Should you include digital assets in your portfolio in 2024?
digital assets like cryptocurrencies and non-fungible tokens (NFTs) are increasingly capturing investor attention. Take, for example, MicroStrategy, a publicly traded IT company, known for its products in market intelligence, mobile software, and cloud-based services. They increased their Bitcoin holdings to 193,000, by adding 3000 new BTC coins on February 26. This purchase was made when Bitcoin was trading around $51,000-$52,000, bringing their total investment to nearly $10 billion.
While the potential for high returns is enticing, navigating this complex and volatile market requires a cautious and informed approach. Let’s explore the potential benefits and inherent risks of including digital assets in your 2024 portfolio, helping you decide if this investment aligns with your financial goals and risk tolerance.
What is a Digital Asset?
The term «digital asset» generally refers to anything that exists in a digital form and has value or ownership rights associated with it. Here's a breakdown:
Unlike traditional assets like land or gold, digital assets exist solely in the digital realm. They are not physical objects and can be easily stored, transferred, and replicated.
For something to be considered a digital asset, it needs to have some form of value, either monetary or intangible. This value can be derived from its use, ownership rights, or scarcity. Additionally, ownership of digital assets can be recorded and tracked electronically, often using blockchain technology.
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