- Diversifying your portfolio may help you optimize potential returns.
- It isn’t easy to decide what cryptocurrency to invest in.
A modest percentage of Americans have invested in cryptocurrency, with roughly 11% of Americans have done so. Here are a few great reasons why to invest and not invest in Crypto.
Why Invest in Crypto?
Diversifying your portfolio may help you optimize potential returns while reducing risk. However, unlike stocks and bonds, cryptocurrencies may provide large returns if you do your homework and choose the proper coins to invest in. If you already have stocks, bonds, and ETFs in your portfolio, adding Crypto might help diversify it.
Because cryptocurrencies are still a new asset, it’s feasible that some may perform even better in the future. If any of the currencies attain general recognition, shops will start accepting them as payment, and new applications for the blockchain technology that underpin several coins will be developed. If you do your homework and locate a cryptocurrency that has a lot of promise, you may make a lot of money with it.
Why should you not invest in Crypto?
Most cryptocurrencies are new compared to conventional assets like equities of well-known US corporations or investments. That exposes you to financial indexes like the S&P 500. It isn’t easy to decide what cryptocurrency to invest in when historical results are a solid indicator of future success. This raises your investment risk and makes estimating their future potential harder.
Many cryptocurrencies have huge price swings. Random occurrences like a celebrity tweet, endorsement from an influencer, or social media attention can drastically send the price up (or down). Investing in them is riskier due to their volatility. If you’re not comfortable with the risk, can’t afford to lose the money you’re investing, or don’t already have some safer investments in your portfolio, you should acquire other assets first.
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