Win-win strategy, mutual funds, and Bitcoin
Win-win strategy, mutual funds, and Bitcoin
Bitcoin

Win-win strategy, mutual funds, and Bitcoin

By George Michael Belardinelli - 26 Aug 2022

Chevron down
Listen this article
download

Bitcoin can be a very profitable investment and one can put a foot in this asset in several ways (buying, mining, trading, etc.) while mutual funds, can be purchased from a mutual fund company, a lending institution, or other brokerage firms.

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

The goal of every investor is certainly capital protection and an earning on this, depending on the phase of the economic cycle we are experiencing there are tendentially 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 Nakamoto, is a peer-to-peer cryptocurrency that is based on its own protocol and leverages blockchain technology.

The digital currency is based on Proof of Work unlike other cryptocurrencies, which are based on Proof of Stake and therefore do not contemplate mining.

Adhil Shetty, CEO of Bankbazaar, states that:

“It is not fair to venture into what you cannot risk losing. Buying any asset at peak prices can lead to short-term losses, but it’s best to ask yourself how long you are willing to hold on to profits. Investors can limit their cryptocurrency money based on their risk-taking capacity.”

This is the idea of Shetty, who always advises his clients to put risk appetite and time frame on the scales, therefore, how long they give themselves to see results in terms of returns for the money they put in.

Rachit Chawla, CEO, and founder of Finway FSC, on the other hand, leans directly on the side of funds remaining very skeptical of Bitcoin and its future, saying she is concerned about its long-term survival:

“When investors buy stocks, they are actually becoming owners, they are 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, bitcoin is mainly speculation and is still not known exactly what the guaranteed purchase is.”

ETF bitcoin
ETFs as a great product to invest in Bitcoin

The optimal investment

BTC’s assistance comes from just the most unexpected place. Yashpal Sharma, vice president of Taurus Mutual fund, which is supposed to be disinclined to scatter capital to different assets, explains how he is in favor of Bitcoin and that he thinks it should be present in investors’ portfolios as long as they are aware that the volatility of the investment could be high and that the time frame to remain more comfortable of having a nice return is between 2 and 4 years.

Another issue, admittedly little related to return on investment, is bureaucratic. BTC is an investment that is so easy to do nowadays. In just a few clicks you are in this world while putting resources into an investment fund the process takes longer, whether you do it physically in an office of the institution you apply to it online. In addition, transaction fees are high, whereas for Bitcoin they are steadily limited over time.

The option might be not to choose one or the other instrument, but rather to build a varied and balanced portfolio also according to one’s risk appetite and hedge with other investments according to the direction taken.

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

George Michael Belardinelli

A former corporate manager at Carifac Spa and later at Veneto Banca Scpa, blogger and Rhumière, over the years he has become passionate about philosophy and the opportunities that innovation and the media make available to us, in particular the metaverse and augmented reality

We use cookies to make sure you can have the best experience on our site. If you continue to use this site we will assume that you are happy with it.