One of the biggest buzzwords of the last 12 months has, without a doubt, been cryptocurrency (and Bitcoin, Ethereum, NEO, and all of the other coins out there). I’ve gotten dozens of questions from dozens of people, and broke it down to the three main questions:
1. Do I invest into cryptocurrency?
2. Should they invest into cryptocurrency?
3. If so, how much should they invest into cryptocurrency?
These answers are pretty easy (though I am definitely nowhere near expert-level in this industry).
Do I invest into cryptocurrency?
1. Yes, I do. I believe the technology will change the world. I don’t know exactly how it’s going to look, how it’s going to shake out, or who the market leaders will be in 10 years, but the technology itself is inevitable, and I am willing to take well-researched risks to play around in the space. I’m not willing to bet the rent on it (or on anything, for that matter), but I am willing to take reasonable risk for what could be a robust upside in a technology that will certainly disrupt dozens of industries, and possibly the entire world economy.
Should they invest into cryptocurrency?
2. What YOU should do is entirely dependent on your financial plan, risk tolerance, and willingness to research. You shouldn’t invest into things you don’t understand, and you absolutely should not invest into things because “everyone else is doing it”, because they’re not. If you’re not willing to study and learn about something before you invest into it yourself, you probably need someone to manage your finances for you. As an entirely new ecosystem, cryptocurrency is extremely volatile, and will experience bull (good) and bear (bad) runs that could, hypothetically, have you down 50% or more on your investment for a time period (or, of course, up 1000%). If that scares you, don’t invest into it. If you have tons of financial flexibility and just want to throw your money at something blindly, then sure, go for it.
If so, how much should they invest into cryptocurrency?
3. As with all investing, don’t invest money you can’t afford to lose, especially into something that is still speculative. Just because cryptocurrency, and more importantly, the technology behind cryptocurrency, isn’t going anywhere, it doesn’t mean that what is leading the market today will lead the market in the future. As with anything, start small if you’re really interested, and don’t invest anything until you take the time to understand the philosophy behind it.
There you go. Happy investing!
Obligatory Disclaimer: I am not a financial adviser, and this is only my opinion.