Is it too late to invest in Bitcoin?
Bitcoin’s price has been climbing from RM 40,000+ to RM 204,900 from Oct 2020. Many people now are becoming more interested to know more about Bitcoin and asking whether it is too late to invest in Bitcoin. After Elon Musk tweeted that the electric vehicle maker would suspend car purchases using bitcoin, Bitcoin price slid.
When considering Bitcoin as one of your investment tools, you need to examine your own risk tolerance. As explained before in previous newsletter, Bitcoin has no fundamental. It is like currencies, the value is determined by the supply and demand for the said currency. Hence, the volatility is great. If you are investing in crypto currency, you must be ready to risk your capital. Bitcoin has dropped its value from RM15,000++ to RM10,000+ based on history record. Losing most of the value over short period of time is hence not uncommon.
However, there are few reasons you can consider investing in Bitcoin:-
- Diversification from your current investment portfolio: Crypto is also considered as one of the digital currencies that might be used in the future.
- Hedge on inflation: currently the inflation is high as dollar is depreciating much in value due to too much printing of money. Putting some monies into crypto can be a hedge on inflation.
- Massive returns on swings: as crypto’s volatility is high, if you can time the entry and exit, you might profit from the volatility.
Bitcoin’s price dropped again. Is it the right time to invest? Up to you.
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