Over the last year, much has been said about the profit potential of Bitcoin and other cryptocurrencies, with many investors allocating a portion of their assets into this highly speculative market. The questions have always nagged at some: How does it work? What, if anything, is really backing it?
Though it’s certainly true that some lucky investors may have timed the market right and bought in low enough to take some profits, many investors, especially those who bought in as prices were rising over the last several months, are looking at massive losses this week, as values have plummeted and seem to be in a virtual freefall.
Meanwhile, precious metal prices keep chugging along. Rarely are there daily gains higher than a few percentage points --- but fast drops are likewise just as rare. That’s why the “smart money” doesn’t follow trends or jump at get-rich-quick ideas – at least not with a large percentage of investable assets. Sure, a little speculation into something with high-risk and high-reward potential can be lucrative, but well-balanced portfolios should also have an allocation into tried-and-true assets that stand the test of time.
If you’re seeking shelter from a volatile crypto market, or ready to take some profits from recent stock market gains, it may be time to start building – or add to – your stockpile of gold and silver. This latest Bitcoin crash is a great reminder that when it comes to diversifying into precious metals … it’s always better to be a week or even a month too early, rather than a day too late, because when crashes occur in cryptocurrencies or equities, they happen fast!