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Posted September 05, 2021

Should You Invest in Crypto? - Cryptocurrency Investment

Yesterday I read an article on Forbes with the title “Should you Invest in Crypto” so I decided to write some my opinion on this thematic.

In today’s digital era, social media and crypto discussions are like peanut butter and jelly for millennials.

If you’re like me and you spend a lot of time online, you’ll see that investing in bitcoin, dogecoin and other coins is in vogue.

According to a survey from NORC, a research arm of the University of Chicago, more than one in 10 Americans invest in cryptocurrencies. 

Crypto investors tend to be younger (38 years old, on average) and more diverse than traditional stock investors, and 61% started their crypto journey in the past 12 months.

Of those who are still hesitant to dive in, 31% say they don’t know where to start. 

I find myself in a similar position. 

I still do not fully understand crypto, but as I read tweets about folks becoming bitcoin rich, I’m starting to wonder if my hesitancy is costing me.

Crypto Investing for Future

Should i Invest or it is Too Late

 

Anyone who thinks they’ve missed the boat needs to get one thing straight: You absolutely have not, says Isaiah Douglass, a millennial and certified financial planner at Vincere Wealth, in Indianapolis, who invests in bitcoin. 

When comparing the market value of bitcoin to established giants in the S&P 500 index, it becomes evident that bitcoin is just a tiny fraction of the global investment landscape.

Currently valued at around $800 billion collectively, bitcoin still has significant growth potential. 

For instance, Apple, the largest stock in the S&P 500, towers at $2.4 trillion.

Douglass firmly asserts, “Bitcoin isn’t a fad”, highlighting the increasing support for bitcoin within the U.S. Congress and the recent adoption of bitcoin as legal tender in El Salvador.

“But the price hasn’t followed the positive momentum,” he says. 

Young people who put some of their savings into bitcoin over time will be ahead of the “big money” investors who Douglass believes will follow over the decade.

Crypto and Stock Market

Blockchain-Technology for the Future

 

Douglass says his clients who invest in bitcoin have a conviction that blockchain—the technology tracking crypto transactions across a network of computers—is revolutionary.

It is important to say that they’re not investing money they can’t afford to lose, and their holdings are small, accounting for 1% to 5% of their overall portfolio.

Moreover, successful investors in bitcoin and other cryptocurrencies often implement a dollar-cost-averaging strategy.

This approach involves investing fixed amounts of money at regular intervals, allowing investors to benefit from market fluctuations over time.

How to Invest in Crypto

 

Before you put any money into cryptocurrencies, establish a core portfolio in line with your investing goals.

If you’re a young professional, that core will likely be funds in your employer-sponsored 401(k), or a traditional or Roth IRA.

Next, choose how to invest.

Most big brokerage firms don’t allow account holders to trade cryptocurrencies directly.

One solution is that you can invest in Grayscale Bitcoin Trust (symbol GBTC, $36), an investment fund that holds bitcoin tokens.

Note the pricey 2% expense ratio, compared with fractions of a percent for, say, an S&P 500 exchange-traded fund.

And be mindful that the trust’s shares can trade at a premium or discount to its underlying assets.

Another option is to go the fintech route.

Financial firm SoFi and broker Robinhood allow account holders to buy and sell various cryptocurrencies through their smartphone apps.

The risk – Your crypto funds aren’t insured by the FDIC or SIPC, meaning that if the institution goes under, your funds are gone for good.

Stock Market Trading

Source: Kiplinger

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