Cryptocurrencies

1 in 10 people invest in cryptocurrencies, many to make trading easier

1 in 10 people invest in cryptocurrencies, many to make trading easier

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More and more people are getting into cryptocurrency, many because of how easy it has become to trade digital assets, a CNBC/Momentive Invest in You Survey found.

More than 10% of respondents said they invest in cryptocurrency, ranking digital coins fourth after real estate, stocks, mutual funds and bonds.

According to the survey, some 65% of these cryptocurrency investors have jumped into the asset class over the past year. At the same time, the prices of some of the major cryptocurrencies have shown mark volatility. Bitcoin, for example, hit an all-time high of over $63,000 in April, crashed afterward, and then recently rallied to nearly $50,000.

Among those who trade cryptocurrencies, the top reasons cited are that it’s easy to trade, exciting to invest in, and there’s high growth potential in a short period of time, according to the report. ‘investigation.

“There are a lot of things that make crypto very attractive; the biggest one is the opportunity to make a lot of money,” said Douglas Boneparth, certified financial planner and president of Bone Fide Wealth in New York.

Education is the key

Of course, there is always risk associated with investing in cryptocurrency, as there is with any other asset.

Space can be exciting and cool, Boneparth said, “but that doesn’t change the fact that you keep risking your money.”

For people looking to get started, experts recommend doing their research on cryptocurrency first to make sure they really understand what they are buying.

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Indeed, while crypto is gaining traction as an asset that can be part of a well-balanced portfolio, it’s unlike any other, according to Ben Weiss, co-founder and CEO of CoinFlip, one of the largest cryptocurrency companies. bitcoin ATMs around the world. we

“Unlike banks and stock exchanges, there’s virtually no built-in security to protect you if you make a mistake,” he said. “Cryptocurrencies allow you to be your own bank, which includes the responsibility of securing your investments.”

This means that in addition to understanding the coin you want to buy, you need to decide what type of crypto wallet you are going to use and how you are going to protect your passwords and other sensitive information.

Invest with caution, like any other asset

Once you’ve mastered the basics of cryptocurrency, there’s another step: making sure you know how to trade it in line with your long-term goals.

“At the end of the day, if you’re going to invest, treat it the same way you would the rest of your money,” Boneparth said. That includes having a clear idea of ​​where it fits into your overall financial plan, which you should formulate if you don’t already have one, Boneparth said.

Many new cryptocurrency investors have started trading their digital coins frequently, according to the CNBC survey. Around a third of investors said they trade crypto on a monthly or weekly basis, and almost a quarter said they trade the asset daily.