Crypto is all the rage these days, and with good reason. Over the past few years, its popularity - and its value - have shot through the roof. As a result, there is quite a bit of interest in what it is and how it can help you make serious financial gains.
However, that is not to say that Crypto is risk-free, or that you can invest in it without serious heartburn. Thankfully, there are ways to build a strong crypto portfolio without breaking the bank or risking your retirement account.
According to the financial experts at SoFi, crypto is, "a digital currency that’s used exclusively online. It’s created and secured through cryptography and can be used in direct financial transactions between individuals without going through a bank or other third parties." There are plenty of types of cryptos - more than 4600 - with Bitcoin, Litecoin, Dogecoin, and Etherum being among the most well known. The value of crypto is highly volatile and constantly in flux - much more so than most stocks. As a result, finding a coin that fits your investment needs can be challenging.
For one thing, the price of many cryptos continues to increase. Take Bitcoin, which, as of this writing, is sitting at more than $51,000 - an all-time high for the popular currency. This has resulted in extensive information about the coin, creating more news coverage, which has thus helped to push the price higher. At the same time, many celebrities have gotten in on the act. Elon Musk has favorable tweeted about the topic. His company, Tesla, recently announced that they would begin accepting Bitcoin as payment. This pushed the price of the currency even higher.
First, you have to determine how crypto fits in with your overall financial goals. As a rule of thumb, don't invest money you can't afford to lose. Crypto can unquestionably turn a huge profit, but it is important to understand that the volatile nature of the medium means that you have to have a higher tolerance for risk than you would for other popular investments. Once you have determined that crypto fits in with your overall financial goals, you can use any number of apps or websites - such as SoFi's - to determine what crypto to invest in. There are many different coins, each with its own value, exchange rates, popularity, volatility, and more. Different coins will unquestionably hold different values, and there may be a coin that meets your financial goals, including your tolerance for risk.
Furthermore, good apps will have advanced features that will trigger sales or buys. For example, stop-loss orders will automatically sell your crypto if it falls below a certain price, thus limiting your loss. You may want to consider setting a stop-loss order in order to keep your losses to a minimum.
Remember, when it comes to your finances and crypto, you have to do your research and ensure that any investment you make will protect your overall financial health.
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