Cryptocurrency investing has become a hot topic over the last five years, and because of how its popularity has risen, long-term investors could worry that cryptocurrency investing may seem like the wild west of finance. One thing we can say is that it’s starting to appear that crypto is here to stay.
What Makes Cryptocurrencies a Good Investment?
First and foremost, cryptocurrencies are starting to gain recognition and acceptance from more people, businesses, and institutions. In addition, central banks (worldwide) are also working on digital coins of their own. So, the digitization of everything money-related is on the horizon.
Consider this: investing in cryptocurrencies is a great way to diversify your currentfiat-based portfolio—especially your retirement portfolio—as you become an early adopter ofcrypto trading, relative to the rest of the world.
The recent attention drawn to cryptocurrencies has piqued the interest of regulators, and there are legal off-the-blockchain products available in which to invest. For example, there are CME hosts bitcoin futures products, and there are also many cryptocurrency ETFs for investment as well. In addition to these investment platforms, people are also looking into their retirement accounts, including their IRA and 401(k) accounts, for cryptocurrency investing due to potential associated tax advantages.
Pros of cryptocurrency investing:
- It can help you diversify your retirement portfolio
- Crypto is becoming more widely accepted
- Potential for high scale with long-term investments
Are Cryptocurrencies Risky?
The most widely talked about risk associated with well-known cryptocurrency names is its volatility. While the broader market is experiencing a good amount of unpredictability at the moment, cryptocurrencies tend to have wider price swings (on a daily basis) than some of the more popular stocks and ETFs.
Additional concerns of cryptocurrency investing tend to vary upon each individual investor. It’s important to note that not every coin will yield 1000% returns, as many are coming to realize. Like the threat of any stock, cryptocurrencies may experience hype before becoming vaporized when a significant player sells at the top, regardless of the project’s validity behind the coin.
So, simply opening a wallet and buying coins at random may not be a viable strategy. That said, smart investors wouldn’t necessarily do that with stocks, real estate or other types of investments either.
Risks of investing in cryptocurrencies:
- Cryptocurrencies, on average, tend to be driven by speculation
- Going into cryptocurrency investing with outlandish expectations may not always result in outlandish gains
- Many invest in projects without doing their due diligence nor the proper research
Is Cryptocurrency a Good Investment?
Yes, it can be if the right strategy and due diligence are employed. It’s highly recommended for cryptocurrency investors to take the time and make the effort to educate themselves and do their research. This way, they can be better equipped to make thoroughly thought-out investment decisions to diversify their portfolio. Doing this gives them the potential to fare well with cryptocurrency investing.
As always, the use of risk parameters that are appropriate for your portfolio while taking advantage of these technologically innovative high-growth assets is highly recommended. BitcoinIRA offers a range of self-directed IRA options along with easy solutions for converting your fiat into crypto, all with just a few clicks via their mobile app or on their website.
Questions on getting started with cryptocurrency investing in your Bitcoin IRA account? Our specialists are here to help! Call us at 877-947-4125 or email us today.
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