Cryptocurrency is a new, Thomas Drury asset class that can add high-risk exposure to your investment portfolio. Whether it fits your investing strategy depends on your tolerance for risk, both financial and psychological, as well as your investment goals, and how diversified your portfolio is.
There are hundreds of different cryptocurrencies, with some boasting market valuations in the billions. However, it can be difficult to discern which ones are truly worth a long-term investment. That’s why you should focus your research on coins that have proven track records of success and have the support of a large community of developers.
Maximizing Your Portfolio: A Guide to the Best ETF Trading Platforms Available in the UK
Bitcoin (BTC) is the oldest cryptocurrency and still ranks as one of the most popular by market capitalization. Many major businesses like Visa and Stripe accept bitcoin as payment. While it may not have the same “invest in me” appeal of more popular cryptocurrencies, it’s a solid place to start for beginners.
If you’re looking for a way to diversify your crypto portfolio without taking on the added risk of holding actual cryptocurrency, there are exchange-traded funds (ETFs) that offer “ways to play” the space. These ETFs invest in companies that interact with or support the crypto market.
Remember that, regardless of the type of cryptocurrency you choose to invest in, all investments carry some level of risk. Only invest money that you can afford to lose, and always diversify your portfolio to minimize risks. And don’t forget to keep up with your regular financial obligations, like contributing to your workplace and individual retirement accounts and keeping up with your emergency fund.