Bitcoin [BTC] is associated with blockchain technology and analysts believe it to have the potential to disturb the current financial infrastructure in a few years. Bitcoin cryptocurrency prices are bullish and it even outperforms other assets in the share bazaar.
Can money be made with bitcoin investment?
Bitcoin is a digital currency and not a physical instrument like dollars and pounds. However, it can be used just like dollars to buy things. The list of retail stores accepting bitcoins is growing. Credit cards can be used to pay for purchases, which get automatically debited from your bitcoin wallet.
When BTC is compared to other real-currency investment options like yen or dollar then the technical analysis confirms that BTC was best performing cryptocurrency in the year 2010 through to 2013 and in 2015. In 2014, its performance was the worst, which exhibits its volatility extent.
Is bitcoin better alternative investment?
Bitcoin value can be denominated in dollar price. It can change its direction based on market conditions. So, it can be perceived as an investment asset. We were told that never invest in anything, whose price is not found in a newspaper or an exchange. Today, you can buy BitCoins 24/7 on worldwide exchanges as well as know its price not just in dollar but even in your local currency.
Bitcoin is not a bond or stock. It is a digital currency getting adapted for making purchases. Investors can view BTC or any other cryptocurrencies as an investment alternative to add to their portfolio. Alternative investment can be defined as an asset besides bonds, stocks or currency. It can help to diversify your portfolio and reduce the overall investment risk.
A key reason to use cryptocurrencies as an alternative investment is that they are non-correlated. It means their ROI is not correlated to bonds and stocks. Therefore BTC investment offers great diversification making your portfolio that holds investments made in other instruments strong.
Professional investors have encouraged adding an asset with a tiny high-risk percentage into your long-term portfolio. Allocating 5% to 10% in high-risk assets can bring high potential returns with just a tiny impact on the portfolio if risk gets big.
Currencies, gold, hedge funds, real estate, and private equity are favored alternative investment types. To determine the existing market value of these underlying investments is difficult but BTC prices can be seen in real-time via online exchanges and tickers.
Bitcoin can trade lower or higher based on demand and interest amongst investors. It has proved to trade significantly higher than its original value, which indicates investors are interested in investing or it is overpriced. After such huge spikes, bitcoins’ underlying value has experienced a normal increase but remember its price can swing widely.
If you are skeptical about bitcoin investment then you can get to know the potential of a blockchain network. It is an underlying infrastructure of BTC. You can invest in stocks of Blue-chip companies that integrate blockchain technology into their businesses. The IBM, R3 Consortium, and Factom are high-cap companies that have recognized the potential of blockchain technology.