How can you be sure that the Bitcoin is a good investment option? All cryptocurrencies in general, including the Bitcoin, have been embroiled in controversies ever since their inception. On the one hand, they appear to be legitimate since their value is determined by a blockchain shared across multiple computers but independent of any government or institution. On the other, crypto assets seems to be attractive for illicit purposes and have been used in the past for drug and weapons trafficking and money laundering. So, is Bitcoin a good investment according to experts?
The current pandemic and the turmoil in the world of finance have forced investors to assess whether crypto coins, like the Bitcoin, can prove to be a safe haven for them. According to a Japanese analyst, demands amongst investors for the Bitcoin have been high in the wake of the Covid-19 outbreak. This pandemic has triggered an unexpected economic crisis; it is even being compared with the Great Depression. Many traditional investments crumbled as a result and investors have been desperately searching for secure and stable assets. In such a precarious and uncertain situation, crypto assets offer exciting investment prospects.
According to a Japanese analyst Oishi, CEO of Bitcoin Lab, the demand for crypto coins like Bitcoin in the post-pandemic phase is expected to be high because the stock market is likely to lose its appeal as company products experience a steady fall in demands leading to decline in profits. So, investors will be tempted to try out other investment avenues. He also feels that Bitcoin and other crypto coins will be a good investment as there is minimal correlation between these and traditional investments. The bitcoin trade is also on the rise due to usage of trading bots such as bitcoin trader, for which the local bank account must be linked with the profile of the dealers, for trading. Finally, one more reason why investors can take a bigger interest in crypto assets compared to other assets in that amongst uncorrelated assets, the one which investors have not yet incorporated into their portfolio is the Bitcoin.
According to Grayscale Investments, the earnings in the first quarter of 2020 shows that capital in-flow to the tune of $500 million has happened in crypto investments. Almost 88% of investments have been made by institutional investors; this shows that investors have not lost interest in digital currencies, and it is expected that the demand will soar after the pandemic is over. No surprises then why many financial experts and analysts are recommending investing in Bitcoins. According to Robert Kiyosaki, author of Rich Dad Poor Dad, the dollar is dying and people need to invest in Bitcoins.
Financial experts like JPMorgan suggested in a report in February of this year that the crypto market is growing and trading by institutional investors have become important. Cryptocurrencies can hedge against an unprecedented environment where people are losing confidence in domestic currencies. According to Palihapitiya, chairman of Virgin Galactic, at least 1% of your portfolio should be allocated to Bitcoins. Similarly, Galaxy Digital chairman Novogratz has been pointing out that the time to buy Bitcoins is now when central banks are printing so much money.