Cryptocurrency – Meaning, Definition, And Impact

Should You Invest in Cryptocurrency?

There are mixed opinions on whether or not one should invest in cryptocurrency. Since crypto is a highly volatile and speculative investment, some advisors don’t recommend investing in crypto. For example, Bitcoin quadrupled in 2020, with an EOY value of over $28,900.

However, by April 2021, the price doubled from the starting price and lost all the profits by July. It has been going up and down since November 2021, proving the volatile nature of cryptocurrencies. This is why Peter Palion, a certified financial planner (CFP) in East Norwich, N.Y., thinks it’s safer to invest in a fund that the government backs like the US$.

Having U.S. Dollar reserves means you can pay your mortgage and bills. Compared to Bitcoin, the U.S. Index is pretty stable. Peter Palion says that “Something that drops by 50% is not suitable for anything but speculation.” However, if you wish to invest in cryptocurrency, make sure your portfolio is large enough to handle the volatility.

Investing in a new market shouldn’t derail your long-term plan should the investment make severe losses. If you’re wondering how much to invest, it’ll depend on how much you currently have and what you have at stake – from a loss perspective.