How to Invest in Cryptocurrency
Some brokerage platforms—like Robinhood, Webull and eToro—let you invest in crypto. That’s in addition to crypto exchanges.
Featured Partners
Join eToro and get $10 of free Crypto! (US Only)
1%/1%
20+
0.95%/1.25%
250+
2
Uphold
On Uphold's Website
Terms Apply. Cryptoassets are highly volatile. Your capital is at risk.
0.40%/0.40%
170+
It’s best to keep in mind that buying individual cryptocurrencies are similar to buying individual stocks. In essence, they are risk assets.
If you want exposure to the crypto market, you might invest in individual stocks of crypto companies. “There are also a few Bitcoin mining stocks such as Hive Blockchain (HIVE),” says Zeiler. “If you want some crypto exposure with less risk, you can invest in big companies that are adopting blockchain technology, such as IBM, Bank of America and Microsoft.”
Should You Invest in Cryptocurrency?
Experts hold mixed opinions about investing in cryptocurrency. Because crypto is a highly speculative investment, with the potential for intense price swings, some financial advisors don’t recommend people invest at all.
Pros and Cons of Cryptocurrency
Peter Palion, a certified financial planner (CFP) in East Norwich, New York, thinks it’s safer to stick to a currency backed by a government, like the U.S. dollar.
“If you have the U.S. dollar in your cash reserves, you know you can pay your mortgage, you can pay your electricity bill,” Palion says. “When you look at the last 12 months, Bitcoin looks basically like my last EKG, and the U.S. dollar index is more or less a flat line. Something that drops by 50% is not suitable for anything but speculation.”
That said, for clients who are specifically interested in cryptocurrency, Ian Harvey, a New York-based wealth advisor, helps them put some money into it. “The weight in a client’s portfolio should be large enough to feel meaningful while not derailing their long-term plan should the investment go to zero,” says Harvey.
As for how much to invest, Harvey talks to investors about what percentage of their portfolio they’re willing to lose if the investment goes south. “It could be 1% to 5%, it could be 10%,” he says. “It depends on how much they have now, and what’s really at stake for them, from a loss perspective.”
Comments
Post a Comment