Cryptocurrency’s popularity has grown exponentially in recent years, with millennials now more likely to know someone who has become a crypto millionaire. As a result, some are wondering if they’re too late to invest in digital currencies. But what exactly is cryptocurrency, and is it still worth considering? Experts weigh in on whether the “Trump effect” played out and how much investors should risk.
Cryptocurrency is essentially digital money that exists on decentralized networks using blockchain technology. The leading brand, Bitcoin, recently crossed the $100,000 threshold, sparking interest among potential investors. However, experts caution that cryptocurrency investments are highly volatile and unregulated.
“It’s not too late to start investing in cryptocurrencies,” says Caleb Silver, editor-in-chief of Investopedia. “But ask yourself: Why? Profiting from bitcoin’s rise may be your primary reason.” Bernd Schmid, contributing crypto analyst at The Motley Fool, agrees, stating that crypto adoption is similar to internet adoption in the late 1990s and early 2000s.
However, not all experts are convinced. Bryan Armour, director of passive strategies research for Morningstar Research Services, advises caution with crypto investments due to high volatility. Jonathan Swanburg, a certified financial planner, takes a more skeptical stance, suggesting that investors should be cautious about investing in cryptocurrency, especially at high prices like $100,000.
So, how much can investors risk? Experts recommend limiting investments to no more than 5% of the portfolio for those new to crypto or asset classes. This figure can help mitigate the risks associated with wild volatility.
Ultimately, it’s essential to consider individual financial goals and risk tolerance before investing in cryptocurrency. While the “Trump effect” may have played out, regulatory developments are on the horizon, which could further boost prices.
For those looking to dip their toes into crypto, opening an account with an online broker and buying individual tokens or purchasing spot bitcoin ETFs can be a starting point. Some recommended ETFs include iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund due to low costs and ease of trade.
Source: https://eu.usatoday.com/story/money/2024/12/11/bought-bitcoin-crypto-too-late/76859644007