It’s difficult to say whether the time is ripe to acquire bitcoin when the overall market is going through a difficult phase. At the same time, there is also some interesting question whether the digital coin could hedge risks coming from the stocks market since it has been increasing steadily over the years.
Similarly, some people wonder whether it is worth investing in the virtual asset for retirement plans. At the end of it, it is the reasoning that should guide investors whether to buy and if so how much.
It is tough to say whether bitcoin could hedge stocks market risks. That is because it is also speculative, which meant that it has the potential for both increasing and crashing. At the same time, there are some who bets the digital coin as the next big thing though there are several other risky assets too. In any case, it could add risks to investments portfolio since risk might also pay off sometimes.
There are some experts who think that bitcoin is uncorrelated with the stocks market and is a valuable emerging asset class. Similarly, while it provides some diversification to a portfolio, it also reduces risk factors though there are skepticisms. That is because the crypto-coin has been there only from 2009 and it has remained highly volatile with sharp ups and downs. Therefore, it is tough to correlate with the stocks market and say it hedges the risk factors until there is a sustained fall in stocks.
Amount of Risk
The current atmosphere suggested that diversification in crypto investment is only speculative. Therefore, it is left with investors to decide on the quantum of risks to be taken from the available amount. In short, the emerging asset class cannot be compared with the yellow metal that is often viewed as an alternative investment to stocks.
At the same time, bitcoin could become a valuable thing if the American Greenback fails to hold its dominance or in the event of severe inflation. Similarly, if anyone wants to have privacy, the ideal instrument will be bitcoin.
Got some Bitcoins?
While cryptocurrency investors and traders are chattering about many positive indicators within cryptomarkets it might be a right time to consider buying some digital assets as upcoming Q4 of 2018 promises some action.
To be specific – current scenario for cryptocurrency is more positive than negative, however, no one knows how markets will behave tomorrow. If things go as expected and cryptomarkets will attract institutional investors – you better be sure to have some Bitcoin in your porfolio. Of course, don’t even try to invest more than you can afford to lose.
Cryptocurrency eliminates any financial walls globally. It is only a matter of time when institutions join decentralized ecosystems and then institutional FOMO becomes real. At a current stage, steady digital assets accumulation is a right thing to do. If you still have some major doubts just check what professional cryptocurrency traders think about Bitcoin’s near future. Stay safe.
Please note: Cryptovibes.com is not a financial advisor. This article presents an individual author’s opinion and does not endorse any decisions.