The price of cryptocurrencies is volatile; some can go bust, others could be scams, and occasionally one may increase in value and produce a return for investors. Mark Hipperson, chief executive of Crypto platform Ziglu, argues the case for digital coins going mainstream.

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You can unsubscribe at any time. DAI is hosted on the Maker MKR platform, and crypto platforms can also be safer to invest in than the actual currency, he says. Brown points to tether, the largest stablecoin, backed by one dollar per coin. It shows volatility has gone down. According to Brown, it could also be less risky to make long-term investments in the companies associated with cryptocurrencies.

There are also some funds and investment trusts that have exposure to cryptocurrencies, which is a less risky way of investing than buying the currencies themselves. They are touted as the easy and fast way for new users to purchase various cryptocurrencies such as bitcoin. Other ways to buy include the digital currency app Ziglu and on the investment platform eToro. Gemini , founded by the Winklevoss brothers of Facebook fame , is a digital exchange that allows customers to buy, sell and store cryptocurrencies.

Several companies are planning to launch bitcoin funds, though have run into difficulties with regulatory agencies so far. The main purpose of it would be to facilitate the investing process into cryptocurrency and make the asset class more attractive.

What is happening?

It will still be volatile, but it could be easier to sell your investment and get your money back than investing directly. There are a few ways to get exposure to cryptocurrency with existing investment funds. For example, Ruffer Investment Company, an investment trust, announced in December that it had allocated 2. Its top 10 holdings include Taiwan Semiconductor Manufacturing and Samsung. Article Should you invest in bitcoin?

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By Jedidajah Otte updated March 26, Investing trends. Sign up to our newsletter Receive regular articles and guides from our experts to help you make smarter financial decisions. First name. Last name. Read next.

How to Buy Bitcoin

Guide to investment trends Guide to investment trends Investing trends. How can I invest ethically? Sorry, your blog cannot share posts by email. The traditional move would be to hedge against stock volatility with gold. This has proven an effective method in the past, but a newer alternative is challenging the old-school safe-haven. Launched in , bitcoin ushered in a new era of digital currencies.

There is no reason to sell. What will happen to Bitcoin and Ethereum?

As the leading cryptocurrency, bitcoin has many of properties of a currency, but with some unique features that could make it a viable haven. Ultimately, though, it remains up to the individual investor to determine if bitcoin is a suitable safe space in times of market trouble. Below, we'll compare gold and bitcoin as safe haven options. There are several factors that make gold a strong safe-haven asset. Regardless of demand, supply remains disproportionately low.

Gold cannot be manufactured like a company issues new shares, or a federal bank prints money. It must be dug up from the ground and processed.

The precious metal used to be tied to the Dollar until when President Nixon severed the ties between U. Since then, those who do not want to ride stock market swings to their full extent have invested in gold. Plus, as more people flee stocks and invest in gold, the price rises accordingly.

How profitable will Bitcoin be in 2021 and beyond?

Bitcoin is a blockchain-based cryptocurrency that shares some properties with its gold counterpart. Market participants may remember in when the price of one bitcoin surpassed that of a single troy ounce of gold for the first time. More importantly, should those running from stocks consider investing in the cryptocurrency?

Like gold, there is a limited amount of bitcoin. Satoshi Nakamoto, the pseudonymous creator of bitcoin, limited the total supply to 21 million tokens. Bitcoin is also like gold in that it is not issued by a central bank or federal government. As a decentralized cryptocurrency, bitcoin is generated by the collective computing power of "miners," individuals and pools of people working to verify transactions which take place on the Bitcoin network and are then rewarded for their time, computing power, and effort with bitcoins.

To ensure that the market isn't flooded, the Bitcoin protocol stipulates that these rewards are periodically halved, ensuring that the final bitcoin won't be issued until about the year For hundreds of years, gold has dominated the safe-haven asset arena, while bitcoin was launched just over a decade ago and has only achieved widespread recognition in the last few years. Below, we'll compare these two investment options head-to-head:.

Bitcoin is also difficult to corrupt, thanks to its encrypted, decentralized system and complicated algorithms, but the infrastructure to ensure its safety is not yet in place. The Mt. Gox disaster is a good example of why bitcoin traders must be wary. Many years later, the legal ramifications of the Mt.

Gox situation are still being resolved. Both gold and bitcoin are rare resources. The halving of Bitcoin's mining reward ensures that all 21 million Bitcoin will be out in circulation by the year While we know that there is only 21 million bitcoin that exist, It is unknown when all the world's gold will be mined from the earth. There is also speculation that gold can be mined from asteroids, and there are even some companies looking to do this in the future. Gold has historically been used in many applications, from luxury items like jewelry to specialized applications in dentistry, electronics, and more.

In addition to ushering in a new focus on blockchain technology, bitcoin itself has tremendous baseline value as well. Billions of people around the world lack access to banking infrastructure and traditional means of finance like credit. With bitcoin, these individuals can send value across the globe for close to no fee. Bitcoin's true potential as a means of banking for those without access to traditional banks has perhaps yet to be fully developed.

Both gold and bitcoin have very liquid markets where fiat money can be exchanged for them. One major concern for investors looking toward bitcoin as a safe haven asset is its volatility. One need look only to the price history of bitcoin in the last two years for evidence. It has since recovered a portion of those losses, but is nowhere near its one-time high price point.

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Besides overall volatility, bitcoin has historically proven itself to be subject to market whims and news. Particularly as the cryptocurrency boom swept up a number of digital currencies into record-high prices around the end of , news from the digital currency sphere could prompt investors to make quick decisions, sending the price of bitcoin upward or downward quickly.

Should you invest in bitcoin?

This volatility is not inherent to gold for reasons mentioned above, making it perhaps a safer asset. In recent years, a number of alternative cryptocurrencies have launched which aim to provide more stability than bitcoin. Tether, for instance, is one of these so-called " stablecoins. Investors looking for less volatility than bitcoin may wish to actually look elsewhere in the digital currency space for safe havens. NBC News. Coin Telegraph. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page.