Choosing your cryptocurrency: what should you buy right now?
Earlier this week, Google announced its plan to reverse its widespread ban on cryptocurrency advertising, which the tech giant imposed in June. The ad ban caused bitcoin’s price to fall some 10 per cent when it first came into effect. Come October, regulated cryptocurrency exchanges will be allowed to buy ads in both the U.S. and Japan, however, initial coin offerings (ICOs), wallets and advice on trading will continue to be banned, according to CNBC.
Google’s move follows Facebook’s decision to reverse course on its own crypto ad ban, now allowing some forms of cryptocurrency-related advertising to take place on its platform.
With more advertising dollars about to be poured into the space, the crypto world is about to draw in more new investors.
So when faced with the top three cryptocurrencies, bitcoin (BTC), ether (ETH) and XRP (Ripple), which should potential crypto investors buy into? The answer is in how much risk you can tolerate, and the kind of risk you’re willing to take.
“After the rally of the altcoins in 2017, we have witnessed a transfer of value in the market from altcoins to bitcoin,” says Christophe de Courson, CEO of Olymp Capital, the first European investment fund covering blockchain and the crypto asset ecosystem. “The bitcoin dominance on the cryptocurrency market has gone up from its lowest point at 32.5 per cent on January 13, 2018 to 56.01 per cent on September 13, 2018.”
“Bitcoin is still the most sound [in the market] because it was the first decentralized cryptocurrency ever launched and successfully evolved through the years while gaining worldwide adoption, and it has evolved to be recognized as a new asset class on which regulators had to take a clear position on,” de Courson said in an email to Yahoo Canada Finance.
He also says the story behind the creation of bitcoin (and the mystery around its creator’s name) contributes to its “uniqueness” and adding cryptocurrenices like bitcoin to one’s portfolio could offer a new way to “diversify investor’s portfolios as soon as institutions integrate this new asset class in their financial products.”
Financial advisor and millennial money expert Jessica Moorhouse thinks the very ambiguity behind the birth of the bitcoin and its lack of regulation is what makes it volatile and unappealing to non-bullish investors. Moorhouse argues that cryptocurrency is not really an investment at all — it’s a currency.
“It’s really more of an asset that you could buy, but in my mind it’s so new, there’s little information and we don’t even know who created the coin” she tells Yahoo Canada Finance. Moorhouse says she often has clients asking whether or not to invest in crypto and she cautions against taking the plunge, for now, unless “you are high risk to tolerance and you’ve already got a bunch of stable assets in your portfolio and you just want to dabble.” Moorhouse compares the cryptocurrency appeal to what’s being seen with cannabis stocks.
“It’s kind of the same level as cannabis stocks because it’s volatile but kind of exciting so people want dabble, which is fine, but for the average investor like me it’s not something I think is a good idea at the moment,” she says. Moorhouse advises those interested (and willing to bear the risk) to invest only two to five per cent of their portfolio to crypto, adding she does not have a strong conviction for any of the coins.