LOUISVILLE, Ky. (WAVE) – Have you heard of Bitcoin or Ripple?
There is a lot of curiosity about the latest global cryptocurrency asset class. While cryptocurrency has become a highly prized commodity, Consumer Reports claims it is one of the riskiest investment choices.
“I think the biggest question for people is this value,” says Leanna Haakons, bestselling author and founder of Black Hawk Financial. “How is this thing worth anything?” “
Most people are familiar with assets like stocks, bonds, commodities, real estate, and hard cash. Bitcoin and the other thousands of digital assets are still new to many people. Haakons is warning not to bet the farm on the cryptocurrency just yet.
“Cryptocurrency has yet to prove its worth,” says Haakons. “We don’t know what its value is.
Many proponents of the digital asset see it as the legal tender of the future and rush to buy what they can now, possibly before it becomes more valuable.
“We, as professional investors, consider this to be speculative,” shares Haakons. “It’s like gambling. Right now you’re taking the big risk of potentially getting that big return. “
John Wise, director of digital media at WAVE 3 News and cryptocurrency enthusiast, says the rapid change and unpredictability are the most attractive elements of the new asset.
“If you’re comfortable with this volatility, that’s what’s exciting to me,” Wise proclaimed. “The worst thing about cryptocurrency is the same answer. It’s volatility.
Haakons agrees that there are definitely meteoric peaks and depressive lows in cryptocurrency trading at a much faster and more extreme pace compared to other traditional market assets.
“It should be money that you are prepared to lose 100%,” says Haakons.
Haakons also believes that if this new universal currency is accepted, it will affect the existing banking system that we know and use on a daily basis. There will be no central authority or intermediary.
“All of that is eliminated in the banking system,” says Haakons. “You can imagine that retail banks are not that passionate about cryptocurrency, because if it becomes a usable long-term store value or a medium of exchange between people from different countries, it will really affect their income. retail banking. “
If you are considering investing in cryptocurrency, expect the unexpected. Take the time to understand the digital assets you have chosen so that you know your potential investments. Plus, like any other asset, diversification is key.
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