Iowa Fiduciary

The Big Question: Should You Invest in Cryptocurrency?

Is crypto a safe investment for retirement savings? It depends on your retirement goals. Let’s take a deeper look.

Cryptocurrency is known for many things, but it’s specifically famous for its volatility – and this year has been particularly rough. Countless investors have voiced their concerns for crypto and whether or not you should invest in this new-world asset. In most cases, investing can be a smart move, but in others where the market is on a downturn, it can be a different story.  When it comes to retirement planning, should you invest your retirement savings into Cryptocurrencies?

What is Cryptocurrency?

Cryptocurrency is a digital currency that is secured by a blockchain that makes it nearly impossible to counterfeit or double-spend. Cryptocurrency is not issued by a central authority making them theoretically immune to any government interference. Many people enjoy using cryptocurrency for various reasons, one being the accessibility it has.

Since Bitcoin’s public release in 2009, many companies have jumped at the opportunity to create their own digital currency. Some of the most popular cryptocurrencies are Bitcoin, Ethereum, Solana, Tether and Binance Coin. Now that you know a little bit about crypto, how do you know if investing in it is for you? 

Should I Invest in Crypto?

As mentioned, Cryptocurrencies can be extremely volatile, and their prices are affected by a wide range of factors. Typically, as investors approach retirement, they move away from riskier assets and towards safer ones, including fixed income investments such as bonds and guaranteed investment certificates (GICs).

Is crypto right for your risk tolerance? The answer comes down to your time horizon. Are you willing to hold cryptos for a long time period instead of panic selling when the price drops?

In some cases, investing in cryptos can be a smart move, this is especially true if you’re younger and a while away from retiring. Someone close to or in retirement, on the other hand, should be much more conservative with their investment approach.

Continuing to Invest

There is some good news for you, should you choose to continue investing in cryptocurrency. If you have solid savings and can continue to invest, you could be in a good position to buy. Cryptocurrency is a very costly investment, and buying with the market’s current state will give you the chance to invest at a fraction of the cost.

If you decide to invest, and you’re locked in for the long-haul of it all, there is potential for you to make a lot of money – however there are no guarantees. But by holding your investments for the long-haul, you can sometimes help keep your investment safe. 

The Final Word on Cryptos

Due to their extreme volatility, it’s possible to earn a good amount of money in the short term by making well-timed investments in cryptocurrencies. In the medium and long term, however, it’s anyone’s guess. Cryptocurrencies are still relatively new, and it’s still unclear how they’ll function in the long term as regulators around the world determine how to handle them and the markets continue to fluctuate.

Lastly, it is important to consider how much risk you’re willing to take. Think of crypto as this new shiny object that can make you a lot of money if it succeeds. But if it fails, you could lose your entire investment. There is no right or wrong answer for investing in crypto, but it is especially dependent on what your financial situation is. It’s always best to weigh out your options with your trusted fiduciary advisor before investing in cryptocurrencies.

How Johnson Wealth and Income Management Can Help

Cryptocurrency is a lucrative investment, but it doesn’t have to be a difficult investment. The trusted fiduciaries at Johnson Wealth and Income Management can help you oversee your investment choices and advise you on assets that are best suited to your unique retirement needs.

We are a full-service financial firm that provides a wide range of services to our clients in the state of Iowa. From portfolio management to retirement services, we are your one stop shop for all things finance. If you’re ready to start your journey to investing in cryptocurrency, contact us here today.


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