{"id":54582,"date":"2021-05-07T09:00:20","date_gmt":"2021-05-07T13:00:20","guid":{"rendered":"https:\/\/www.ino.com\/blog\/?p=54582"},"modified":"2021-05-06T17:52:25","modified_gmt":"2021-05-06T21:52:25","slug":"should-you-own-cryptocurrency","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2021\/05\/should-you-own-cryptocurrency\/","title":{"rendered":"Should You Own Cryptocurrency?"},"content":{"rendered":"<p>The short answer: Yes.<\/p>\n<p>I\u2019ll get to the reasons why it should be a part of just about every investor\u2019s portfolio in just a moment.<\/p>\n<p>I\u2019ll also get into why, if you do take the plunge into crypto, do so gingerly. <\/p>\n<p>But before we get started, take a look at the first three installments in this multi-part series about blockchain and cryptocurrency. We talked about <strong><a href=\"https:\/\/www.ino.com\/blog\/2021\/04\/heres-why-cryptocurrency-is-so-important\/\">why they\u2019re so important<\/a><\/strong>, <strong><a href=\"https:\/\/www.ino.com\/blog\/2021\/04\/what-is-cryptocurrency-anyway\/\">what they\u2019re all about<\/a><\/strong>, and <strong><a href=\"https:\/\/www.ino.com\/blog\/2021\/04\/what-the-blockchain-and-cryptocurrency-mean-to-you\/\">what they really mean to you<\/a><\/strong>. <\/p>\n<p>Feel free to take a look at these when you get a sec. But they\u2019re not needed to get a deep understanding into what we\u2019ll talk about today. <\/p>\n<p>So, let\u2019s get to it. Here are just a few reasons to own cryptocurrency...<!--more--><\/p>\n<h2 style=\"color: #003380; font-size: 20px;\">Reason #1: Mainstream Adoption<\/h2>\n<p>A couple of years ago when I first started writing about cryptocurrency and blockchain, all you heard was that it was a fad and wouldn\u2019t amount to much.<\/p>\n<p>In fact, there was a chorus of naysayers who thought it wouldn\u2019t go anywhere.<\/p>\n<p>I guess hindsight is 20-20, right?<\/p>\n<p>Back then in January 2018, I wrote that <strong>Bitcoin <a href=\"https:\/\/club.ino.com\/trend\/?s=BITSTAMPUSD&mktcode=TradersBlogTA\">(BTC)<\/a><\/strong> was trading at $13,657 with a market cap of $229 billion. Recently, BTC stands at a staggering $57,232 with a market cap of over $1 trillion.<\/p>\n<p>If you want to make a case for mainstream adoption, you don\u2019t have to dig much deeper than those numbers. But just in case that\u2019s not enough:<\/p>\n<ul>\n<li>Tesla bought $1.5 billion of BTC in February.<\/li>\n<li>In March, PayPal began taking payments in BTC.<\/li>\n<li>Last year, the digital payments company Square bought $170 million of Bitcoin.<\/li>\n<li>The IPO direct listing of Coinbase (COIN) initially hit $100 billion. And although it\u2019s off those highs, fundamentally the exchange is in good shape: Estimates call for profits of between $730 million and $800 million on sales of $1.8 billion during the first quarter.<\/li>\n<\/ul>\n<h2 style=\"color: #003380; font-size: 20px;\">Reason #2: Store of Value and Scarcity<\/h2>\n<p>One of the big reasons that currencies work is that they are a (more or less) stable store of value. And that holds true whether we're talking about fiat currencies like the dollar, commodities like gold or cattle, or digital assets like cryptocurrencies.<\/p>\n<p>And one of the big underpinnings that push store of value is scarcity. The more scarce, and therefore more coveted, the more valuable a particular store of value.<\/p>\n<p>Take gold for example. Due to its relative scarcity and difficulty to mine, it\u2019s usually a pretty good store of value. <\/p>\n<p>This holds true for cryptocurrencies as well. They are in general scarce and difficult to come by. <\/p>\n<p>But unlike gold, many cryptocurrencies have a strictly limited supply (BTC is capped at 21 million) coins. As a result, some cryptocurrencies are even more scarce and, as a result, an even better store of value than gold.<\/p>\n<p>This fixed supply feature also means that cryptocurrencies can be a good hedge against inflation and the changing value of fiat currencies like the dollar. After all, if you can print more of these currencies, they aren\u2019t inherently worth as much as a store of value as fixed supply assets like cryptocurrencies.<\/p>\n<h2 style=\"color: #003380; font-size: 20px;\">Reason #3: Safely Built on the Blockchain<\/h2>\n<p>Since virtually all cryptocurrencies are built using blockchain technology, transacting business using cryptocurrencies is trustless, efficient, and super-safe.<\/p>\n<p>When you use your typical bank account to transact business you trust a lot of people and intermediaries: You have to trust that the bank will take care of your money, that it won\u2019t be lost, that their computers will operate correctly, and that they will send payments on time and as instructed. <\/p>\n<p>All told, that\u2019s a lot of trusting. And it\u2019s not necessary with cryptocurrencies. <\/p>\n<p>In fact, because blockchain uses distributed ledger technology, cryptocurrency transactions are duplicated across a vast network of computers, all making sure your money is sent to the right person at the right time. And it\u2019s only until all these computers agree that everything happened as it\u2019s supposed to that your transaction is completed and verified.<\/p>\n<p>In addition, cryptocurrencies are transacted using cryptography, which together with the distributed ledger, make cryptocurrency transactions virtually bullet-proof.<\/p>\n<h2 style=\"color: #003380; font-size: 20px;\">If you buy crypto, go gingerly<\/h2>\n<p>Sometimes a picture(s) is worth a thousand words...<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/assets.ino.com\/img\/sites\/ino\/email\/12423.jpg\" width=\"950\" height=\"606\" alt=\"Cryptocurrency - Bitcoin Chart \" class=\"aligncenter size-full\" \/><br \/>\n<center><small><em><a href=\"https:\/\/coinmarketcap.com\/currencies\/bitcoin\/\">Source<\/a><\/em><\/small><\/center> <\/p>\n<p>As you can see from this chart of BTC, the cryptocurrency recently meandered between $4K and $12K for the better part of three years before going parabolic last Fall. There\u2019s no doubt about it, that is scary.<\/p>\n<p>Now, take a look at this chart...<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/assets.ino.com\/img\/sites\/ino\/email\/12424.jpg\" width=\"932\" height=\"465\" alt=\"Bitcoin Volatility \" class=\"aligncenter size-full\" \/><br \/>\n<center><small><em><a href=\"https:\/\/www.buybitcoinworldwide.com\/volatility-index\/\">Source<\/a><\/em><\/small><\/center><\/p>\n<p>This chart shows the standard deviation of BTC daily returns. A recent reading of 2.75% means that BTC\u2019s daily returns fluctuate 2.75% per day over the last 30-day period. Once you do the math on that one, you find out that BTC is a super-volatile asset to own.<\/p>\n<p>So, if you take the plunge and buy cryptocurrencies, including BTC, make sure you do so very gingerly. I\u2019d say no more than 1% to 2% of your portfolio at the most. That would be enough to keep your interest, but not enough to keep you awake at night.<\/p>\n<p>In my next issue, we\u2019ll take a look at a cryptocurrency that should be in just about every investor\u2019s portfolio. We\u2019ll get into the nuts and bolts, so if you decide to buy, you can it with confidence.<\/p>\n<p>Stay tuned!<br \/>\n<a href=\"https:\/\/www.ino.com\/blog\/meet-ino-com-contributor-wayne-burritt\/\">Wayne Burritt<\/a><br \/>\nINO.com Contributor<\/p>\n<p><span style=\"font-size: 12px; font-style: italic;\">Disclosure: This contributor does own Bitcoin. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.<\/span><\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>The short answer: Yes. I\u2019ll get to the reasons why it should be a part of just about every investor\u2019s portfolio in just a moment. I\u2019ll also get into why, if you do take the plunge into crypto, do so gingerly. But before we get started, take a look at the first three installments in [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":34,"featured_media":54586,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6920],"tags":[14379,9311,9180,6243,31534,8593,6385],"class_list":["post-54582","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ino-com-contributors","tag-bitcoin-bitstampusd","tag-blockchain","tag-blockchain-technology","tag-cryptocurrency","tag-data-science","tag-ethereum-eth","tag-wayne-burritt"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v23.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Should You Own Cryptocurrency? - INO.com Trader&#039;s Blog<\/title>\n<meta name=\"description\" content=\"The short is answer: Yes. 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