Investing in crypto has received a lot of attention lately, especially with one Bitcoin reaching over $55,000 in the last few months. If you are a stock investor, this has probably been a topic that crossed your mind more than once. The answer to whether you should invest in crypto or stick with stocks depends on your situation and risk tolerance.
Things keep in mind before you Invest in Crypto.
What Is Your Risk Tolerance?
Your individual tolerance for volatility and risk is probably the biggest factor in deciding whether investing in crypto is right for you. This is a market that experiences sudden swings almost daily, especially for the smaller coins like Doge and altcoins. If you are a person who wants to pull out of the market the second your portfolio drops 10%, crypto is probably not a good choice for you. However, if you are an investor who regularly plays in more volatile stocks, there are some lucrative opportunities.
What Are Your Goals?
Your goals are the second most important factor in deciding whether crypto is a good investment for you. If you are looking for dividends and income, there are none to be found in crypto at present. Of course, you could get your own crypto wallet and spend it like cash, but that is not the same thing as investing in dividend stocks. If your goal is growth, there is some upside potential, but there is also a lot of downside risk.
If you are thinking about investing in crypto, and you are the type of investor who loves the thrill of volatility, it is suggested that you only start with a little bit. You should never risk your portfolio diversification or more than you feel comfortable losing in crypto. Right now, crypto has many factors that may affect its future, such as government regulation and moves by big investors. If you have a few $1,000 sitting around that you are not afraid to lose, then there is no reason why you should not try your hand at the crypto markets.