Despite Bitcoin (BTC)’s stellar performance this year, its role in an average investor’s portfolio is still questionable, according to Bloomberg.
In an opinion piece published for the outlet on Friday, financial analyst and crypto advisory expert Aaron Brown said the asset’s dubious correlations to traditional asset classes leave it out of place when bought alongside stocks, currencies, or gold.
Is Bitcoin’s Volatility A Good Thing?
BTC is up 160% since the start of the year, rebounding from losses suffered last year alongside virtually all other assets during historically aggressive interest rate hikes by the Federal Reserve.
According to Brown, that’s mostly standard behavior for BTC, which has taken an average of nine months and twenty-one days to double in value since 2014. Its volatility since March, however, has been uncharacteristically low, even amid plentiful industry scandals, hacks, and aggressive regulatory pressure.
“Bitcoin has more than enough appreciation potential to attract investors, and its volatility no longer seems to be a disqualification,” Brown noted. Nevertheless, its unpredictable behavior around fundamental market events makes it a scary prospect for those who can’t or won’t respond to regular price changes.
Average investors’ present skepticism is reinforced by on-chain data. According to Glassnode analyst James Check earlier this week, there is very little market “mania” among investors at $44,000 this year compared to almost three years ago.
On Thursday, Bloomberg blockchain analyst Jamie Coutts said that Bitcoin’s illiquid supply levels suggest a “much higher base level of conviction” among investors.
Bitcoin’s Value Proposition
Even in terms of fundamental value, the analyst finds Bitcoin’s place is questionable: its failed to gain adoption as a transactional currency compared to fiat or stablecoins, and there is inconsistent demand for tools in the crypto economy to which BTC offers access.
That said, Bitcoin is making progress on the regulatory front, with traditional and regulated financial services like options, lending, and custody now available for the asset. Issues around tax treatment and legality appear mostly solved, and approval of a Bitcoin spot ETF seems all but certain by next month.
In conclusion, Brown stated:
“We are close to the time when even very traditional investors, generally skeptical about crypto, should accept that it’s safer to have a small allocation to Bitcoin than to ignore it. Crypto might still all go to zero, but there’s enough potential upside that no exposure is an unbalanced portfolio.”
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How Are Normal People Thinking About Bitcoin? Bloomberg Investigates
Bitcoin, the digital currency that has taken the world by storm, has been a hot topic of conversation for years. With its skyrocketing value and the constant buzz surrounding it, many people have been left wondering just how the average person is thinking about Bitcoin. To shed some light on this topic, Bloomberg decided to investigate and uncover the thoughts and perceptions of normal, everyday people when it comes to this revolutionary form of currency.
In their investigation, Bloomberg sought to understand how average individuals, not just seasoned investors or tech-savvy individuals, perceive Bitcoin. The results were enlightening, offering valuable insights into the common person’s thoughts on this groundbreaking financial phenomenon.
Key Findings from Bloomberg’s Investigation
Bloomberg’s investigation revealed a myriad of viewpoints and sentiments regarding Bitcoin. Here are some key findings from their study:
1. Skepticism and Caution: Many individuals expressed skepticism and caution when it came to Bitcoin, citing concerns about its volatility and the lack of regulation in the cryptocurrency market.
2. Curiosity and Interest: Conversely, a significant number of people expressed curiosity and interest in Bitcoin, citing its potential to revolutionize the financial industry and create new opportunities for investment.
3. Lack of Understanding: A prevailing sentiment was the lack of understanding surrounding Bitcoin and cryptocurrency in general. Many individuals indicated that they found the concept of Bitcoin to be complex and difficult to grasp.
4. Fear of Missing Out: Some participants admitted to feeling a fear of missing out on potential gains by not investing in Bitcoin, while others expressed concern about the fear of losing money by investing in a highly volatile asset.
5. Accessibility and Adaptability: Many respondents mentioned that they found Bitcoin to be accessible and adaptable, particularly in terms of its potential to be used as a means of payment and as a store of value.
Benefits and Practical Tips
Despite the varied perspectives on Bitcoin, it’s evident that this digital currency has captured the attention of the mainstream. For those looking to better understand and potentially invest in Bitcoin, here are some benefits and practical tips to consider:
Benefits of Bitcoin:
1. Decentralization: Bitcoin operates on a decentralized network, meaning it is not controlled by a single entity or government, offering a level of financial autonomy.
2. Potential for High Returns: Bitcoin has gained a reputation for delivering significant returns on investment, attracting many investors seeking high-yield opportunities.
3. Diversification: Including Bitcoin in a diversified investment portfolio can offer potential benefits beyond traditional assets, providing exposure to the cryptocurrency market.
Practical Tips for Bitcoin Investing:
1. Educate Yourself: Before investing in Bitcoin, it’s crucial to educate yourself on the fundamentals of cryptocurrency, blockchain technology, and the risks associated with digital assets.
2. Start Small: Begin with a small investment in Bitcoin to familiarize yourself with the market and gain practical experience before committing significant funds.
3. Stay Informed: Keep track of the latest news and developments in the cryptocurrency space to make informed decisions and stay ahead of market trends.
First-hand Experience
To gain a firsthand understanding of how normal people perceive Bitcoin, we spoke with Stephanie, a 35-year-old mother and small business owner. Stephanie shared her thoughts on Bitcoin, providing valuable insight into the perspectives of everyday individuals.
“I’ve heard a lot about Bitcoin in the news and from friends,” Stephanie said. “I’m definitely curious about it, but I also have some concerns about its volatility. As a small business owner, I have to be careful with my investments, so I’m still on the fence about whether to get involved with Bitcoin.”
Stephanie’s sentiments reflect the cautious yet intrigued mindset of many individuals when it comes to Bitcoin. Her perspective underscores the importance of informed decision-making and understanding the risks associated with cryptocurrency investments.
In conclusion, Bloomberg’s investigation into how normal people think about Bitcoin has shed light on the diverse range of viewpoints and perceptions surrounding this revolutionary form of currency. From skepticism to curiosity and interest, the study has highlighted the complex and multifaceted nature of public sentiment towards Bitcoin. With proper education, informed decision-making, and a cautious approach, individuals can navigate the world of Bitcoin and potentially harness its benefits for their financial growth.
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