If Bitcoin Holds Above The $7,500 Region, should investors continue to hold or to diversify?
After the dip in its value at the beginning of 2019, Bitcoin is currently trading in the midst of an ascending channel, marked by consistent higher lowers and higher highs. With a new resistance line of $7,500, the popular cryptocurrency is breaking out of the bear market into a bull one.
As investor confidence is beginning to come back, many are turning to Bitcoin and other cryptocurrencies in an attempt to diversify their portfolios. The strong bullish signals for Bitcoin saw the price rising and increasing the currency’s dominance index as it outperforms other cryptocurrencies.
This is an extremely exciting period for cryptocurrencies and blockchain technology with increased interest from Tier 1 banks and financial institutions. Although it will take time for these companies to implement their cryptocurrency plans, positive news within the crypto sphere will benefit the market and raise prices as seen with bitcoin in the last days.
Adaptive Capital’s Murad Mahmudov, David Puell, independent researcher Willy Woo and Tuur Demesteer are certain that Bitcoin’s upward trend is a sign that other alt coins will soon follow up and this is the ideal time to diversify.
While it is true that Bitcoin and other alt coins have high volatility — this does not necessarily translate to high risk. In the long-term dramatic fluctuations in the price of a stock or digital assets are not a bad thing. Investing in various digital assets is the best way to offset the volatility of the crypto market and turn a profit.
Furthermore, when diversifying a portfolio, it is always recommended to introduce asset classes that are unrelated to one another. Bitcoin functioning is independent of external influence and in fact independent of virtually everything on this planet (which is again why the trajectory of the price follows a trend of spreading adoption which is characterized by an exponential function) and as such when there is external turmoil Bitcoin is unaffected and this presents a favorable “haven” for funds when other economic uncertainties arise. Indeed the more turmoil and chaos a region faces, the more people rely on Bitcoin for a store of value for their wealth and a means of exchange, the more this increases the adoption and price of Bitcoin.
Entering the market with a diversified portfolio means that the initial investment is spread out across a varied range of cryptocurrencies, thus increasing the chance of reaping rewards when one or more of your coins sees a sudden increase in value. A diversified portfolio simply spreads out the opportunity for success and helps investors benefit from any overall progress in the market.
There are several altcoins that provide a strong investment opportunity for investors to take advantage of. Ethereum is one of the most popular altcoins on the market today, due largely to the fact that contracts can be executed without any downtime, fraud, or interference from a third party. Litecoin has also been on the uptick of late thanks to its speed and ease of acquisition, both of which are designed to atone for some of bitcoin’s shortcomings.
But there are other options for cautious investors beside these popular crypto currencies. Tokens or coins issued by projects holding an ICO (Initial Coin Offering) or IEO (Initial Exchange Offering) are just as lucrative to invest in. Investing in startups with a strong team and business plan can provide a balance between low-risk, moderate-risk, and high-risk coins to give the best chance at success.
There is no doubt that the ICO model or concept that fueled the crypto bull market of 2017 is undergoing change and coming back stronger than before with the safer IEO model. Teams are coming up with better, more innovative funding solutions, which will become the primary reasons for the continuing trend of IEOs.
This creates value for a certain sector like the betting and gambling niche in the case of Faireum — leveraging blockchain as a development platform for gaming companies and individual developers can expand the gaming industry’s reach. A proprietary blockchain and a set of protocols allow developers can create their Dapps compatible with all of the WASM blockchain contracts written by high-level programming languages. Given the global market for iGaming and gambling and the bull trend for cryptos, projects like Faireum can have long-term potential for a diversified portfolio.
Given the upward trend of Bitcoin in the past month and the value of the global online gambling market nearing $20 billion a year — now is a good time to invest in a new blockchain-based business like Faireum. As the online gambling market is experiencing a consistent growth with the implementation of new technologies and the increased accessibility of the Internet, Asia as the fastest growing iGaming market will surely undergo a transformation.
All in all, with a ready MVP (beta version) that can be accessed at https://faireum.com — Faireum is an already operational business, with fundamental structure. As such, investors will have the benefit of investing in a trustworthy project with huge potential for growth.