Crypto and Investment

Today, Bitcoin is the largest crypto asset, both in terms of value and number of users. In recent years, the value of Bitcoin has continued to show a significant increase. In June 2017, Bitcoin was trading at around US$2,900. 5 years later, in June 2022, 1 BTC is worth around US$30,000.

Bitcoin investment is considered quite profitable in the long term. So, don’t be surprised if Bitcoin investment is getting more and more popular lately. However, please keep in mind that like most crypto assets, the price of Bitcoin is volatile. So if you look at price movements in the near future, such as a matter of weeks or months, it turns out that the ups and downs are quite significant.

Bitcoin is a profitable asset in the long term

Bitcoin investment is sometimes unpredictable when it will go up or down. So, don’t be easily tempted by big profits in a short time. This often makes investors, especially beginners, make emotional decisions that lead to big losses.

The risk of loss actually exists, regardless of the investment instrument. However, you can prepare a plan to minimize the impact of these losses. You need to set a limit on how much funds will be used for investment. Before starting to determine how much money you will invest as capital, try asking yourself this question: ‘if the worst case scenario is that I lose and my investment funds are lost, how much money will I be willing to lose?’

Use cold money to mitigate risk

Of course, the amount of money should not interfere with your living expenses. For that, you can invest with cold money. Cold money is the remaining unused funds, after all your income has been deducted by important items. For example, the cost of living, savings, installments, repayment of debt, and other basic costs.

Assume you have a monthly income of $500. After deducting food, transportation, monthly rent, savings, and other expenses, your salary is $350 left. All you can use for investment is the $350. As much as possible, do not get more than that amount.

If you take investment funds from basic necessities, you are worried that you will experience difficulties if your investment loses. For example, you have funds of two million rupiah to pay rent. Then, you try to play with prizes using one million rupiah from these funds for Bitcoin investments, in the hope of making a profit.

As it turns out, in the next month the price of Bitcoin drops and your investment fund is now only $200. As a result, you have to rack your brain again to add to your lack of rent money in the next month. Therefore, you should avoid investing using money that will interfere with your basic needs.

Small capital investment? No problem!

If you are worried that your money will be used for other things that are not classified as basic needs, another way to work around this is to set aside some money at the beginning. First, calculate how much you need in one month. If there is still some left, then take some and secure it as an investment fund.

What if you only have a small amount of money left? Don’t worry, you don’t really need big funds to invest in Bitcoin or other crypto assets. Little by little but consistent, then over time you will be able to enjoy the results. Moreover, there are now many crypto exchange platforms that allow you to start investing with small capital.

Republic: Investing in Fine Art!

If you have even a penny in the stock market right now, you probably know that it’s been a bit… chaotic lately. Rising inflation, continuing supply chain issues, new COVID-19 variants, and a spate of other global issues have all contributed to wild swings in publicly-traded share prices.

And with the S&P 500 down almost 14% YTD, it’s no surprise that money managers and investment advisors are turning to alternative assets—like real estate, startups, and collectibles—to ride out the storm.

As a marketplace for alternative investment opportunities, Republic has always been a one-stop shop for investors looking to diversify into startups, crypto, video games, real estate, and more. Today, we’re excited to introduce a new kind of alternative asset to our platform: fine art.

Investing in art: a brief history

André Level, an art critic and dealer known for his early support of Matisse and Picasso, pioneered the first modern art investment fund—a collection called La Peau de l’Ours—at Sotheby’s Paris in 1904. (Fun fact: “la peau de l’ours” loosely translates to “counting one’s chickens before they’ve hatched”—a cheeky nod to the optimism and confidence Level approached his investments with.)

Joined by 11 of his friends, Level amassed a collection of Impressionist art, including pieces by Picasso, Matisse, van Gogh, and many others. When the collection sold at auction 10 years later, the men quadrupled their money and even shared some of the proceeds with the artists themselves.

Today, fine art remains one of the most popular alternative asset classes for the ultra-wealthy. Here’s why:

Art investment by the numbers

Talk to anyone who considers themselves an art collector, and you’ll immediately understand that these assets are much more than just decorations—they’re often strategic investments, too. These are just a few of the qualities that make art investments such attractive additions to a diversified portfolio:

A massive market

The global art market was worth more than $65 billion in 2021, with over 36 million transactions completed worldwide. Last year’s highest-priced sales spanned a range of styles and origins; the most expensive piece sold was a Picasso painting, Femme assise près d’une fenêtre (Marie-Thérèse), that went for $103.4 million. The 10 most expensive sales alone accounted for a whopping $786.9 million in proceeds, signaling a healthy consumer appetite for fine art.

A promising track record

A report by Citibank found that between 1985 and 2018, the art market as a whole returned an average of 5.3% annually—much higher than any high-yield savings account on the market today. Zoom into the contemporary art category, and that annual yield jumps to 7.5%. In fact, in 2018, the art market’s returns outpaced the S&P 500.

Portfolio diversification as a strategy

Statistically speaking, diversification is one of the best ways to hedge against risk and boost your chances of making a return. That’s why most professional money managers recommend spreading capital among many different asset classes (think: stocks, bonds, real estate, startups, and more). Investing in art is a unique way to add diversity to any investment portfolio.

Resistance to market swings

Part of what makes art so attractive is the fact that its performance isn’t correlated with any of the other major asset classes (think: the stock market). That means market downturns may have less of an influence on fine art investments. During the Great Recession in 2008, all types of art lost an average 4.5% in value; at the same time, the S&P nosedived by a whopping 37%.

Investing in art on Republic

As Republic continues to expand, we’re thrilled to broaden the scope of our deal flow to include important cultural assets—art included. Check out our live art offerings below, and keep an eye on your inbox. There’s much more exciting deal flow in the pipeline!