Investing goals have always been subject to market risks. Assumedly the risks magnify manifold when you are considering investing in cryptocurrencies such as Bitcoin.
Despite certain risk assumptions being factored into such investments, the question of ‘how much’ of an ideal portfolio should consist of non-government currency investments will bother every crypto investor.
The thumb rule to follow ideally, recommend investment gurus, is to consider your true investment goals – your capacity for risk, your perceptions of cryptos as privacy-assets, or as consider cryptos as ideal payment method if you are cyber attacked, ever!
Bitcoin as Privacy Assets – 40% of your Portfolio
When your primary goal in crypto investment is the unique feature of privacy protection, then your ideal portfolio should hold nearly 40% of your investments in Bitcoin or altcoin.
But this type of holding would have true value for you, only if you are not happy to use credit cards as payment instruments. This is assuming the latter do not offer adequate privacy as bitcoin ideally would.
However, if you are focused in building your bitcoin portfolio there are bigger pitfalls – volatility. Bitcoin investor community has found that the huge differences between price rise and fall nullifies any profit made.
Bitcoin for high profits – 10% of your portfolio
If your interest in bitcoin investment is the higher prices it would fetch over the US Dollar, then you should look at holding 8% to 10% of your ideal portfolio in bitcoin.
Despite the understanding of bitcoin’s ‘speculative’ tendency, investors should understand that it does hold an edge if the risk factor does pay off. Investors in bitcoin in 2016-17 reaped the benefits when bitcoin prices grew to explosive prices of nearly $20,000. However, since 2018 January the fall in prices to as much as $6,500 is also an illustration of the ‘high-stakes’ game which bitcoin currently is, given it is yet part of an unregulated market.
Bitcoin as Your Ransom Payout: 5% of your Ideal Portfolio
Owning bitcoin for many investors is also about hedging for the final cyberspace doomsday. For such investors owning bitcoin to pay for ransom-demands seems a better investment plan and advertises as ideal insurance against cyber criminal attacks.
In probability as the world becomes a web of internet connections, playing safe against cyber attacks and hackers is a long concluded necessity.
Bitcoin investments are not just lifestyle trends but in the long term could prove to be the ‘mainstream’ alternate payment system.
