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Crypto & NFTs / Classifying crypto and what does it do as an investment?
Nov 09, 2021
Classifying crypto and what does it do as an investment?
Hey everyone. I'm just trying to wrap my brain around crypto as I read up on it. How much are you adding it to your investments? Is there a particular way to think about how much to add to a total portfolio? Does that even make sense? Or is it more gambling money that you're OK losing? I hear about people using it as a hedge against rising inflation like gold and I don't really buy into that. I'm looking into Bitcoin and maybe Etherium but will use my "play" money. Thoughts on this?
Replies (6)
Nov 09, 2021
@Tommy510, Think of it as high risk. Only investing what you're okay losing is the right way to think about it in my mind. It's also highly volatile and you'll see huge swings in a day, so prepare yourself. I wouldn't put more than 5% of your total portfolio into it.
Nov 28, 2021
@Ira865, was wondering how much to put away into crypto, and this makes sense.
Nov 09, 2021
@Tommy510, I don't buy the inflation hedge argument either. If crypto were a currency used at mass scale, yeah, then I can say crypto is a tangible store of value. But in the absence of that, crypto has no real intrinsic value. At least that's my idea of it!
Nov 10, 2021
@Whitney974, that totally fair. I'm looking at this from the angle of a hopeful investor and not to day trade or anything like that.
Nov 10, 2021
@Tommy510, the two you mention are legitimate and the whole industry is only scratching the surface. Web 3.0 and defi are coming and everything will be on the blockchain. The more I read about this stuff the more compelling it is. But there are bad actors and dumb games being played that really mess with the average person just trying to make some gains. Squid Game and Doge come to mind first because they're better known. Imo, how much you decide to put your life savings into it should be based on your understanding of the particular coins of interest, high comfort with high risk and total loss, and your conviction in it. I wouldn't view it as an inflation hedge or an instant gratification tool - not that you are but just saying it.
Nov 21, 2021
@Patricia388, a great way to think about it!