Even after constant warnings by different regulatory authorities and the huge volatility and risks the asset class carries, investment in bitcoins and other cyptocurrencies is only gaining popularity. It may not be far that after being regulated by the authorities, cryptocurrencies become the mainstream investment class.
So in light of the current market dynamics, how much money you should allocate to this asset class which is feared to cause an asset bubble in not so far off time.
Start small in the cyptocurrency: As investors can make bids for a fraction of these newly emerged digital currencies, you can allocate 1% of your total portfolio towards digital currencies as a beginner. So, it is not essential that you invest in a unit of bitcoin. First you can well acquaint yourself with the process of holding and trading in it and then gradually depending upon your risk appetite as well as investment goals can up your investment in bitcoins.
Another strategy is buy virtual currencies at dips or buy invest as in SIP: Feared to cause an asset bubble,, bitcoin in the international markets recorded the worst week in price since 2013 last week with prices hovering below USD 12000.
Invest as much you can afford to lose: With huge surge in bitcoin rates by many folds from the beginning of the year till date, correction in price can come at any time which is to an extent also attributed to speculation in the market. So to be safe amid a highly volatile market, take caution with only small bets intially.
Herein, some of the key cautions that you need to take while investing in cryptocurrencies is that you need to keep the provided key safely as without it you shall not be able to retain your digital currency investment. There is no recourse to it so first understand the nitty gritties of cyptocurrency investing which varies to a great degree from other conventional asset classes.
With limited supply as bitcoins can be minted to a limited extent, market cap of bitcoins have even managed to surpass US giant companies including American Express and Starbucks lately. And with massive market capitalization value that is seen scaling high, these virtual currencies qualify as safe investments, so you can surely take a call in bitcoins but with high caution.