Cryptocurrency has become an increasingly popular investment in recent years, and these days, a growing number of brokerages are making it available. If you’ve been on the fence about buying crypto, you’re no doubt in good company. And if you’re not sure whether it’s the right investment for you, consider these arguments in favor of and against it.
Reason No. 1 to buy crypto: You want to
There’s definitely something intriguing about the idea of owning a newer type of asset — especially one that so many investors have had success with. If you have a solid portfolio already and extra cash at your disposal, there’s nothing wrong with indulging that itch and seeing where it takes you — as long as you don’t sink too much money into crypto in one fell swoop.
Reason No. 2 to buy crypto: You can afford to
If buying cryptocurrency means not having money on hand to diversify your stock holdings or load up on the real estate investment trusts (REITs) you’ve been researching and eyeing for months, you may want to hold off on investing in digital coins. But if you can afford to dabble in crypto and also keep loading up on the tried-and-true investments that have carried your portfolio for years, then there’s nothing wrong with moving forward.
Reason No. 3 to buy crypto: You want to diversify your portfolio
Holding a diverse mix of assets in your portfolio could not only help you grow wealth, but also protect you during periods of stock market volatility. If you’ve yet to put money into crypto, buying some digital coins could result in a more diverse investment mix.
Reason No. 1 not to buy crypto: You feel pressured to
Many investors have enjoyed great success with cryptocurrency. But that doesn’t mean or guarantee that you’ll have a similar experience. As such, don’t let peer pressure be a reason to load up on digital coins. If you have an investing strategy that doesn’t involve crypto, there’s nothing wrong with sticking to it if it’s been working for you.
Reason No. 2 not to buy crypto: You don’t really understand what you’re getting into
The technology behind crypto is pretty complex, and determining the value of crypto is a tough thing to do. If you feel that you’re too in the dark to safely invest in digital currencies, then you probably shouldn’t.
As a general rule, it’s not a good idea to invest in any company with a business you don’t understand. That applies here, too.
Reason No. 3 not to buy crypto: You don’t have a strong appetite for risk
Some people are more risk-averse than others. But if the idea of owning cryptocurrency is likely to cause you to lose sleep, then it’s really not worth putting yourself through that torture.
In that case, you’re better off sticking with investments that fall inside your comfort zone. If you buy crypto but are uneasy about it from the start, you might panic-sell when your investment drops in value, thereby locking in losses.
Investing in cryptocurrency isn’t for everyone, so don’t feel bad if you end up deciding against it. The key is to consider the pros and cons so you can make an informed decision.
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