other investments in gold, stocks, etc. will be able to balance out the same.
However, if you are lucky enough to ride a Bull Run in Bitcoin (as is expected in January 2021) you are going to grow your investment as much as five to six times!
What a Bitcoin Investor should expect in terms of Investment?
According to analysts over at Bitcoin trading software, every investor in Bitcoin needs to be prepared for the worst.
The simple answer is that Bitcoins still lack formal mainstream acceptability. Yes, slow progress is being made in that regard. However, one thing is for certain- the rewards of investing in Bitcoins in 2020 far outweigh the risks!
A Bitcoin investor should always be on top of their game. Knowing about the latest happenings, news and announcements can be instrumental in finding out more about where your next fortune is going to come from.