The very fact that you are reading this article shows that you are potentially interested in investing in Digital Assets. These immutable and exchangeable cryptographic tokens promise to become hard and non-manipulatable money for the whole world. Their advocates see a future in which Bitcoin or other Digital Assets will substitute Euro, Dollar and so on and create the first free and hard world currency. Even major central banks are looking at the case for issuing their own digital currencies, the Bank of England and European Central Bank said, amid a growing debate over the future of money and who controls it. Central Bank of UAE signed an agreement with Saudi Arabia to start preparing a digital currency, which will be used to enable banks of these two countries to perform faster transactions than using the old-fashioned SWIFT system.
Investing in Digital Assets requires a different belief system. Digital Assets isn’t just an investment, it’s a belief system. And that foundation will allow you to develop a new tolerance level for “very low” lows and potentially “very high highs”.
Besides what was already said, there are three major good reasons to invest in Digital Assets.
First, because you want to hedge your net-worth against the fall of the Dollar imperium, which is assumed by many people to inevitably happen at some time. Second, because you support the social vision behind Digital Assets – that of free and hard money for the whole world. Third, because you understand and like the technology behind it.
However, many people fall victim to the hype surrounding some Digital Assets-bubble. There is always somebody captured by FOMO (fear of missing out), buying massively in at the peak of a bubble, just in the hope to make quick money, while not understanding Digital Assets at all. That’s a bad reason. Don’t do this. There are laws that govern the blockchain technology and how these tokens are created and traded.
A Fidelity survey of 774 institutional investors found that more than one-third of firms worldwide have invested in digital assets. While 36% of institutions own digital assets globally, multinational financial services company Fidelity found that 27% of the 441 USA institutions surveyed have made investments into digital assets – that is up from 22% last year. Close to half of European institutions are long on digital assets.
While many institutions are yet to pull the trigger on Bitcoin and other digital assets, six in ten respondents now “believe digital assets have a place in their investment portfolio.“ Fidelity stated, “These results confirm a trend we are seeing in the market towards greater interest in and acceptance of digital assets as a new investable asset class.“
Looking 5 years into the future, 91% of respondents indicated that they expect part of their portfolio to comprise digital assets.
In early May, billionaire hedge fund founder Paul Tudor Jones indicated that his Tudor BVI fund now holds a single-digit percentage of its portfolio in Bitcoin, stating: “The best profit-maximizing strategy is to own the fastest horse. If I am forced to forecast, my bet is it will be Bitcoin.”
Bitcoin has rallied by over 150% in the past two months and hit an intraday high of $10,380. However, the bulls have repeatedly failed to establish a foothold above $10,000. At the same time, downside has been restricted to around $8,600. The range has tightened in the last few days, with the most influent cryptocurrency trading between $9,300 and $9,900.
A prolonged period of low-volatility price consolidation often paves the way for a big move on either side. The longer the consolidation, the more violent is the breakout/breakdown.
The Elliot wave gives a clear indication of how markets could behave in the next couple of trading sessions.
Currently, the 4 wave is still in place and could take markets up to $10,700. Then, a three-wave pullback in wave A-B-C should occur, before the uptrend resumes in the larger 3 wave towards $14 – 16K.
There are many coins with massive development behind them and lots of credible people who believe in them. Learn before you invest, there is a whole process behind it before taking the initiative to invest, reading coins whitepapers. A whitepaper is the bread and butter of all ICOs. Check the project to see whether the coin is bringing in any real utility into the ecosystem.
Along with that, keep in mind the issues that the crypto world is desperately looking to solve, mainly: privacy, scalability, and interoperability. A good way to go about your investment is to find the projects which are specifically working on solving the before mentioned problems. You inspect the project and ask yourself the following questions, does this project need to be on the blockchain? Does this project need to have tokens?
Because the volatility of Digital Assets grossly exceeds that of any other investment class, they are not a normal investment. So, the important takeaway here is to only risk as much money as you can afford.
A piece of advice, pick your horses carefully or feel free to reach out to AIX Investment Group for a professional advice on your Digital Assets investment and we will be happy to appoint one of our Financial Advisors to guide you through your journey of financial independence.