Antonopoulos: Only Invest a Percentage Equivalent to Your Understanding of Bitcoin
Andreas Antonopoulos, the prominent bitcoin and security expert who has spent the past few years providing insights into the cryptocurrency market by providing presentations and hosting talks at meetups, conferences, and events, has recommended investors and traders to only invest an amount that they are willing to lose when including bitcoin and cryptocurrencies to their portfolios.
At Coinscrum, a conference hosted by the prestigious research institution Imperial College in London, Antonopoulos revealed that he has invested 100 percent of his personal savings into bitcoin and a portfolio of diversified cryptocurrencies and crypto-assets. But, he emphasized that it is important for investors to invest an amount that is proportional to their knowledge and expertise in bitcoin and cryptocurrencies.
“What percentage of your wealth should be tied up in bitcoin? A percentage that is equivalent to your understanding of how the technology works and your ability to absorb the risks it entails, which for most people is a small percentage” said Antonopoulos.
In response to a question from one of the attendees at the Coinscrum UK event, Antonopoulos noted that the majority of his savings has been invested in bitcoin and cryptocurrencies because he has invested most of his career and intellectual capacity in the development of the bitcoin industry and market. But, Antonopoulos stated that his investment strategy should not be implemented by casual investors that are still learning the technology and the structure of bitcoin.
“My small savings that I do have are invested in bitcoin. 100 percent [of it]. I actually have a tiny debt in US dollars that I’m still trying to pay off so it is more than 100 percent in bitcoin. Now, I’d like to emphasize again, that is not a recommendation to invest. Because I haven’t invested by money in bitcoin, I invested my career, my intellectual capacity, my creativity energy, my passion, and my work in bitcoin. The money is the least of the investment that I have made in bitcoin and I could lose everything of it and I’d still have everything else.”
Antonopoulos also encouraged investors to invest in bitcoin and cryptocurrencies for education, not speculation.
In the traditional finance and technology markets, several multi-billionaire investors such as Marc Cuban and Tim Draper have also made investments in bitcoin. Cuban, who is still trying to understand bitcoin as a technology, revealed to Bloomberg that he has purchased several bitcoins through the Swedish Nordic Nasdaq, by purchasing shares in XBT Provider, a bitcoin exchange-traded note (ETN). While Cuban had been a critic of bitcoin for many years, recently, he has started to acknowledge the growing demand for bitcoin and cryptocurrencies.
In the contrary, Draper, a highly successful billionaire early-stage technology investor and venture capitalist, has invested large amounts of capital in bitcoin, even purchasing a batch of 30,000 bitcoins from the US government in 2014. From that investment alone, Draper has profited over $110 million in less than three years.
But, like Antonopoulos, Draper has been a key figure in the cryptocurrency sector since 2013. Draper invested in regional bitcoin exchanges in Mexico, South Korea, and Japan, along with other innovative blockchain companies such as Factom. Korbit and Coinplug, two companies which Draper funded in 2014, evolved into major bitcoin trading platforms in the South Korean market. Recently, Korbit was acquired by NXC, the parent company of the $10 billion gaming company Nexon, at a valuation of $140 million.
Draper has made significantly large investments in bitcoin relative to his other investments in his portfolio because of his firm belief in bitcoin as a technology, a digital currency, and a store of value. Like Antonopoulos, Draper has allocated most of his intellectual capacity, resources, and effort in improving the global bitcoin industry and cryptocurrency market.
For new investors, casual traders, and potential investors that are planning to invest in the cryptocurrency market, it is vital to create a portfolio of cryptocurrencies such as bitcoin at a size which is directly proportional to their knowledge and understanding of cryptocurrencies.