Build Your Wealth: Use Cryptocurrency For Personal Growth

1
29

Despite its volatility, cryptocurrency could help you build wealth. This strategy may work if you plan to invest in digital coins over the long term rather than the short term. This portfolio plan has built traction over the past few months. About 13% of Americans responded that they had already invested in cryptocurrencies over the past 12 months. About 24% of Americans traded stocks over the same period of time.

Volatility in the Value of Bitcoin

Bitcoin is the best digital coin for demonstrating a whipsaw type of effect in value. Last week, it fell to $32,000, but it rebounded to $40,000 this week. This week’s price is at its highest level since June 2021. The day after it reached that high price, the digital coin’s value corrected back to $37,000. In April 2021, Bitcoin rose to $63,000.

Who Invests in Bitcoin

Cryptocurrencies have a place in investments, and that place is more prominent for younger investors. According to one CEO of an investment company, cryptocurrencies could be part of a plan that includes retirement funds in traditional markets, emergency cash savings, and a high-growth, high-risk opportunity. Everyone needs a plan for their investments, stated the CEO.

Creating an Investment Plan for Building Wealth

Cryptocurrency’s volatility makes it more challenging for traditional investors. It may be a better option for those who are tech-savvy and enjoy learning about assets. It’s also a better choice for people who have a lot of time before they expect to retire. The same rules apply to cryptocurrencies as other investments. The most important one is to avoid making emotional decisions and not sell when the value is dropping. For most cryptocurrency investors, this will take a lot of discipline. Investors should avoid checking the price on an hourly or even daily basis. A once-per-week look may be best. Paying too close attention to cryptocurrency prices will cause extra stress, which doesn’t make sense for a long-term investment strategy.

How to Allocate Funds for Cryptocurrency and Wealth Growth

Most financial planners recommend only investing an amount you can stand to lose in cryptocurrency. In other words, don’t put all of your eggs into one basket. About 5% of your investments in a high-risk, high-reward allocation is a good rule of thumb. A younger investor might consider a slightly higher range of up to 15%, while an older investor may want to lower that to no more than 2%.

Wait and See

Younger investors have the time to take a wait-and-see approach. If you believe in the technology behind cryptocurrencies and believe that these currencies will be widely adopted and used in the future, you have time to wait for your investments to grow. On the other hand, if you’re retiring next year and will need this money to keep the lights on, it’s not a good idea to put your money in cryptocurrencies.

How to Fund Cryptocurrency Investments

Financial planners recommend using the same type of strategy for cryptocurrencies as you would use for stocks. Dollar-cost averaging is a solid method. This is when you put small amounts of money into the asset on a consistent basis. Dollar-cost averaging reduces risk and combats price volatility.

SOURCEOKX

ATTENTION READERS
Due to the nature of independent content, VT cannot guarantee content validity.
We ask you to Read Our Content Policy so a clear comprehension of VT's independent non-censored media is understood and given its proper place in the world of news, opinion and media.

All content is owned by author exclusively. Expressed opinions are NOT necessarily the views of VT, other authors, affiliates, advertisers, sponsors, partners or technicians. Some content may be satirical in nature. All images within are full responsibility of author and NOT VT.

About VT - Read Full Policy Notice - Comment Policy

1 COMMENT