It is normal to become anxious and nervous when you watch the stock market crash and experience extreme volatility. That is why investors all over the world, even ones just starting out, are looking for new things to invest in, such as Bitcoin. However, investing in Bitcoin and other cryptocurrencies alike isn’t as easy as 1,2,3.
There is a lot to consider and you must also assess what your overall portfolio goals and risk tolerance are to understand it all better and ensure you’re doing the best thing possible. The wrong decision could end up being a bad financial move, so doing your research is definitely recommended. Let’s take a look and figure out if investing in Bitcoin is the right move for you over stocks and if it will benefit or hinder your situation.
The risks profile
In everything we do, there are risks that need to be factored into the situation, however, investing based risks are a whole lot different from everyday risks. It is a known fact that investments carry risk, that is inevitable, but the risk factors depend highly on what you’re investing in. Investments will sometimes crash for absolutely no apparent reason, banks can go bankrupt, or a stock could even soar, no matter what, there will be volatility at times.
As said above, risks are a very common thing within the investing world, but it is no lie that stocks do come with some form of understanding as to where a price could possibly be going. Whereas cryptocurrency is based solely on supply and demand which keeps it popular. It follows suit with other types of currency in the way that all currencies are essentially based on what people are willing to pay.
It seems pretty unfair to base the history and results of stocks and Bitcoin off of the past, however, it has proven to be reliable and allows some form of understanding as to how they may act and fare over a period of time. For example, during 2015, Bitcoins price fluctuated between $200 and $500 whereas, in 2017, its price saw an incredible rise to $19,891 and then fell back to $3,500 in December 2018. In the year 2020, Bitcoin saw its price fluctuate from $3,858 on March 12 and to $9,074 on July 5.
Stock growth, however, hasn’t been as dramatic as Bitcoin, though it has still had its fair share of ups and downs. It has proven to be far more stable since 2015, though it still experiences great periods of volatility. In early 2015, the S&P 500 was at $2,000, however, there have been many changes during this time and as of July 2020, it is sitting at around 3,100. While stocks do have a fairly complicated history of ups and downs, throughout this all, it is proven that you will be provided with far more long-term and historical support.
While stocks do have more of the long-term and historical support, Bitcoin has plenty of apps, websites, and trading software such as the Bitcoin Up website which is extremely helpful and provides all the support you need.