Cryptocurrencies such as Bitcoin and Ethereum have been giving huge returns on investment, and as per the reports of the last few years, it easily beats all the other forms of investment. With such benefits, it is now getting the attention of retail investors too, but the point is not all investors are successful with cryptocurrencies.
According to a recent poll by Financial Express showed that around 40.6% of investors accepted that cryptocurrencies are too risky to invest in, whereas 37.7% of investors stated that they don’t understand the market. Another 14.9% expressed that they would get in for quick gains and the remaining 6.9% went with option Works as a SIP.
This clearly states that many people do not understand what it means to invest in cryptocurrency.
CEO of cryptocurrency exchange Bitbns, Mr. Gaurav Dahake said that a lot of people signed on during Bitcoin's first big bull run in 2017 and 2018, but nearly 90 percent were out in a very short period. However, in March, the Supreme Court overturned the RBI circular in which financial institutions and banks were barred from conducting cryptocurrency, with many investors holding back.
Bitbns claims a daily trading volume of around $50 million and features 75+ cryptocurrencies. And people can invest in fiat currency. Dahake further said that What was the overall trade volume in a month before March 2020 is now happening in just one day. Interest levels in bitcoin are rising, but they will soon taper.
How to start investing in Cryptocurrency?
Many experts advised caution while starting investing in cryptocurrencies, SIP (Systematic Investment Plan) type of investment makes sense for most people. In the past, people invested in a lump sum at various price points and were badly faced losses when bitcoin fell.
Other Investors who chose to go with ICOs (initial coin offerings) of other cryptos also lost their money around 95% of ICOs which were a rage in 2017 they didn’t materialize.
However, it is still a very beneficial investment option and it is beating mutual funds, bank fixed deposits, Sensex and Nifty returns over a three-year horizon if one chooses the SIP route. In countries like India, there are still several cryptocurrency exchanges such as UnoCoin, WazirX, Zebpay, BuyUcoin, CoinDCX, etc.
Experts also stated that the more exchanges the more users they will attract. But it is also observed that with only 900 odd Bitcoins being mined daily demand is increasing and so the price is increasing.
Bitcoin has a limited supply of 21million of which around 18.5 million has already been mined, and one more problem is that a significant amount is lost forever due to the missing keys of wallets.
Due to the institutions investing in bitcoins, it is now under great ups and downs. Kshitij Purohit, lead currency and commodities at Capitalvia Global Research, said that Many multinational players have come into the market and are investing some of their customers' money. Hedge funds are also hedging their portfolios against inflation in bitcoin. Earlier, they used to hedge against inflation by making investments in gold.
Funds are selling bullion and buying cryptocurrencies, which makes the future significantly faster. Bitcoin can consolidate between $ 30,000 to $ 35,000 in a short period for a month but will profit after that.
How much to invest in cryptocurrency?
It is an important question and people who have knowledge of this field suggest that “Do not look at quick gains, although you will get short term gains. Still, you should go for the medium to long term Investment. You can check the three-year performance of cryptocurrencies, and it is very clear that you will not be at a loss if you choose to invest for a longer period.
You can take an example of Etharium it is beggest after Bitcoin, it works on a decentralized network and whenever someone builds on the network, more ether is used, and makes ethereum more tangible.
Dahake responded in this matter that “Actually, learning about crypto is not easy. In general, markets tend to value things based on perception. Even with equity, while it is tangible, but sometimes you cannot justify valuations. Look at what’s happening with Tesla”
So how much of a person’s portfolio should be invested in cryptocurrency?
Experts recommend filling around 25 to 30 percent of one's portfolio with cryptocurrency investments for good returns. Another 10 to 15 percent should be poured into precious metals, especially silver, as there is strong industrial demand. They also suggested putting about 30 to 35 percent in equities and about 15 percent in debt funds.
They also added that anyone who wants to get into crypto investing must start with Bitcoin, even it is costly. One more thing is that soon financial institutions will create a huge competition because they don’t want to stay behind their global counterparts, and then the market will converge with investors.
Many experts believe that Bitcoin would cross $100,000 per BTC by 2022, thus by the end of this year, people will start to treat BTC like gold.
That’s it for today here. You should consider all the advice and suggestions that industry experts have provided and covered above. in cryptocurrencies like bitcoin you should focus on medium to long term investment and if you are looking for a profitable project and coin for investment then PowerCorp will be a great choice.
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