Why Serious Investors Need Bitcoin in Their Portfolios


Why Serious Investors Need Bitcoin in Their Portfolios

Bitcoin has been gaining a lot of positive media attention over the past few weeks. Investors are looking at cryptocurrency as a valuable portfolio diversification method. In fact, bitcoin should be in everybody’s portfolio, according to some experts.

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Bitcoin offers some exciting traits that other investments do not. In these days of financial turmoil and crashing stock markets, investors are looking for safe havens. Even though bitcoin is not a safe haven in the traditional meaning, cryptocurrency belongs in everybody’s portfolio.

Storing Value

For the longest time, people have seen bitcoin as an investment vehicle. In fact, cryptocurrency is referred to as a store of value these days. Due to its scarce nature and the free market, bitcoin has the potential to increase in value. Moreover, since price volatility has quieted down a bit, downward price pressure is far less frequent than before.

That does not mean there won’t be bearish trends in the market, though. But looking at things from a seven-year perspective, the only way has been up.

As more investors and individuals get interested in Bitcoin, the value per BTC should continue to increase. There is a fixed supply of bitcoins, and the majority of them have already been created. However, the rate of growth will slow down once the Bitcoin halving takes place in a few days from now.

Hedging Against Financial Turmoil

Bitcoin Values Investors Portfolio

One thing investors may be more interested in is how bitcoin can be used to hedge against economic woes. Since cryptocurrency is not influenced by banks or governments directly, regular markets have no direct impact on Bitcoin. Other than gold, bitcoin is the only store of value to gain significant value since 2009.

More importantly, Bitcoin does not need a broker per se. Interested parties will have to acquire Bitcoin through an exchange or peer-to-peer trading.

Keeping private keys of a bitcoin wallet address secure will ensure funds cannot be taken by anyone else. Users are in full control of their money at any given time.

Global Utility Value

Any form of money can only gain value if it has utility. Bitcoin, unlike gold and other forms of money, allows for global utility. Cryptocurrency doesn’t require an intermediary service to be used either, as transfers are conducted in a peer-to-peer manner.

People may argue gold is a global currency as well, but they would be mistaken. No one uses gold to pay for goods or services these days. It is a store of value, sure, but that is far as its usability in pure form goes. The average person will have zero utility for gold unless they make jewelry or use it to preserve value. Plus, transporting gold in a convenient manner is completely out of the question.

One Versatile System to Trump Fiat

Another thing Bitcoin has going for it is how it is one complete system to complete all financial tasks. Sending and receiving money without limitation is one possibility for Bitcoin users. The cryptocurrency also allows for frictionless cross-border payments anywhere in the world at any given time.

When dealing with fiat currency, consumers and merchants have to deal with change. Small coins are annoying to deal with at best, and they have very limited usability. Bitcoin handles change automatically, with everything taking place in a digital form. No intervention is required, no coins or bills are needed, and it removes the friction of cash transactions.

But there is more, as bitcoin transactions do not expose customer information when making a payment. Card transactions, which also remove change returns from the equation, relay sensitive personal and financial information with every payment. Bitcoin offers users privacy when making purchases in both the online and offline spaces.

Investors Want Profit

Last but not least, everybody wants to improve their financial situation. Stock markets used to offer that opportunity, but things are looking worse than ever before. Bitcoin, on the other hand, will continue to increase in value over time. It is important to keep in mind cryptocurrency is a long-term investment. Investors and individuals looking for quick profits may want to rethink their strategy before buying bitcoin.

Financial experts have started referring to Bitcoin as the “Internet of value.” Its underlying technology can store other financial instruments, such as assets or tokens.

That said, Bitcoin is gaining in popularity in the offline world as well. The number of Bitcoin ATMs continues to increase all over the world. More merchants are accepting Bitcoin payments in their stores. Bitcoin should be a part of any investor portfolio sooner rather than later.

What are your thoughts on cryptocurrency in investor portfolios? Let us know in the comments below!

Source: Huffington Post

Tags in this story
Diversification, Hedging, Investors, Profit, store of value

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Jean-Pierre Buntinx

Jean-Pierre Buntinx is a freelance Bitcoin writer and Bitcoin journalist for various digital currency news outlets around the world, Jean-Pierre also has a keen interest in Fintech and technology, and he is always open to new challenges.

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