Today’s theme is very hot this year: Bitcoin.
Bitcoin has high volatility, that is, it will swing in price frequently and with very high magnitudes. That said, it is important to be concerned about the size of the position, if you are convinced that it makes sense to have a portfolio, and respect a longer investment term – historically, the most adequate minimum window in this market is 3 years, below that the risk x return does not pay.
Now that the messages have been given, let’s go to the 3 positive points:
- Modern gold: Like the precious metal, bitcoin has a store of value. However, if we compare the market size of each asset, bitcoin has a total value of US$700 billion, while gold has already reached US$10 trillion. This shows that there is still a lot of room for crypto to grow and even to do with gold what the internet did with print media – both still exist, but the internet has taken up a lot of space.
- Window with good winds: The timing is very opportune. Central Banks printed gigantic amounts of currency to combat the consequences of the pandemic. The Fed, BC of the USA, for example, doubled its balance in the last year. These fiscal stimuli could wake up inflation. With prices on the rise, investors are looking to stores of value to protect themselves, as has historically happened with gold. Now, there is the alternative of bitcoin, which can accelerate the process of increasing the market for this asset.
- Sea of sharks: Big investors, affectionately dubbed sharks, are finally embracing bitcoin. This is the case of Paul Tudor Jones, American billionaire and fund manager in the USA, and Stanley Druckenmiller, also a great name in the world of global managers, who use crypto as a store of value, and have a position in their portfolios.