Cryptocurrency has been all the rage in recent years, especially as Americans have tried to find nontraditional paths to financial stability in an increasingly volatile economy. (It’s a little scary out there nowadays!) But is crypto investing really the answer? The Sum takes a closer look and provides some tips.
TO SUM IT UP
- Around 31% of people ages 18-29 have invested in, traded or used crypto. But does that mean it’s a good investment?
- People have lost hundreds of thousands of dollars during pandemic-era crypto crashes with no way no way to hold exchanges accountable.
- By taking time to research cryptocurrencies and exchanges and proceeding cautiously, first-time investors can avoid a lot of issues down the line. Read on for some tips!
- Cryptocurrency is a digital asset that uses blockchain as a secure and decentralized “ledger” to confirm transactions.
- Crypto users don’t have to rely on banks or governments to “hold” those transactions, thus giving more autonomy.
- Instead, people “purchase” cryptocurrency through exchanges, which convert traditional currencies (such as the dollar) to digital versions.
- Consider investing conservatively in more reputable cryptocurrencies like Bitcoin or Ethereum to start. Experts recommend not investing more than 5% of your portfolio.
- Make sure you’ve securely saved your information to access your money. If you lose a password, it’s harder to access than with a traditional bank.
- If a particular cryptocurrency or exchange seems too good to be true, it likely is.
WHY IT MATTERS
- Crypto markets can often be just as volatile, if not more volatile, than traditional ones.
- Contrary to how some cryptocurrencies and exchanges market themselves, these investments don’t often allow investors to get rich quick.
- By taking time to research cryptocurrencies and exchanges before and proceeding cautiously, first-time investors can avoid a lot of issues down the line.
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