In recent years, cryptocurrencies have become the talk of the town. Despite their volatility, these financial tools have gained tremendous popularity as the most significant invention in the field of finance and wealth management. Given the amount of attention, cryptocurrency is receiving as well as the amount of money being invested in it, younger generations planning retirement today may be enticed to include crypto assets in their portfolio.
However, Bill Schantz emphasizes that there are a number of unanswered questions. Is it possible to invest in cryptocurrencies in the long run? Should a person consider this asset class as a means of ensuring a secure retirement? Most importantly, should a person consider investing in cryptocurrency for the long term?
Bill Schantz Explains the Basics of Digital Assets
Cryptocurrencies, often known as digital currencies or assets, are built on the Blockchain, a decentralized ledger system. While financial experts disagree on the future of cryptocurrency, they all agree that the underlying technology, known as Blockchain, is here to stay. However, as Bill Schantz points out, many mainstream investing organizations and financial institutions are becoming friendlier to cryptocurrency.
Morgan Stanley has announced the establishment of three funds that would allow investors to include Bitcoin in their portfolios. Fidelity also announced the launch of a Bitcoin exchange-traded fund at the same time. Other businesses have followed suit, allowing the stock market to gain confidence. This, however, has had little impact on the current level of extreme volatility.
Keep Crypto Investments Limited, Bill Schantz Stresses
Cryptocurrencies, despite their popularity and interest, should not be compared to other asset classes, particularly when it comes to retirement planning. Despite the fact that they are genuine investments, long-term investors should be cautious. Digital assets are one-of-a-kind investments that can plummet to zero or expand by more than 100% without any discernible signs. According to Bill Schantz, it’s a game of high risk and high profit.
Given this phenomena, it is not prudent for a parent to put their child’s education money or future healthcare expenses at risk by investing in cryptocurrencies. There is no harm in investing 1% to 5% of one’s overall assets in these digital currencies. This proportion can be raised to 10% for individuals who understand the market and know how to step carefully, but that is the upper limit, especially if sustainable investments are the goal.
Bitcoin and Ethereum are two of the most popular coins in which investors can put their money. However, until a significant amount of Bitcoin is purchased, the profits are not impressive, given the market capitalization of these two coins.
Cryptocurrencies are a lucrative market, as Bill Schantz explains, where new investors can make quick money. They are, however, not an asset type that should be considered when constructing a long-term portfolio. Most importantly, when it comes to retirement plans, it is recommended to stay away from this market or simply invest a modest amount that will not harm if lost entirely.