Every potential Bitcoin investors have such questions in mind, and of course, they are veracious to think before any investment decision. Bitcoin is a cryptocurrency. It is traded digitally across the countries, and many big investors have invested in cryptocurrency or its related projects. Since you are thinking of buying Bitcoin for the purpose of investment then it should qualify the terms for return as well. Thus, we will try to explain below for the inclusion of Bitcoin to your portfolio.
What is Bitcoin?
Bitcoin is a very popular cryptocurrency that was launched on 18th August 2008, and it is supposed to be created by Japanese citizen Satoshi Nakamoto. Bitcoin is popular due to high security, digital format, peer to peer secrecy, low transaction cost, and less transaction time. Bitcoin is used across the world for buying product or services, and there are numbers of Bitcoin ATMs are installed in many countries. However, there is no central party or government involvement for such a transaction. Besides the Bitcoin, many cryptocurrencies have been running in the crypto-world, commonly known as Altcoins. Such coins are based on an open ledger system that can be validated by numbers of nodal computers and are immutable to re-edit anything if a data is entered or transaction is done.
Historical Performance of Bitcoin
The market cap of Bitcoin was almost slow or stagnant up to 2016. It grew well in 2017, and investors got engrossed in Bitcoin. After that, its price went up historically very high, which was above $1800 per coin, and in the same year, the Market Cap of Bitcoin was recorded over $300B. At the start of 2019, it was kept on following the bearish trend. However, Bitcoin leaped again at the end of the same year to $12000 and the market cap was recorded above at $200B.
Today, its market cap reached $134,336,940,461 while the price per coin is $7,414.02, and we know that the total supply of Bitcoin is $7,414.02, and 18,119,300 has been supplied till now. Due to the presence of other digital currencies, investors are also buying them because of their rate becoming cheaper and the functionality becoming similar.
Assessment for Investment Portfolio
An investment portfolio is a basket of assets that can hold shares, bonds, cash, and more, which has the motive to have calculated return on investment. Portfolio managers have the mindset to invest in the right assets so it can either minimize the risk or can provide assured returns with time. If you observe the price history, you will get the idea that the price of Bitcoin is so much volatile, like gold or other forex assets. So it is similar to other financial assets that can be included for the investment portfolio. Moreover, under the rule of the contrarian portfolio investing technique, when the assets are undervalued, the investors think it is the right time to buy the asset. When the price of Bitcoin is at its lower level, then the portfolio manager may buy. We can also observe that Bitcoin is trying to get a bullish trend, and the price of Bitcoin has gained at the end of 2019 as compared to the start of 2019.
As above, we have discussed all the scenarios of Bitcoin appropriateness in portfolio insertion. Bitcoin is cryptocurrency by nature, and the king of cryptocurrency and its values are volatile like other financial assets. When the values are volatile, there are chances of making money if portfolios are managed professionally. As far as Bitcoin is concerned, you should wait for bullish trend technically before an investment decision. Likewise, we have also observed BREXIT and other upcoming economic events that will influence the cryptocurrency market in some manner.