It could be a move you sorely regret.
Although it's been a rocky year for cryptocurrency, many investors are still eager to put money into digital coins or hold onto the digital currency they bought last year. If you're interested in buying cryptocurrency, it's okay to do so as long as you understand the risks involved and tread lightly. That means not putting 80% of your money into crypto, but rather, starting small and seeing how that goes.
But if you ask Suze Orman, she'll tell you that investing in cryptocurrency for retirement is a really bad move. And it's advice worth heeding.
An asset that's just too speculative
You'll often hear that it's smart to consistently fund an IRA for retirement so you have money to tap later in life. And you don't want to just leave your retirement savings in cash. Rather, you should be investing that money so it can grow into a larger sum over time.
It's also important to maintain a diverse mix of investments for retirement. That could help you enjoy gains and minimize losses during periods of volatility.
But if there's one asset Suze Orman would caution retirement savers to stay away from, it's cryptocurrency. The reason? It's highly speculative.
Crypto has proven itself to be very volatile, but then again, so have stocks. But whereas stocks have been around for a long time, cryptocurrency has only been around for a little more than a decade. And it's questionable as to whether it will still be an asset of value in a decade from now.
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It's easier to determine the value of a given stock based on information on the company behind it -- namely, by looking at that company's assets, cash flow, products, and so forth. It's harder to figure out what cryptocurrency is worth, and what it will be worth in the future.
One of the biggest question marks surrounding cryptocurrency is whether it will become a widely accepted form of payment. Some merchants already accept crypto payments today. But for the most part, you can't just pay in crypto the same way you can hand over a wad of cash or swipe a debit or credit card.
That makes cryptocurrency pretty risky -- more risky than stocks. If cryptocurrency doesn't become a mainstream payment option at some point in the future, its value could plummet.
We also don't know to what extent cryptocurrency will be regulated over time. That, too, adds to the risk of owning it.
Look to cryptocurrency as a shorter-term asset
As a general rule, it's a good idea to load up your portfolio with quality investments you hold for a long time. But crypto may be the exception to the rule. It may be a better bet to think of cryptocurrency as a shorter-term asset, and stick to investments that are more tried and true for your retirement nest egg.
You're going to need a sizable amount of savings to cover your living costs once your career ends. And you don't want to put your future financial security at risk by banking too heavily on crypto.
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FAQs
Ramsey is clear about avoiding crypto and not getting tempted by the buzz. “Crypto is not a safe investment. You could lose your shirt (and pants) messing around with crypto. Steer clear …
What does Suze Orman think about crypto? ›
But if there's one asset Suze Orman would caution retirement savers to stay away from, it's cryptocurrency. The reason? It's highly speculative. Crypto has proven itself to be very volatile, but then again, so have stocks.
Is crypto a good investment for retirement? ›
Cryptocurrencies offer potentially high returns but come with significant volatility, so invest cautiously and only allocate a small portion of your retirement portfolio. Research cryptocurrency technology and specific assets before investing, using reliable sources and secure investment vehicles like crypto funds.
Should I keep my savings in crypto? ›
Most financial experts recommend limiting crypto exposure to less than 5% of your total portfolio. Crypto is considered a high-risk asset class. Limiting allocation helps manage overall volatility and risk. Those new to crypto investing may start with 1% to 2% as an introduction.
Why shouldn t you just put all your money into crypto? ›
If you invest all your money in crypto, your portfolio will be extremely volatile, which could be stressful. You'll need to figure out a safe storage option so you don't lose access to your crypto. Even if your investments turn a profit, you'll then need to decide whether to sell or to keep going.
Is crypto still a good investment in 2024? ›
Key points. Bitcoin has plenty of bullish momentum in 2024. The SEC approved the first spot bitcoin ETFs in January 2024. The original crypto is on track for its next halving in April 2024.
Does Warren Buffett believe in crypto? ›
Perhaps the most famous value investor of all time, Warren Buffett is strongly against Bitcoin and other cryptocurrencies, saying, "You can't value Bitcoin because it's not a value-producing asset." Buffett and his holding company Berkshire Hathaway Inc. have been well-known for their investments in stable and ...
What is Warren Buffett say about cryptocurrency? ›
Warren Buffett Says He Wouldn't Pay $25 For All The Bitcoin In The World – He Considers Crypto 'Rat Poison' And Warns: 'I Can Say With Almost Certainty That They Will Come To A Bad Ending'
Does Warren Buffett understand cryptocurrency? ›
Warren Buffett has expressed skepticism about Bitcoin, considering it a “delusion,” while recognizing the importance of blockchain technology. He views Bitcoin as lacking unique value, as it doesn't produce anything and sees the cryptocurrency as overhyped.
Is crypto better than 401k? ›
Key Takeaways
Proponents of cryptocurrencies claim that they offer much higher returns than the assets typically held in 401(k) accounts, though this cannot be documented over time. On the downside, cryptocurrencies are seen as unstable due to the wild swings in price and lack of oversight.
Self-directed IRAs let you invest in alternative assets like cryptocurrency, real estate, precious metals and collectables, all of which are excluded from conventional IRAs.
How long should you keep your money in crypto? ›
Crypto hodling is a long-term strategy that could provide a safer investment option, especially for inexperienced asset owners. “Sit back, relax and go back to your investment in five years' time” is often a mantra in financial markets, and the crypto industry is no exception as this is also the hodlers' motto.
How do you avoid losing money in crypto? ›
Tips for avoiding losing money on cryptocurrency investments.
- Educate yourself: Learn about cryptocurrencies and the market.
- Research: Check out the project, team, and tech behind a coin.
- Diversify: Spread investments across different cryptos.
- Use reputable exchanges: Stick to well-known platforms.
Reviewing the Best Crypto Savings Accounts
- NEXO – Lockup Periods Under 24 Hours. ...
- Crypto.com – Top Rates for CRO Investors. ...
- LEDN – High Quality Crypto Interest Account. ...
- YouHodler – 30+ Cryptos for Saving and Borrowing. ...
- Uphold – Earning Yield Through Staking. ...
- Finblox – Top Platform for Stablecoin Yield.
According to a survey from lendingtree.com, conducted in November 2022, a higher percentage of 38% of cryptocurrency investors have reported to lost money rather than profited, 28% say they made a profit, and only 13% broke even.
Is cryptocurrency a good investment right now? ›
Investors must keep in mind that previous returns do not guarantee future returns, but in 2021, the value of Bitcoin soared well over 60%, demonstrating the possibility of serious returns. Meanwhile, in 2022 it plummeted by more than 70%. Since then, the value of Bitcoin has increased almost 49.2% to 2024.
Is now a good time to invest in crypto? ›
Bitcoin is more stable than it's been in years, and the next halving is fast approaching. Taking current market conditions into account, now might well be the perfect time to invest, so long as you remain cognizant of the risks.
Is crypto a good way to build wealth? ›
There's no denying that some cryptocurrency traders have become millionaires thanks to their successful investments. But most consumers view cryptocurrency as a speculative investment vehicle used to gain wealth very quickly, Crypto isn't a get-rich-quick scheme, It's a wealth-building tool.
How much will 1 Ethereum be worth in 2030? ›
By the end of 2030, the predicted Ethereum price could soar to a peak of $26,575.21. The current price of 1 Ethereum is $ 2,881.90761347.
