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- 1 Alternative Investments- an emerging investment strategy.
- 2 Is cryptocurrency a viable destination for alternative investments?
Every successful business person and finance enthusiast asserts the importance of money distribution. Many believe that money distribution is a way of putting money into different streams. But the dedicated uses should also enable the investor to earn good yields.
Investing is putting money in avenues to generate revenue based on utility purposes. Real estates, gold, and stock investments are among the most desirable investments.
Gold, stocks, and real estates are the most secure places for investing. These investments have become prone to volatility, market fluctuations, and trend flows lately.
Alternative investments have become the next favorite destination for investors with huge pockets.
Alternative Investments are investments made in assets that are not traditional. This kind of investment provides the investor with portfolio diversification and higher earnings. Not only this, it also gives them a chance to mitigate their loss-making investments.
Unlike traditional investments, where anybody can invest, Alternative Investments usually allow high-net-worth investors. To invest in alternative investments, the investor needs to be financially literate. These non-traditional destinations demand critical analysis, product-specific knowledge, and handling skills.
These investment options have a relatively negative correlation with the market, ranging from -1 to 0. This way, alternative investments are less susceptible to market-associated risks. Alternative Investments has two categories- Tangible Investments and Intangible Investment.
In Tangible Investments, the investor puts his money in assets that can be seen and touched. These options generally have lower volatility and are less likely to get negatively affected by market movements. Examples include gold, oil, commodities, grains, and natural gas.
Intangible Investments do not have any physical appearance but have an intrinsic market value. These options include hedge funds, private equity, and venture capital. Usually, investors who wish to invest in corporate structures choose this kind of investment.
A recent addition to intangible investment is the inclusion of “Cryptocurrency”. Generally accepted accounting principles or GAAP has included cryptocurrency in the definition of intangible assets. Started as an idea with the launch of Bitcoin in 2008, cryptocurrency is now a booming digital investment industry.
While illiquidity is the core of alternative investments, cryptocurrency provides much faster conversion into cash. Earlier, crypto was considered a wild roller coaster ride. Crypto has become more regulated as countries recognize its innovative needs.
With Blockchain Technology constantly evolving, investing in its initial phases can be a plus point. Like private equity and venture capital, where investors put money into the idea in the early stages of implementation and enjoy returns after a few years, investing in cryptocurrency and yielding returns as the market grows can be considered a smart investment move.
But like any other alternative investment, investing in cryptocurrency also requires expertise. Regular data analysis, study of market movements, and upgrading the necessary skills are necessary.
The AI (Alternative Investment) bandwagon is a relatively new concept, and only people with abundant resources can invest in this emerging field. The future of investment still depends upon many market and human factors. Concludingly, a smart investment is one that is done keeping in mind the risk appetite.`
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
