Disclaimer: I am not a financial expert and this is not financial advice. Please speak to someone who works in the finance industry before making any financial decisions.
It seems like everyone and their dog is jumping on the cryptocurrency train these days, and, although it is an investment with a high potential reward, it's also a very risky one to make.
Here's how you can conduct your research so you don't simply have to take other people's word for it when they say crypto is the best thing since sliced bread: Maybe it is, maybe it isn't, but you'll want to know the facts!
1. STUDY PUBLICATIONS ON BOTH SIDES OF THE POLITICAL SPECTRUM
If you only have a little bit of cash, you're probably better off investing in a lower-risk index fund or dividend stock, because you could actually lose a lot of money, and the markets fluctuate.
Just how much can you lose?
All of it.
There are a myriad of sources covering cryptocurrency. Here are some of the most reputable publications when it comes to this matter:
The truth is a lot of people are affiliates for cryptocurrency, so they'll likely voice their support of it, even though there seems to be some sketchy business going on behind the scenes.
If you are looking for a different perspective on the matter, you might want to check out Trust No One: The Hunt for the Crypto King on Netflix or Mother Jones: Emily Atkins has published a piece about how horrible crypto is for the environment, for instance.
If cryptocurrency is one thing, it's controversial!
2. LISTEN TO THE FINANCE ENTHUSIASTS AND SEE WHAT THEY THINK
There are some people who are vehemently against cryptocurrency, believe it or not, so you might want to listen to them. Generally speaking, you can garner a decent amount of information from YouTubers who have studied the matter in-depth.
You might want to check out the following YouTubers in the personal finance space:
They all have an interesting take on crypto, but it's important to remember that they are dedicated YouTubers who are all finance enthusiasts, but they have never worked as accountants before, so it's probably best to simply seek the advice of a professional if you find yourself with burning questions on the matter.
3. LEARN FROM THE MOST EXPERIENCED INVESTORS
The most experienced investors, Warren Buffet amongst them, have developed systems that work, so their thoughts are certainly worth considering when it comes to crypto.
At the end of the day, what works for one person may not work for another.
When it comes to investing in anything, there will be people who think it's a great idea and those who think it's a horrible one. It's important to listen intently to both perspectives before making a decision.
Additionally, you will want to consider what your dollars are supporting:
- Is crypto environmentally friendly?
- Does investing in crypto support the war or another humanitarian crisis, such as child labor?
You'll also want to be extremely intentional about investing in crypto if that is the route you decide to take. You may want to ask yourself the following questions:
- Am I willing to lose every penny I've invested?
- Do I need this money immediately for something else?
- Am I willing to take a lot of risk for a reward that is not set in stone?
- Do I have other investments to fall back on in case this one doesn't pan out?
As an investor, it's never a good idea to focus solely on one financial asset: You'll want many! Crypto can be one part of your portfolio, but it's best not to put all your eggs in one basket, especially since it's so risky!
You're ultimately responsible for whatever actions you take, and it's totally understandable to make whatever investments you think are appropriate, but it's certainly important to do your research.
Whatever you do, don't put your life savings into crypto, but, depending on your tolerance for risk and your financial goals, it might be a highly profitable investment, as long as you prioritize developing a diversified portfolio.