Read This Before You Buy More Bitcoin in 2021

Many savvy market watchers are asking themselves whether they should buy Bitcoin this year. Bitcoin surged to a record high on January 6, 2021, only two days after its biggest single-day drop in months. Learn what might be fueling this ascent and what you should consider before padding more of your portfolio with Bitcoin.

Why Is the Price of Bitcoin Going Up?

Bitcoin, a form of digital money known as cryptocurrency, has been on a roll. But why? The CoinDesk website cites three reasons for Bitcoin’s recent bounce:

  1. Institutional buyers in search of a hedge against inflation are heightening demand. Bitcoin was designed so that there’s a finite supply-21 million, to be exact. By contrast, central banks such as the Federal Reserve can increase the money supply by printing more money.
  2. The value of the dollar versus foreign currencies has gone down. “The U.S. Dollar Index…slid 6.8% in 2020,” CoinDesk reported, and there remain expectations for a struggling dollar in 2021.
  3. More speculators are buying Bitcoin, and it’s becoming increasingly easy for them to purchase it.

Should You Buy More Bitcoin in 2021?

The decision about whether to purchase more Bitcoin this year depends largely on your tolerance for risk.

As CoinDesk points out, Bitcoin continues to be a highly volatile asset class. Its price has fallen at least 25% each year since 2013 from a high point reached earlier in that year. Wild swings in the price of Bitcoin are common.

How wild? Wild enough to warrant a public warning from Britain’s Financial Conduct Authority and an outright ban of derivatives and ETNs linked to cryptocurrencies.

Nonetheless, buying Bitcoin may result in fantastic gains.

However, some folks may prefer a less volatile means of acquiring alternative assets or may want to diversify their holdings. That’s where gold and other precious metals can come in. Here are some of the advantages of precious metals:

  • Gold, silver, palladium, and platinum have been around for centuries, while Bitcoin is a relatively new phenomenon.
  • Precious metals are tangible assets, whereas Bitcoin is a digital asset.
  • Gold and other precious metals are an established and longtime vehicle for storing wealth. According to FEDWeek, gold’s lower volatility level makes it a much better choice as a store of wealth than Bitcoin.
  • Unlike gold, Bitcoin isn’t viewed as a safe haven.

That’s not to say Bitcoin isn’t worth exploring. As points out, Bitcoin can be a hedge against inflation and geopolitical uncertainty. Yet it could be wise for an owner of Bitcoin to consider shifting at least some of their crypto-profits to a physical hedge like gold and other precious metals to diversify their portfolio. In fact, U.S. Money Reserve enables you to buy precious metals with Bitcoin funds.

Furthermore, gold-the king of precious metals-wields a numerical advantage over Bitcoin.

Also, gold and other precious metals can be put into a Self-Directed Precious Metals IRA, enabling you to save for retirement. U.S. Money Reserve can help you transfer your Bitcoin into U.S. dollars to contribute to an IRA that holds precious metals, too.

Follow U.S. Money Reserve on BBB

“I’ve watched gold for a long time. I remember when gold was $230.00 per oz…now look at it.”

--

--

America’s Gold Authority https://www.bbb.org/us/tx/austin/profile/coin-dealers/us-money-reserve-inc-0825-52264

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store