A maturing cryptocurrency market and stellar returns in 2019 have seen digital assets make their return as an investment vehicle. Thanks to a new survey by Bitwise management across 400 financial advisors, advisors allocating crypto to their clients will rise to 13 percent in 2020. This is all the way up from 6 percent in 2019. From the figures, cryptocurrency is winning as an alternative investment asset.
According to Dr. Morgan Shi, cryptocurrencies have the highest long term upside. During an interview with Coinspeaker, Shi demonstrated that if someone invested $1000 on Bitcoin in 2009, at least by now that would be an equivalent $28 billion.
It is clear that the rate of growth and the percentage returns are astronomical. Positioning Bitcoin as the most profitable alternative investments for the past 100 years. Infact, the Bitwise poll pointed out that 54 percent of the financial advisors favored cryptocurrency due to its returns.
Dr. Morgan Shi, a self-made millionaire and an expert in risk management also suggested capital markets as an important investment asset. He gave the example of Li Ka-Shing’s Yangtze Industrial Co, whose stock has multiplied 5,000 times in 48 years.
Shi noted that if someone had invested $1,000 on the firm in 1972, that would be a whopping $5 million now. The wake of cryptocurrency investing has led many investors questioning how much of their portfolio should be crypto?
Generally, financial advisers will say at least a 5 – 10 percent alternative investment on the portfolio. Remember alternative investments do not only guarantee cryptocurrencies but also any non-correlated assets. Assets whose performance diverts from traditional asset classes like bonds and stocks.
Morgan Shi states that the cryptocurrency arena will have the most profitable projects in the foreseeable future. However, he suggests that investors should learn to weigh in between discernment and risk-taking.
Most might feel that the cryptocurrency market isn’t mature enough. However, the key attraction for cryptocurrencies is in the long term.
“Don’t Invest More Crypto than you can Afford – Jacob Eliosoff
Many investors will mark 2017 as the year they wrote off bitcoin and cryptocurrency as effective investment assets. Following the 51 percent market crash, the majority of investors sought other ways beyond crypto to diversify their portfolio. The price of Bitcoin was skyrocketing each passing day and investors poured in millions of dollars.
Buzz was full of fortnight millionaires before the market came tumbling. Initial Coin Offerings turned to scams and scores of investors lost their money. As a result, this would attract regulatory scrutiny and create the dub of “bitcoin as a hub for criminals”
Some starters in the industry even lost student loan money after they’d staked their hopes on crypto.
A cryptocurrency fund manager Jacob Eliosoff insists that people should only invest in crypto what they can afford to lose.
This is a crucial principle for investors, who might be tempted to pour massive amounts of savings during a market boom.
Shi also highlighted his reallocation strategy as what enables him to reap more profits as an investor. He said:
“becoming a”keeper of the wheat field” in the world of investment. To me this means I reallocate my primary investments about once every ten years to let things grow to harvest and to see where others have died off.”