If you want to be a smart investor you need to diversify your risks. That is how every successful investor stays successful, not just on Wall Street but also in Cryptocurrency.
See, if you invest in just one thing, there is always the chance that the one thing you invested in could be busted and you could lose all your money.
No one wants this to happen, which is why investors diversify their investments, so while one of the investments may be volatile, things will be alright overall.
This is exactly why you need to look at the winning investment combination of gold and bitcoin.
Why Gold and Bitcoin are Perfect Partners
In order to understand why this is such a winning combination you just need to look at how both these investments act. Gold and bitcoin are, in many ways, the opposite of each other.
Let’s look at bitcoin.
Bitcoin is very volatile – that is why people buy it! Its value can go up 200% in a month for no reason.
It can also go down the same way, though that is much rarer. Bitcoin is not backed by any physical asset, and has no intrinsic value at all.
Gold, on the other hand, is the true asset with intrinsic value. A few decades ago most of the world’s currencies were backed by gold.
Gold is literally the gold standard for investments that keep their value. Gold’s value hardly ever goes down and it is not volatile at all.
Even the increase in the price is very slow.
Then there’s the fact that gold is accepted all around the world without any problems. People generally don’t invest in gold – because it doesn’t give much of a return.
However, people do use gold as a money saving mechanism. Want to keep a lot of money without worrying about inflation?
Buy gold from it and keep it.
Gold and Bitcoin are perfect partners because they counteract each other. Gold doesn’t give you much of a return, but bitcoin gives you the chance of earning a very high profit.
Bitcoin is very volatile, while gold isn’t volatile at all. Bitcoin may have no intrinsic value but gold does. Basically, both Bitcoin and gold cancel out each other’s weaknesses.
Thus if you divide your investments into gold and bitcoin you get the chance to get the best of both worlds. You don’t have to worry about losing all your money – the part that is in the gold will always be safe and there for you.
You don’t have to worry about not growing your money either – the part invested in bitcoin will take care of that.
So while you will not be earning as much as someone who invested everything into bitcoin, you will also not be losing everything it the price of bitcoin starts to go down.
That is what makes it such a winning combination. You are simultaneously investing in one of the most rewarding yet risky investments and one of the safest investments in the world.