Volatility is nothing new, and it's one of the main reasons why experts say that new cryptocurrency investors should be extremely cautious when allocating part of their portfolio to cryptocurrency. For example, even if a token offering is considered an illegal capital offering, there may still be a market for buyers and speculators. As a historical example, look back at the penny stock pump-and-dump schemes of 10 years ago. Brokers would block trading of stocks suspected of being manipulated in their user interface, but buyers would keep calling their brokers to manually override and use the bomb (either up or down).
Major cryptocurrencies continue their tough start to the year, falling along with stocks. By tracking futures prices instead of bitcoin itself, experts say, the ProShares ETF could be too risky for novice traders, many of whom invest in cryptocurrencies. This volatility is a big part of the reason why experts recommend keeping your cryptocurrency investments at less than 5% of your portfolio to begin with. Instead of learning how to navigate a cryptocurrency exchange to trade your digital assets, you can add cryptocurrencies to your portfolio directly from the same brokerage that you already have a retirement account or other traditional investment account with.
New crypto developments, such as decentralized finance and decentralized autonomous organizations, are likely to be the areas of greatest growth for cryptocurrencies, said Bryan Gross, network administrator of crypto platform ICHI. Any investor, trader or regular user of cryptocurrency should research multiple points of view and be familiar with all local regulations before committing to an investment. If you're not willing to lose the money you invest in cryptocurrencies when buying on an exchange, you shouldn't put it in a cryptocurrency fund either. In general, the more accessible cryptocurrency assets are within traditional investment products, the more Americans could buy and influence the cryptocurrency market.
While the significant public pushback against new technologies can be explained as fear and misunderstanding of something new, increasingly harsh regulations around the world are making many experts wary of investing in cryptocurrencies. Because the cryptocurrency market has a relatively low barrier to entry, even people who have never been interested in trading before can easily become crypto investors.
