Cryptocurrency is rapidly gaining popularity in Africa and people are beginning to invest in it. For most countries in the world, fiat has failed the people and it is easier for people to turn to cryptocurrencies. Countries like Venezuela, Zimbabwe, Cambodia and even South Sudan rely on an alternative source of money besides the countries currencies.
But then, despite the fact that cryptocurrency looks like an attractive investment choice, its volatile nature has got some governments issuing warnings to its citizens about investing in it. However this has not stopped people from investing in cryptocurrency. However, the question most people ask is how much should I invest in cryptocurrencies?
Look Before Taking a Leap
The first thing any crypto investor should have at the back of their mind is that all investments carry their own set of risks and reward variables, and digital currencies are no different. The next thing any would be investor should do is to research.
The next step is to start small. Any crypto investor that’s a newbie should not expect to become a whale overnight so just invest in a small fraction of a particular cryptocurrency. Get use to the process of buying, selling and storing your crypto with just a small sum. If you make a mistake you can lose your money in an instant. If you send bitcoin to the wrong address, it’s gone. So start small to grow big
Do Not Invest More Than You Can Afford to Lose
Cryptocurrency is volatile in nature, bitcoin rose as high as $20,000 last year and its worth $8,198.30 as at the time this article was written. So if you wake up and discovered that your entire crypto portfolio was down, you’d be fine financially. It would hurt, but you definitely wouldn’t be in a disastrous situation.
What Your Portfolio Should Look Like
Well, Bitcoin is the first cryptocurrency and most cryptocurrency portfolio would likely contain a sizable portion of this digital crurrency. The other cryptocurrencies that should be in your portfolio should offer solutions that should keep them relevant for long. For instance, Ethereum has its blockchain built in such a way that it can be applied to other industries and is not only limited to cryptocurrencies. Ripple, on the other hand uses a global consensus ledger and is popularly referred to as the bank cryptocurrency as it is increasingly being used by major banks and finance houses across the world.
The Stansberry Churchouse Research suggests that at least the minimum percentage of your saving portfolio that should be dedicated to crypto depending on your experience should be 1% and the maximum 5%. However this is subject to your experience in the space.
Cryptocurrency is gaining momentum continually and you you shouldn’t ignore it as you consider diversifying your investment portfolio.
What do you think about including cryptocurrency in your investment portfolio? Share your opinion with us in the comment section below.
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