Salvador has officially adopted bitcoin as its currency, while countries like India are still mulling over crypto's position in the financial space. Bursting onto the scene in 2008, crypto has gone mainstream in the 2020s. Is it finally the time for physicians to add cryptocurrencies to their asset portfolio, or are the crypto coins still volatile enough to stay away?
As of Dec 16, 2021, the market cap of healthcare cryptocurrency coins stands at $848.21M. To put those numbers in perspective, the global healthcare industry spends $8.8 trillion every year, $3.8 trillion of which is accounted for by the United States. So, it would not be wrong to conclude that the numbers for medical crypto are only going to rise in 2022.
The fears of investing in crypto
Before we explore the reasons why a physician should add crypto to their portfolio class, we need to understand what holds them back.
Some of the conclusions they come to are:
- The crypto space is still relatively new
- The coins are too volatile
- Is it secure? I don't know what exactly happens to my money.
- It's all a buzz
- The dramatic ups and downs are jarring. I can not put my money into something like that.
We need to understand that anything new brings a new set of skeptics. Forget the rise of the internet, even something as trivial as bicycles were criticized.
The lack of education on how the crypto industry works is one of the key reasons we fear it
Research has shown that people are able to make the correct choice 90-95% of the time once they truly understand the technology behind crypto trading.
Also, people tend to buy when the market is going up. That's when FOMO (Fear of missing out) comes into play. It's worrisome to invest a large amount of money without conducting proper due diligence first.
So, if you want to rise above your fears, educate yourself and talk to people who have authority on the subject before moving further.
Taking part in the medical crypto industry
If you are in the second boat and ready to get your hands dirty in the crypto sphere, make sure to not stop at bitcoin. Whether we admit it or not, bitcoin is the first thing that comes to mind when someone talks about crypto. Did you know that there are more than 2500 cryptocurrencies? And that number is only rising by the day!
In the healthcare cryptocurrency space, MediBloc (MED) and Humanscape (HUM) are market leaders at the time of writing. MED is priced around $0.05 and has a market cap of $311.78M, while HUM is priced at $0.31 and has a market cap of $224.66.
Crypto allows you to invest in what you believe. You can diversify your portfolio rather than going big on only one coin or two coins.
Should I invest in cryptocurrency?
That brings us to the biggest question of all. Taking everything into account, should you or should you not invest in cryptocurrency?
Crypto is still growing and is far from anything stable. But missing out on it is similar to missing out on the dot com boom. The blockchain sector is often touted as transformative, with the potential to disrupt the world in the same manner that the Internet did in the 1990s.
But start only after you have taken the time to understand the most common pitfalls that succumb novice investors.
Crypto is volatile, so begin with the amount you are willing to lose. Once you are familiar with the know-how, start compounding. The next obvious question on your mind would be -- what percentage of your portfolio should you keep aside for this asset class?
To be blunt, we can't state a number for you. The number will differ in each case. The best way to find out would be to get in touch with your financial advisor. Consult someone close to you who is sound financially if you don't have a financial advisor.
Also, layout your financial goals and decide if you want to go short or long-term on crypto investments. The next step would be to prepare a budget and keep an emergency fund, which can go for at least three months.
Then, the final step would be to -- dive in.
Investing in cryptocurrencies has the potential to make you very wealthy. But, before you jump in, make sure you're comfortable with your decision.
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Note: These are the personal views and opinions of the author and should not be considered as investment advice.