Is Now the Right Time to Invest in Cryptocurrency?

Cryptocurrency is an attractive option for those looking to gain direct exposure to the demand for digital currency. While it can be a potentially lucrative investment, it's important to be aware of the risks and volatility of the market before investing.

Cryptocurrencies

such as Bitcoin can experience daily (or even hourly) price fluctuations, leading to uncertainty and fear of missing out or participating. To make sure you're making the right decision, it's essential to do your research and understand the market.

Cryptocurrencies are very risky and not like conventional investments in the stock market. Investors should expect cryptocurrencies to remain volatile. What's more, the historically risky asset hasn't been tested in an environment like the one we're seeing today, where interest rates are going to rise, according to Ross and Johnson. Given the old investment adage “buy the fall”, investors may now be looking for a slice of the volatile cryptocurrency market in the hope that this will mark a temporary recession rather than a long-term bear market.

That's why it's important to invest only what you're willing to lose and stick to more conventional investments for long-term wealth creation. Investing in cryptocurrencies is not for everyone and should be based on an assessment of your own personal financial situation, needs, risk tolerance and investment objectives. There are also some funds and investment funds that are exposed to cryptocurrencies, which is a less risky way to invest than buying the coins themselves. Rather than learning how to navigate a cryptocurrency exchange to trade your digital assets, you can add cryptocurrencies to your portfolio directly from the same brokerage that you already have a retirement account or other traditional investment account with.

For every cryptocurrency you invest in, make sure you have an investment thesis on why that currency will stand the test of time. Much of this is because cryptocurrencies have become widespread and are being treated as just another speculative investment by buyers and traders. In general, the more accessible cryptocurrency assets are within traditional investment products, the more Americans could buy and influence the cryptocurrency market. Investing in cryptocurrencies that are not particularly well known or that are not well supported is fraught with serious risks. If you do your research and learn as much as possible about investing in cryptocurrencies, you should be able to manage investment risk as part of your overall portfolio.