Bitcoin is indeed a risky asset when measured by volatility. It keeps swinging up and down more than S & P 500. Bitcoin is also less secure than bank deposits, for it’s not covered by insurance.
However, as the argument stands, ‘it’s better to hold a Bitcoin portfolio that is easy to bear’. For instance, accumulating a small portion of Bitcoin and Ether, let say a 5 percent of my portfolio, maybe considered bearable.
Bitcoin has gained extensive usage, especially in unstable countries where people view it as an alternative fiat currency. It has also gained substantial adoption by companies that include PayPal and Squarethese adoption indicated that Bitcoin is a viable payment option.
With that said, I believe it’s proper to keep Bitcoin and Etherum to a minimum exposure. Cryptocurrencies assets are under significant pressure from governments around the world. You may never know when a major Western nation would decide to through a regulator ban like China did this year.
On that note, I want to mention one investment that could help overcome Bitcoin’s shortcomings-the security risks and tax liability. There are several ways to gain exposure to Bitcoin. ETFs expose investors to Bitcoin in a less risky way, but they charge a fee to hold your crypto. That may seem like one is getting ripped off. Instead, buy your Bitcoin in a TFSA, no taxes on your holdings, and you have a professional fund manager plus enterprise-grade security holding your Bitcoin.
