Financial advisor Don Dirren recently discussed what everyone needs to know about cryptocurrency.
PHOENIX, AZ / JAN. 16, 2022 / Cryptocurrency can be a confusing topic, even for those who have been investing for decades. Financial advisor Don Dirren recently discussed several facts everyone should know about cryptocurrency.
“I have many clients who remain confused about cryptocurrency despite inquiring about it many times,” Dirren said. “I’d like to offer some information to help others understand cryptocurrencies and if they are a good investment option for them.”
What Is Cryptocurrency?
Cryptocurrencies are forms of payment that do not involve the use of a bank or other monetary authority. They can be exchanged for services or goods, but they are most commonly used as investment options.
Bitcoin is currently the most popular cryptocurrency available. It reached an all-time high value in 2021.
There are currently more than 16,600 cryptocurrencies traded publicly. Bitcoin has the highest market capitalization at $774.8 billion and Ethereum has the second-highest at $360.4 billion.
“Understanding what cryptocurrencies are is the first step in deciding if you want to invest in them,” Dirren said. “The next step is to speak to your financial advisor about possible investment options, including varying types of cryptocurrency.”
How to Invest in Cryptocurrency
Purchasing cryptocurrency requires you to obtain a “wallet.” This wallet is an app that can contain your currency. You can then transfer money to purchase cryptocurrencies, such as Bitcoin.
Individuals who are skeptical about purchasing cryptocurrencies directly can work with an online broker. Some online brokers work exclusively in cryptocurrencies. These offer the most wallet functionalities and a superior selection of cryptocurrencies.
A Good Investment Opportunity?
Cryptocurrency has become a more popular investment option. Some investors view it as the currency of the future. However, Bitcoin and other cryptocurrencies will need to remain stable for a significant amount of time for financial advisors to recommend them to everyone.
“Right now, cryptocurrencies are still quite volatile in terms of price,” Dirren said. “Bitcoin was at an all-time high in 2017, then its value dropped drastically to $3,200. Bitcoin saw another major surge in 2020 and 20201, but this has been followed by another drop.”
Cryptocurrency is a viable investment option for some individuals. Right now, it is an investment option offered to those who prefer high-risk investments. You can purchase Bitcoin one year, and it may be worth three times as much the next year. However, it could be worth drastically less too.
Don Dirren and Cryptocurrencies
Don Dirren has been a licensed financial advisor for more than 30 years. He is a top Safe Money Specialist for the Bergen Financial Group.
Dirren recently explained that cryptocurrencies can offer excellent short-term gains for investors who aren’t afraid of taking risks. However, individuals need to be more conservative about their investments, such as those who are preparing for retirement.
Dirren suggested consulting with your financial advisor before taking the plunge into cryptocurrency. A certified professional can help you determine which investment options, or which cryptocurrencies, are best for you.