The co-founder of Zerodha and True Beacon advises Millennials not to invest in anything more than 1-5 per cent of their net worth. cryptocurrency.
His reasoning: “A fight between
Central bank And private cryptocurrencies have been going on for some time and now it seems we are approaching a climax.”
“Developments in China and some other parts of the world show that, to some degree, crypto takes power away from central banks and governments. So they are bound to fight back, and when they come out and try to regulate it and change it one way or another, it will be interesting to see what happens and which side wins,” Kamath it is said.
However, Industry Experts are not as pessimistic. They say that it is okay to allocate a fair portion of your investment in crypto assets based on one’s risk appetite.
Hitesh Malviya, Founder
itsblockchain.com Said that moderate risk takers can allocate 20 percent of their portfolio to cryptocurrencies to reap higher rewards.
“If one can take on more risk, the allocation can be increased, but investments should be made in fundamentally strong and well-backed tokens,” he said. In recent times there has been an increase in crypto adoption among various institutions and businesses.
CoinSwtich Kuber’s Chief Business Officer Sharan Nair said the allocation in cryptocurrency portfolio Much depends on the risk appetite of the investor.
“One can take a slow and steady approach and maintain a diversified portfolio, which can include crypto as one of the asset classes,” he said. “Start by investing in small amounts and increase the investment as you become familiar with the property.”
Others say that there should not be too much allocation to any one asset class, and should be aware that crypto is a highly volatile asset class.
Nair said the volatility in an asset class varies with the investment ability of the investors. “A well-researched investment decision will naturally guide investors into the asset class they wish to risk,” he said.
Investors with low to moderate risk-bearing capacity can look to crypto exchange-traded funds, or ETFs, which can be an easy way to gain exposure to the cryptocurrency. However, there are currently no major crypto ETFs available.
“ETFs save investors from managing multiple digital wallets to acquire and track different cryptocurrencies,” said Nair of CoinSwitch Kuber.
Malaviya said retail investors should look to direct investments in bitcoin and major altcoins through exchanges, while institutional investors can invest through index funds and ETFs.
Historically, popular cryptocurrencies like bitcoin and ethereum have given multibagger returns in the long run, at least three years in a row.
“If an investor buys top cryptocurrencies during market downturns and holds them for a longer period, the chances of making multibagger returns increase,” Malviya said.