Is Crypto the future or hype?

 

What is CryptoCurrency?

A cryptocurrency is a form of digital asset based on a network that is distributed across a large number of computers. This decentralized structure allows them to exist outside the control of governments and central authorities.

Source: Investopedia

Recent Hype about Crypto

Today, every investor, either Retail or Institutional has the same doubt "Whether to have crypto exposure". This goes back to 2017 when bitcoin experienced a meteoric rise.

This year in February, Billionaire Elon Musk has invested around $1.5 billion in Bitcoin, and his several tweets further pulled investors to invest in the hype. A single tweet from Elon Musk has made the bitcoin surge by over 15%. His company Tesla has also started accepting Crypto as payment for their cars.

Today market capitalization of bitcoin is almost half the size of the Indian stock market. 

Should portfolios have Crypto exposure?

Crypto's come under the alternative category. These are investors who are looking for investments other than stocks and bonds. Like Gold, these should be investments to beat inflation. As the famous quote says "Don't put all your eggs in one basket", it is always good to have a diversified portfolio.

Again, it depends on the risk-taking ability of the investor. For any individual who is worried about the volatility, I would suggest not investing in crypto.

Risks associated

In India, the debate between the Crypto holders and the government is an ongoing topic. While the Reserve Bank of India has not regulated it, there are still optimistic investors about the future of crypto in the country. The Government has already intended have plans to launch their own virtual currency. This might disappoint many investors.

Conclusion

To conclude, crypto should definitely be included in the portfolio. But, I would suggest looking beyond bitcoin. There are many alternatives like Etherium, Ripple(which I am currently invested in), and litecoin.

The above are my personal views and this may or may not happen in the future. This should not be taken as investment advice.