Why Novogratz and Shakespeare are Right About Investments

Why Novogratz Is Right

If you are in your 20s or 30s, you might one day find yourself telling your grandchildren about how you were around when Bitcoin was invented and watched it go mainstream. If Bitcoin is still the “in thing” by then, you would be much happier telling that story if you bought and held Bitcoin or contributed to its growth in some other way. It would be sad to say you were around, heard about it and took no initiative. Mike Novogratz, Galaxy Digital Capital Management boss, is of the view that it is almost irresponsible to not invest in cryptocurrencies. Here is why his statement makes sense.

His Reasons

On CNN Money, Mike Novogratz talked about the recently launched cryptocurrency index. The index which covers about 10 cryptocurrencies was created by himself and Bloomberg. During the interview, he stated that every investor should invest between 1% to 2% of their portfolio in cryptocurrencies. He went on to say that it would be almost irresponsible on the part of investors who did not do so.

Novogratz’ reasons were not just about the returns to be made from cryptocurrency investments. He based his statement on the belief that the technology behind cryptocurrencies would be soon causing radical changes in almost every industry.

More Reasons to Invest in Bitcoin, Diversification is an Old But Good Strategy

You don’t have to go all in on Bitcoin or cryptocurrencies in general. In fact, going all in on anything is probably a bad idea. Here is an interesting quote from Shakespeare’s merchant of Venice that captures what is being talked about.

“My ventures are not in one bottom trusted,
Nor to one place; nor is my whole estate
Upon the fortune of this present year:
Therefore my merchandise makes me not sad.

The key is to not have all of one’s investments in one venture. No matter how much conviction or power we have, we do not have control over all happenings in the world. The point is that things beyond our control could happen. Diversification is, therefore, a hedge against such unexpected events.

Now, if you are going to diversify, the question is, why not include Bitcoin or other cryptocurrencies in your portfolio. It’s almost a decade since the technology was invented. The cryptocurrency community has long moved from being tagged as one of criminals or jokers. It’s actually cool to know about and own cryptocurrencies now. So, once again, why wouldn’t one have at least a little bit of crypto in his investments. From this angle, Novogratz seems to be right. It is irresponsible to not invest in cryptocurrencies at the moment.

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