4 Checklist Items to Guide Potential Bitcoin Investors

Bitcoin investors should be aware of the flagship cryptocurrency being a speculative investment. According to CapWealth Advisors executives Hunter Yarbrough and Drew O’Connor, it is important for these investors to seek careful guidance in their decision-making process regarding Bitcoin investment to prevent possible large-scale losses.

We find this informative article worthy of sharing with our readers, specifically those pondering pouring their hard-earned investment funds into Bitcoin. We believe likely Bitcoin investors can benefit from their venture if they learn about the key insights that the CapWealth financial advisors offered.

Based on the article posted online by The Tennessean, a press organization based in Nashville, Tennessee in the United States, Yarbrough and O’Connor cited that Bitcoin investors are typically allured with the cryptocurrency because it is the most widely used crypto-asset today.

Based on the Coinmarketcap.com charts, Bitcoin has taken almost half of the market share among thousands of cryptocurrencies. Additionally, Yarbrough and O’Connor mentioned in their article that Bitcoin has considerably grown from approximately US$1 to its highest level reached last April of more than US$64,000.

At the time of writing, one Bitcoin trades as US$48,222.04, per the information posted on CoinGecko.com. Bitcoin investors are also lured in investing in this virtual asset as it has averaged a return of more than 200 percent per year over the past decade.

This figure is certainly more incredible than the S&P 500 stock market index’s annualized return of merely about 16 percent per year, based on Yahoo! Finance and Morningstar.com’s information. Yarbrough and O’Connor issued the following four checklist items for Bitcoin investors to keep in mind before pushing through with their investment pursuit.

1. HISTORY

Yarbrough and O’Connor affirmed that Bitcoin is a speculative investment. Thus, they warned potential Bitcoin investors to keep in mind the events related to this investment asset.

The CapWealth Advisors executives mentioned Tulipmania in Western Europe that happened in the 1630s. This speculative investment-related happening is when Dutch investors started purchasing tulips, dramatically driving these flowers’ price, but only to witness these costs and their investments’ collapse.

2. RISK

Yarbrough and O’Connor warned interested Bitcoin investors that the flagship crypto-asset is a highly volatile investment asset. Bitcoin’s trading price may fluctuate dramatically even within seconds.

With the very high risk involved, possible Bitcoin investors need to feel comfortable with the potential losses.

3. PERFORMANCE

The CapWealth financial advice experts remarked that Bitcoin might continue its upward trajectory for some time. Nevertheless, they cautioned investors that past performance does not indicate future outcomes.

4. VALUATION

Yarbrough and O’Connor advised Bitcoin investors should keep in mind that trading this crypto-asset is based entirely on sentiment. This virtual currency lacks economic fundamentals to back any valuation.

Meanwhile, stocks have underlying value based on a business organization’s profits. This fact offers a logical basis to invest. We are well aware that most Bitcoin holders purchase this virtual asset as an investment. They speculate its trading price will surge.

We find the CapWealth financial advice professionals’ insights very helpful, especially for potential Bitcoin investors. By keeping the abovementioned checklist items in mind before investing, we believe Bitcoin investors can find themselves in an advantageous and safe position in their investment journey.