Win-Win Strategy, Mutual Funds and Bitcoin – The Cryptonomist

Bitcoin can be a very profitable investment and one can get a foothold in this asset in many ways (buying, mining, trading, etc.) while mutual funds can be purchased from a mutual fund company of placement, a credit institution or other brokerage companies. .

The main differences between the products and how to invest in Bitcoin

The objective of each investor is certainly the protection of capital and a gain on it, depending on the phase of the economic cycle that we are experiencing, there are generally more or less profitable actions to take and more or less safe investments, Bitcoin and mutual funds embody both advantages.

Bitcoin, born in 2008 at the hands of the unknown Satoshi Nakamotois a peer-to-peer cryptocurrency based on its own protocol and leveraging blockchain technology.

Digital currency is proof-of-work-based unlike other cryptocurrencies, which are proof-of-stake-based and therefore do not contemplate mining.

Adhil ShettyCEO of Bankbazaar, states that:

“It’s not fair to venture into what you can’t risk losing. Buying any asset at peak prices can lead to short-term losses, but it’s best to ask yourself how long you’re willing to hold the profits. Investors can limit their money in cryptocurrency based on their ability to take risk.

It’s the idea of ​​Shetty, who always advises her clients to weigh risk appetite and timeframe, so how much time they give themselves to see results in terms of return on investment.

Rachit ChawlaCEO and founder of Finway FSC, on the other hand, leans directly on the side of the funds remaining very skeptical about Bitcoin and its future, expressing concern about its long-term survival:

“When investors buy stocks, they actually become owners, they become part of the assets owned by the company. So everything is very tangible in the case of mutual funds and stocks. On the other hand, the bitcoin is mostly speculation and it is still unclear what the guaranteed buy is.

The optimal investment

BTC’s support comes from the most unexpected place. Yaspal SharmaVP of Taurus Mutual fund, supposedly reluctant to spread capital across different assets, explains how he’s pro-Bitcoin and thinks it should be in investors’ portfolios as long as they’re aware that the volatility of the investment could be high and that the period to stay more comfortable to have a good return is between 2 and 4 years.

Another problem, admittedly unrelated to return on investment, is bureaucratic. BTC is an investment that is so easy to make these days. With just a few clicks, you are in this world while putting resources into an investment fund, the process takes more time than you do it physically in an office of the institution you are applying online. In addition, transaction fees are high, while for Bitcoin they are regularly limited in time.

The option could be not to choose one or the other instrument, but rather to build a varied and balanced portfolio as well according to their risk appetite and hedge with other investments depending on the direction taken.

In recent years, some central banks around the world, first the Canadian and Australian central banks, then the Fed and the ECB, have authorized the issuance of financial instruments called ETFs based on cryptocurrency and Bitcoinwhich are in fact funds which are one more tool in the hands of institutional investors as well as private investors who wish to set foot in this asset by combining the aspects of the two types of investments (BTC and Funds for that matter).