The short answer: probably not.
Crypto is perhaps the most hotly contested term in modern finance. At its most basic level, crypto is a digital form of currency (i.e. money). Then we add a bunch of nerdy jargon to it, blockchain and cryptography and other things that aren’t important to most people.
But what’s important to most people is whether or not we should buy crypto as an investment.
Crypto like Bitcoin has been on quite the rollercoaster ride… from obscurity years ago (when a dude bought 2 large pizzas for 10,000 bitcoin) to crypto frenzies in memecoins. Skyrocketing crypto values are eye-catching and, guaranteed, you know someone that went all in on it. To be fair, the underlying technologies make a strong case for crypto to be useful and practical, but that does not translate to crypto being a wise investment.
There is so much to unpack when it comes to the risks and pitfalls of crypto. Not only do values rise and plummet on a whim or a tweet, but there are a ton of unique risks to cryptocurrency as an investment. Here are a few risks:
- Rampant fraud
- Operational failure of the coin’s underlying technology
- Illiquidity (meaning you may not be able sell it when you need to)
- Very poor mainstream adoption (because who actually uses crypto to pay for something?)
- No one knows if the government should regulate it or not
- The places where you buy and sell crypto go bankrupt… FTX, Celsius, BlockFi, Voyager, 3AC are a few debacles that come to mind
Here’s what all this means: investing in crypto is a very high risk move. One that we do not recommend here at Firreo. The risks simply are not worth the payoff that you probably won’t get.
If you choose not to heed our advice… PLEASE be particularly cautious of new coins being promoted by influencers or coins promising guaranteed returns (which are absolutely fraudulent). For every one cryptocurrency that may offer a legitimate use, there are a thousand others that are simply trying to cash in on the hype. This is where the everyday investor is left holding the bag and losing piles of cash.
If you’re determined to get in on the crypto racket… find a project that personally interests you, research every aspect of it, and only use a little money to speculate on it (no more than 1-2% of the cash you have available to invest).
You know what’s a way better investment choice? Go sign up for a Firreo account and get on the fast track to financial independence quicker than you can say “ethereum”!
For lots more on how to crush the personal finance game and find early retirement, make Firreo your financial advisor. We’ll help you out of your job and on your way to financial freedom!