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CRYPTOCURRENCY AND ELON MUSK: WHY SHOULD YOU KNOW?
The CEO of Tesla and SpaceX Elon Musk is a prominent investor in Cryptocurrency. Apart from Ethereum and Dogecoin, his biggest investment is Bitcoin. Let us see what he has aimed at, with his investment. In recent times, he has confirmed that Bitcoin, amongst others, is an investment he plans to go to in the long term.
The Elon Musk Speculations:
Elon Musk intends to hold the cryptocurrency in the long term. He said he is not going to sell anytime soon. Analysts often warn that cryptocurrency is subjected to market risk. A lot of speculation is required and prices alter.
Moreover Elon Musk’s decision to hold the investment in the long term is a wise decision. He says he won’t give up the currency but will keep it even with a risk of loss. His company SpaceX holds the value of Bitcoins. Tesla Motors invested a handsome amount in the global cryptocurrency market as well. Do you know, how is this going to help you with your investment?
A Few Points to Consider:
- Understand the risk: Cryptocurrency investment involves a lot of risks. One should completely understand the risks involved with it. Let us see what the Public Accountant and founder of Fit Advisor say about this. She considers Bitcoin as a volatile asset. She also suggests that new investors should be prepared to face losing money. Investors should be comfortable with the fragile swings of the market.
- Invest for the long term: Experts suggest, to invest with a long-term strategy instead of short-term trade. Morningstar’s portfolio strategist Amy Arnott says the market fluctuates on a daily or weekly basis. With small-term trade, the invested value can be whitewashed. It is of high risk. Thus, it is wise to invest for the long term. To add, a high transaction cost is associated with every business. Therefore, the strategy of ‘buying and holding’ is beneficial.
- Make a small investment: Jariwala suggests keeping a small number of assets behind cryptocurrency investment. The basic thumb rule is maximum 3% of the total allocation. She insists on finding extra money that can be done no good to. Arnott also warns to keep Bitcoin as a relatively small part of someone’s investment portfolio. She believes that sudden fluctuation in the market can result in a dramatic loss of assets Thus, even if that is the ‘extra money you are suggested to be wise and understanding about it.
- Start slow: Once you completely understand the market risks money and a clear picture of probable speculations, you can start off allocating smaller to smaller amounts at a time. Experts advise not to invest all at once. Why is that? If the market faces a downfall, there should be some funds left to revive. The tendency of the market cannot be understood within a short period. It is necessary to be in the market for around 5-10years, to understand the consistent performance.
Elon Musk’s Plan:
Elon Musk plans to hold Bitcoin for the long term. He said we want what is good for Bitcoin. With the risk of casualty in the everyday market, he plans to settle with his investment for later. It is wise because of the everyday risks. With the value of money going high every day, he wishes to jinx the investment. Big shot investors like him, must have prepared themselves with the consequences of loss.
His recent query:
His company Tesla bought $1.5million in bitcoin. They were to accept payments and make business with Bitcoin. However, he is also aware of the environmental consequences. With Bitcoin’s high energy consumption, environmentalists were critical about the investment. However, Elon Musk has planned to chalk out an alternative for energy conservation instead of dumping off his investment. You too can get and use bitcoin
It is very important to have a certain degree of knowledge about the pros and cons of investing in cryptocurrency. Learning how big investors speculate the market is important too. Hope this article helps you in your decision-making.