Should I Buy Bitcoin Now?

Good morning and how are you doing??

Friday letters are usually dedicated to taking questions from our community. Do you have a question for us? Please feel free to send an e-mail to [email protected] or a DM to any of our social media channels.

Question?

I need advice on the best stock to buy.?

Answer?

As we know, investing in the stock market is a high-risk investment, which is why you need to do a thorough research before buying any stock.?

Everyone has a different perspective of what is best for them, so you need to think about what is best for you.

How long do you want to invest for? Long or short term?

How much do you have to invest?

What industry are you interested in?

Is this your first stock?

You need to answer all of these questions, to know what stock to actually buy.?

After answering all of these questions, you can then pick between a growth stock or a dividend stock. Which do you think would suit your decision??

Growth stocks are those that usually grow faster than its peers in the industry or the market at large. Companies with growth stocks are in their growth stage. They do not pay dividends.

Examples of companies with growth stocks are Tesla, Amazon, Facebook, Shopify, Square, Alphabet and so on.

Dividend stocks are, however, less risky as it comes with regular payment and it’s with more established companies.?

Examples of dividend stocks are those from AT&T, Coca-Cola, IBM. This is not investment advice in any way.

Question

I have ?300,000 and I have plans to start a photography business. Do you think I should use the money to get a camera, or should I invest it in crypto?

Answer

You need to think about the risk of both investments.?

Are you sure about getting returns from your photography business? If yes, how soon will it take to recoup the invested capital?

How soon do you want to start the business??

Would ?300,000 be enough for you to start your photography business?

Also note that cryptocurrency is a very high risk investment, which means that there is a possibility that you could lose the money.

You could divide the money and invest in less risky assets to get enough money to start your business.?

Question?

Can I buy Bitcoin now?

Answer

Bitcoin, the biggest cryptocurrency by market cap, hit an all-time high on Wednesday.

The coin climbed as high as? $67,000, beating April’s record of $64,000.

This increase was due to the launch of the first Bitcoin Exchange Traded Fund (ETF) in the US (ProShares Bitcoin Strategy ETF - BITO).?

An ETF is like a basket of different investments assets sold as a single investment asset.?

It is like a candy jar mixed with different types of candies. Buying one candy jar means you are buying all of the candies in that jar.?

This helps with diversifying your investment portfolio.?

Bitcoin ETFs would track the value of Bitcoin and trade on traditional market exchanges rather than cryptocurrency exchanges.?

This allows investors to buy into the ETF without going through the complicated process of trading Bitcoin itself.

To answer your question, it is best to have a long term view when it comes to investing in Bitcoin. If you regard Bitcoin as an investment, and believe that it has more room to run, you can decide to cost-average, that is, buy a specific amount periodically.

Please note that Bitcoin is an extremely volatile asset class. Because of its back-and-forth swings, it is best to invest only money you can afford to leave for the long term.

Did you find this newsletter useful? Please feel free to share it. You can read previous newsletters here