Investing During a Crisis: Bitcoin or Stocks?
Opinions vary on whether investing in Bitcoin and the crypto market or in stocks is the better move.
Opinions vary on whether it's better to invest in Bitcoin and the crypto market or in stocks. The "investment pioneer" Gerald Hörhan offers some tips investors can profit from.
Whether it's Bitcoin, Altcoins, or the traditional stock market: the macroeconomic situation hasn't spared any asset class. The current bear market has a tight grip on the market. So looking at the portfolio isn't exactly fun. In this context some investors wonder if diversification toward stocks makes sense.
Bitcoin versus stocks: pros and cons
According to Gerald Hörhan, Bitcoin and other cryptocurrencies show their strength in times of crisis, especially for people following a savings plan, closely followed by tech stocks. This is because they offer low entry prices in weak market phases with high upside potential in the long run; at the same time the savings plan works best with highly volatile values like cryptocurrencies or tech stocks.
You can also generate passive income on your crypto portfolio by staking or providing liquidity to pools. However, you need a solid foundation—because potentially high rewards also come with increased risk.
With stocks, on the other hand, there is the possibility of receiving dividends. The downside: taxes of up to 30 percent are levied, and in some cases withholding taxes apply. Many dividend-paying stocks have relatively small price fluctuations, so not much moves. Moreover, companies that aren’t profitable in a crisis typically cut dividends. So for passive income the takeaway is: cryptocurrencies are indeed riskier than traditional stocks. They also offer greater upside potential.
Inefficient Bitcoin market offers opportunities Trading can also be lucrative by grabbing Bitcoin and cryptos. While the traditional stock market is firmly in the hands of professional traders, hedge funds, etc., private investors can also execute good trades in the crypto market. It’s easier to make money here because the market is far more inefficient. It’s also possible to trade in many smaller tranches than on the traditional market. Clear advantage for Bitcoin and other cryptocurrencies.
For the investment pioneer one thing is clear: a portion of the portfolio should certainly consist of crypto investments. It’s important not to invest blindly in coins here. You need to be much more actively involved, and for that you need structured investment systems. Only this way can you make informed decisions — this applies especially in the current market.
In any case, in the current bear market Gerald Hörhan is expanding his crypto portfolio to take advantage of favorable entry prices with accelerated savings plans, as he puts it. With this portfolio of holdings, the next step is to generate passive income on his portfolio through DeFi models and trading, similar to rental income. And good risk management and an efficient tax structure ensure that the wealth actually grows with this strategy.
Bear market strategy
Ultimately, it’s important to stay cool-headed and have a solid strategy in the current market. To not only help people find such a strategy but also implement it consistently, Gerald Hörhan, together with David Hoffmann, launched the "Crypto Yield Training."
Participants in this program gain exclusive insights and personalized coaching from two investment professionals. Prospective investors and traders learn everything they need to know about properly handling Bitcoin and other cryptocurrencies.
