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10 Reasons Why Bitcoin Should Be 5% of Every Investor’s Portfolio

Know the 10 reasons why Bitcoin should be 5% of every investor’s portfolio. Bitcoin is a cryptocurrency and a payment system; first proposed by an anonymous person or group of people under the name Satoshi Nakamoto in 2009. In addition, Bitcoin is not subject to government or financial institution control. Instead, a network of computers verifies transactions.

10 Reasons Why Bitcoin Should Be 5% of Every Investor’s Portfolio

10 Reasons Why Bitcoin Should Be 5% of Every Investor's Portfolio

Finally, records for these transactions are in a public ledger called a blockchain. And Bitcoin is unique in that there are a finite number of them: 21 million.

Through a process known as mining, Bitcoins are the reward. Lastly, exchange them for other currencies, products, and services.

Investors should consider allocating at least 5% of their portfolio to Bitcoin because it is a new asset class with great potential. Bitcoin has many advantages over other assets, including its decentralization, scarcity, divisibility, speed, security, and store of value.

While some risks to investing in Bitcoin, such as volatility and regulatory uncertainty, for many investors, the potential benefits outweigh the risks.

Why Bitcoin Should Be 5% of Every Investor’s Portfolio

Some reasons include:

1 – Bitcoin is a digital asset and a payment system

So, it is often referred to as a cryptocurrency due to its decentralized, immutable nature, and censorship resistance. Bitcoin is the first and most well-known cryptocurrency, with a market capitalization of over $200 billion as of June 2020.

Digital currencies believe they will become household names, payment systems, data collectors and even hospital and insurance protections for private networks in the years to come. Bitcoin is the frontrunner for the whole crypto space and the most known cryptographic currency seen to market value and popularity.

2 – Bitcoin is not subject to government control

Secondly, Bitcoin is a digital asset not subject to government regulation. This means that it is not subject to inflation or other economic factors that can devalue traditional investments.

Additionally, Bitcoin is a decentralized asset, meaning it is not subject to the whims of central banks or other financial institutions. Moreover, this makes it a more stable investment than stocks or bonds, which are subject to the actions of central banks.

Finally, this decentralized structure enables Bitcoin to be used as a censorship-resistant store of value and means of payment.

3 – Bitcoin is scarce, with a limited supply of 21 million

The cryptocurrency is scarce, with a total supply of 21 million BTC. This scarcity gives Bitcoin value as a store of wealth and means of payment. The limited supply of Bitcoin also makes it an attractive asset for investors, as the demand is likely to increase as its supply remains static.

Scarcity is here to combat inflation, and due to the limited supply of BTC in circulation, the coin is, in fact, deflationary. But, of course, this is every investor’s dream, and it’s also what has kept the leading cryptocurrency on a 10-year+ bullrun (with the exception of some larger pullbacks along the way).

4 – Reasons Why Add Bitcoin To Investor’s Portfolio: Bitcoin is divisible, so it can be used for small or large transactions

In addition, Bitcoin is divisible. The smallest unit is a satoshi. It is equal to 0.00000001 BTC. This divisibility enables Bitcoin to be used for small or large transactions. For example, a satoshi can purchase a cup of coffee, or it can be used to purchase a car.

While it is still quite complicated and expensive to trade with BTC, developers are working day and night to fix scalability issues. Once the coin becomes fast and cheap enough, there is nothing to stop it from reaching a global market.

5 – Bitcoin is fast and efficient for international payments

Furthermore, it is fast and efficient for international payments. Bitcoin confirms transactions in 10 minutes and can process 24/7. Thus, this makes it an ideal asset for international payments, as it is not subject to the same slow and expensive banking processes.

6 – Bitcoin is secure, with state-of-the-art cryptography

The cryptocurrency is secure. Bitcoin uses a proof-of-work system to secure the blockchain, which makes it resistant to hacks and fraud. In addition, it stores all Bitcoin transactions on the blockchain, a public ledger that can verify the authenticity of a transaction.

As private persons educate themselves on how to send transactions over the blockchain and keep their wallets as secure as their bank accounts, it will propel the crypto market a huge step forward.

7 – Reasons Why Add Bitcoin To Investor’s Portfolio: Long-term Bullish

Bitcoin is in a long-term bullish trend for a few reasons. First, the asset has shown a strong ability to recover from dips in price. After each dip, the price has risen to new all-time highs. This shows that there is strong demand for the asset, even at lower prices.

Second, the long-term trend of Bitcoin’s price is upward. This is evident by looking at a price chart, which shows that the asset has consistently gained value over time. Finally, the price support is increasing through institutional investment and mainstream adoption. So, more businesses are beginning to accept Bitcoin as a form of payment, which is helping to increase the price.

8 – Uncorrelated with nearly every asset class

Bitcoin is uncorrelated with nearly every asset class. This is because traditional factors such as inflation, interest rates, and government policy do not influence Bitcoin.

Instead, supply and demand are the two drivers. When demand increases, the price goes up. In contrast, when demand decreases, the price goes down. This makes it a very volatile asset, but it also means that traditional factors do not influence it.

9 – Reasons Why Add Bitcoin To Investor’s Portfolio: Emerging technology

Bitcoin is an emerging technology with a lot of potentials. It has the potential to revolutionize how we interact with the digital world. With its decentralized nature, it has the potential to bypass traditional financial institutions. Additionally, it has the potential to reduce fraudulent activities.

10 – Reduces overall portfolio risk

Bitcoin reduces overall portfolio risk because it is not correlated with other asset classes. This means that when other asset classes, such as stocks or commodities, are performing poorly, Bitcoin may be doing well.

Finally, this diversification can help to protect your portfolio from losses.

Investing in Bitcoin is a high-risk investment. The price is volatile and can go up or down quickly. Therefore, you should only invest money that you can afford to lose and use proper risk management.

How Bitcoin performed from 2012-2021 compared to other assets

From 2012 to 2021, Bitcoin performed better than most other assets, including stocks, bonds, and gold. In 2012, one Bitcoin was worth about $13.50, and by 2021, it was worth over $63,000.

That means that if you invested $1,000 in Bitcoin in 2012, your investment would be worth over $460,000 today. Additionally, that is a return of over 46,000%. In comparison, the stock market has returned about 15% over the same period, and gold has returned about 5%.

Different investment products for Bitcoin

Bitcoins ETFs, ETNs, Funds, and Crypto Exchanges are all excellent investment products for those looking to invest in Bitcoin. Bitcoin ETFs offer exposure to the price of Bitcoin without the need to actually purchase or hold the cryptocurrency. Trusted operators are few, but those who have reached the biggest audience can generally be trusted to back your money up in the case of theft. Coinbase is the most secure and well-established platform among these names.

ETNs provide access to the price of Bitcoin through traditional financial markets. Additionally, a financial institution backs them up. Funds are similar to ETFs, but a professional fund manager controls them. Crypto exchanges allow investors to buy and sell Bitcoin and other cryptocurrencies.

The post 10 Reasons Why Bitcoin Should Be 5% of Every Investor’s Portfolio appeared first on Visualmodo.

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