Can cryptocurrency be part of a diversified long-term investment portfolio?


IIt’s no secret that the crypto market is full of high risk investment opportunities. So you might be wondering if long term long term investors can find solid investment choices in this space? In this segment of Backstage Pass, registered on November 10, Fool contributors Rachel Warren and Connor Allen discuss.

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Rachel Warren: The crypto market is hotter than ever. Ethereum recently set a new all-time high while Bitcoin jumped above $ 69,000 today, on news that inflation was at its highest level in 30 years. Yahoo Finance recently reported that MicroStrategy CEO Michael Saylor compared his early support to Apple to that of Bitcoin, calling crypto the dominant monetary network that everyone needs.

In an interview with the New York Times DealBook conference, Apple CEO Tim Cook confirmed that he owns the cryptocurrency and that Apple is studying it, although there is no plan. for the company to accept crypto as a form of payment or whatever. .

My question for you is: what is your general investment philosophy regarding cryptocurrency, and do you think it can and should be part of a well-diversified long-term investment portfolio? Connor, what do you think?

Connor Allen: I think crypto can definitely be part of your wallet, and I think a lot of people are, and obviously it’s on a case-by-case basis, but it should be part of your wallet. He’s one of mine.

What’s good about Bitcoin in particular is that it’s the first asset class I’ve seen that gains credibility with a price increase. So you have stocks that usually when they go up people think the overvalued, overvalued price / sales ratio is ridiculous, and yadda, yadda, yadda.

But when Bitcoin goes up, everyone’s like, “Oh, I have to buy some,” and that’s kind of the credibility that it gets is that people believe in this thing. This is where the value comes from. Which is a whole different conversation and really weird. But that’s something that’s really cool for me about Bitcoin in particular.

Overall, I believe in crypto, but I also understand my shortcomings as an investor. One of them is not being able to understand everything about crypto. I understand the power of DeFi and the power that Bitcoin and other currencies could bring to the world. As I understand that.

I get the kind of mission statement, I guess you could say, from crypto and what it might become. But with all the technical details and everything else, I’m leaving that to other people because I really don’t understand that.

I have just invested in four cryptos, these are Solana, Bitcoin, Ethereum and Cardano. I don’t know which one will succeed or which one will fail. I just threw money on four eggs in the basket, and it’s only a small part of my overall wallet.

Connor Allen owns shares of Apple, Bitcoin, Cardano, Ethereum, and Solana. Rachel Warren owns shares of Apple. The Motley Fool owns stocks and recommends Apple, Bitcoin, and Ethereum. The Motley Fool recommends MicroStrategy and the following options: March 2023 long calls at $ 120 on Apple and March 2023 short calls at $ 130 on Apple. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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