Since the launch of bitcoin (BTC) in 2009, the market for digital assets, and specifically cryptocurrencies, has developed into a thriving, multi-sector ecosystem. There are, however, some persistent myths concerning the possible dangers of investing in digital assets. This article seeks to dispel these myths and offer a clearer picture of the investing environment for digital assets.
In the beginning, volatility is not always a bad thing. While it is true that digital assets’ prices can fluctuate significantly, there is still a chance for gains in the long run. A well-designed investment portfolio can take advantage of volatility by placing periodic rebalancing and buying and selling orders at specific levels, which are determined by professional advisers.
Second, there isn’t always much danger associated with digital assets. A diversified, well-balanced portfolio can reduce concentration risk and serve as a hedge against inflationary conditions. While minimising negative risk, a typical allocation of 2% to digital assets can offer tremendous growth potential.
Finally, the use of digital assets is expanding, with even risk-averse investors getting exposure to the market through well-known companies that are using disruptive technology. For instance, the leader in global payments, Visa, has disclosed an increase in the range of stablecoins it can settle. Although the market for digital assets is still young, there are many fascinating use cases and investment prospects.