The crypto-currencies such as Bitcoin or Ethereum to have triggered the frenzy of investors. Moreover, a speculative bubble is about to burst. Many warnings are prescribed by the investors. The latest warning comes from Fred Wilson, co-founder of Union Square Ventures. He advises investors to diversify their assets in bitcoins before it is too late.
He has stated on his blog on Sunday that he is confident that a big crash will occur. Unlike some people rather skeptical, Wilson believes the new currencies based on the blockchain. But he is also cautious and believes that certain businesses of Bitcoins do not yet understand the risks they face.
An analysis based on the personal experience of Wilson
Wilson has lost 90 % of its value recently. The remaining 10% come from two significant real estate investments, which eventually became the entirety of their net worth. He has indicated that his investment was not diversified. Their money has been integrated into risk-capital funds and they have not been able to overcome this situation.
Fred Wilson said if they had not sold Yahoo ! and other stocks to buy real estate and pay various taxes, they would have been completely ruined. While the american economy seems to still be stable, the Bitcoin is already on the decline in recent times.
How much to invest in crypto-currencies ?
The crypto-currency continues to resonate with many investors. Moreover, a considerable increase has been recorded between march and June, before reaching a historical peak of 4 us $ 765 on the 1st of September. But for this investor, it is recommended to put this money in other assets. The diversification of the investments became paramount for him.
According to him, the portfolio would be ideal to conserve the assets of cash. If its capital has only 5 % in crypto-currency, it recommends an investment of 10% to 20% for young investors. However, capital preservation is a question of diversification.