Bitcoin – Yes as much as you are willing to go to $0. Expect it to fall at least 50%-80% after you buy it.
All other Cryptocurrencies and NFT’s – Proceed with EXTREME caution (likely scams). Honestly, probably just don’t buy it.
For an in depth article about Bitcoin vs. All other Crypto I recommend reading the Fidelity Bitcoin First paper.
Since I’ve started to post about Bitcoin a little, I wanted to make my stance very clear. Bitcoin, while it has potential to cause disruption to payments and fiat currencies, it is still a speculative asset. I personally have a higher than average income and net worth and as such I am willing to risk a small amount of money on speculative assets that I think have a high return potential. Even as such, I am only betting a very small amount of my assets on Bitcoin specifically. For most finances, savings, investing, I still recommend an asset allocation across index funds as advocated by these people.
If you need more recommendations about what books to read about financial independence and investing for low fees please ask.
Back to Bitcoin and Cryptocurrencies.
As I said, bitcoin is quite speculative, but most other cryptocurrencies are even more so. Most crypto currencies are thinly disguised, unregulated securities. In this case a security is something like a stock, where it’s like owning a part of a company. Read more here.
Most cryptocurrencies are controlled by a small number of initial developers. Those developers also award themselves some of their cryptocurrency before they allow others to buy them, giving themselves an advantage to “get the crypto while it’s cheap/free”.
Bitcoin is different. Bitcoin is decentralized. No one got a bunch of bitcoin at the start. It is being mined everyday. No one controls Bitcoin. No one person can change Bitcoin. That is what makes Bitcoin very different from 99% of the other cryptocurrencies out there.
Another technology that is getting a lot of press is NFT’s. NFT = Non-Fungible Tokens.
“NFTs are individual tokens with valuable information stored in them. Because they hold a value primarily set by the market and demand, they can be bought and sold just like other physical types of art. NFTs’ unique data makes it easy to verify and validate their ownership and the transfer of tokens between owners.” – SimpliLearn
Most NFT’s are either a picture of a GIF. Usually you are literally able to take a screenshot to make a copy or just right click to save. While there may be some minor value in these in general I would just advise beginners to stay far far away from NFT’s.
In conclusion, do a bunch of research yourself before getting into cryptocurrencies.
Only buy as much as you are willing to lose/have to go to $0.
This is the same advice as any investment.
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