Are you moving money around and wondering if you should put a portion into cryptocurrency investments? Cryptocurrency is a great option as it has a potential for high rewards, is backed by useful technology, is entering into mainstream, and provides diversity to your portfolio.
Cryptocurrency is a popular investment option because it has the potential for high returns. Any investment is risky, but cryptocurrency can be much riskier since it's open 24/7, unregulated and very volatile. On January 1, 2018, Bitcoin almost hit $13,900 and on January 1, 2021, it was almost at $29,600. It more than doubled in those two snapshots, but it had many ups and downs between then. Bitcoin is a great option if you are a risk tolerant investor looking for very high potential gains.
Today, cryptocurrency is becoming more mainstream as many companies such as PayPal and Microsoft are accepting it as payment. Meanwhile, Forbes also noted these companies for using blockchain technology to help with monitoring and distribution in their products. You can learn more about blockchain technology here.
Diversifying your portfolio across different investment types also reduces risk. Cryptocurrency is an example of an investment type alongside stocks, bonds, mutual funds, etc. Each of these can react differently to the same event, so allocating across these reduces volatility. For example, if you have $100 split between a stock and Bitcoin and an event causes Bitcoin to crash and the stock to rise (or vice versa), because of the split, the rise will help balance out the crash. You can learn more about diversification here.