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Crypto strikes back – myths and facts

It is a safe time to invest in crypto right now, even with the market fluctuations

Myth and fact

Safety in investing is a subjective matter. Individuals have very different risk tolerances to investing. Some people want stable cash generative investment, and others want some risk (what we know as volatility), and because of that risk, they get compensated with reward.

Advice for investing in crypto should be the same advice given to anyone looking to invest in any new asset class, be that a new property fund, equity or even crypto.

The fundamental rules of investing still apply.

  •  Don’t invest if you are looking to get rich quick.
  •  Don’t put in more money than you can afford to lose.

Some people might want to put +20%, +50% or even +70% of their investable wealth into this asset because they unequivocally believe in it.

Whether you do or don’t, you can’t predict the future, and whoever tells you they know where any market is going is lying to you. So be smart and invest the amount that works for you.

That might be as little as 1%, and that’s perfectly fine.

It’s all about time in the market and not about timing the market.

Unless you are an experienced trader (and even they get it wrong) most, who try to time the market usually get hurt. As mentioned earlier, a far better strategy is to dollar cost average. Historically, that has been a successful investment approach with cryptos.

I will become a millionaire within a week investing in crypto

Myth and Fact

Again it all depends on your risk tolerance. If you decided to buy R500 000 worth of Cardano (ADA) and it doubled in a week, then yes, you would be a millionaire, but this comes with extreme risks as the opposite could also be true. You could buy R500 000 of ADA, and it falls -50%… now you have just lost R250 000 in a week.

It’s all about risk tolerance and how much you are willing to invest.

Bitcoin is the only and most trusted big cryptocurrency

Myth

While Bitcoin is the most trusted cryptocurrency out there, this is largely due to it being the first cryptocurrency. Therefore it has the most time in existence, but it is not the only cryptocurrency.

There are over 4 000 cryptocurrencies and some of which are catching Bitcoin as the biggest cryptocurrency. Ethereum is the second biggest cryptocurrency accounts for nearly 18% of the total cryptocurrency market.

There are many more sectors in crypto that are being built, like DeFi or Smart Contracts, that are catching investors eyes and growing at rapid passes.

Investing in crypto, like investing in any asset, has its greatest returns over a long-term strategy

Fact

Now, due to Bitcoin’s volatility, it is quite an intense asset to through your life savings at, but like most asset classes, it helps returns of a broader portfolio when added. Keeping in mind that regardless of the high volatility, Bitcoin holders have been rewarded handsomely for it.

Bitcoin is up over 220 000% over the last 10 years. That’s unlike any investment seen before.

But here’s the trick…

Bitcoin has a unique ability in that it is uncorrelated to almost every other asset class out there. Giving it great diversification benefits… and as Harry Markovitz once said (Nobel Prize for Economics), “diversification is the only true free lunch in investing.”

And that’s where Bitcoin’s power is.

Its been found that holding around 2-5% of your investable wealth in crypto can vastly improve your return per unit of risk (Sharpe ratio) over the long term. Now, keep in mind this is still a young asset and proved backtesting will still take years as the data grows, but these are the initial findings.

Through Revix, you can also gain access to their ready-made “Crypto Bundles”, which offer this diversification benefit.

These Bundles allow you to own an equally-weighted basket of the world’s largest and, by default, most successful cryptocurrencies.

For more information about Revix’s USDC Savings Vault, Crypto Bundles, or a direct way to invest in Bitcoin, Ethereum, Pax Gold or USDC, visit Revix.

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Crypto strikes back – myths and facts