Many — maybe all — investors are constantly on the lookout for opportunities that offer high returns on investment. Often, the options on the table are equity funds, venture capital, commercial real estate, and, you guessed right, cryptocurrency.
Most crypto traders approach the issue of the financial future with true caution. After all, cryptocurrencies have sustained their upward trend irrespective of periodic dips — plus for the time they have been around, digital currencies have virtually outdone all other classes of assets in terms of ROI.
Apart from securing your financial future by holding a cryptocurrency portfolio, do you ever think about saving for your retirement? If anything, the fact that cryptocurrencies have recorded massive growth in the past is not an assurance of future gains. You need a diversified retirement plan. Even if you are an avid crypto investor, it is necessary to plan for a comfortable and, possibly, early retirement. But don’t beat yourself up if you have not started saving for retirement.
“The best time to plant a tree was twenty years ago. The second-best time is today.”
Whether you are fresh from college or have been an entrepreneur for long and aim to be financially independent when you retire early, or at 65 as many do, retirement saving requires a broad approach.
You may want to add some diversity to your retirement, and cryptocurrency investment may be the game-changer,
Crypto defined briefly
Cryptocurrency is a new asset class famous for offering quick ROI. The Cryptocurrency price swing appeals to millennials, and now more than ever, more people are showing interest in knowing how to invest in crypto.
Cryptocurrency is a digital currency backed by blockchain technology, making it safe from counterfeiting or double-spending. This means that there is no reason to worry as your money is secure and your transactions confidential.
What’s more, cryptocurrency value is determined by complex forces of demand and supply because it is not subject to any central authority. As such, the prices do not change in response to inflation, unemployment rates, or changes in interest rates. In a nutshell, cryptocurrency has the potential to make wealth accessible to the people without governments’ interference; a typical “for the people by the people” type of currency.
Of course, in reality, trading and investing in digital currency, whether to earn some revenue in the short term or to secure your retirement, is more complex and may require the help of professionals.
Is crypto the right addition for your retirement portfolio?
Modern economists posit that adding crypto to your retirement portfolio is wise. Given the past performance of crypto and the promise of an upward trend in the future, putting a sizeable allocation is plausible and follows Markowitz’s modern portfolio theory.
Like other alternative assets, cryptocurrency will bring immense benefits that you can tap into and make a difference for you in your retirement.
● Reliable and safe. Once a transaction has been completed using cryptocurrency, it cannot be reversed. Such a payment can neither be used for fraud nor facilitate identity theft — a big plus.
● Cryptocurrencies are stable in the long term. Having cryptocurrency in your retirement portfolio will help you avoid issues related to short-term volatility. Notice, the ROI of crypto is not affected by factors such as unemployment and interest rates, which means that if you invest in crypto, you have less exposure to unsystematic risks.
● Upward potential. Although the past upward trend cannot be conclusively used to predict the future direction of cryptocurrency, digital currencies have undoubtedly made overnight millionaires in the last few years. A careful and rational investor can reap alpha returns by adding cryptocurrency to their portfolio.
The Bottom line
Cryptocurrency is a new asset class that has elicited the attention — and rightfully so — of many investors across the world. Digital currency can be a great investment option if it aligns with your long and short-term financial goals and risk profile.
And, because of the past upward trend and the promising growth potential, it is worth considering adding crypto to your retirement portfolio. If anything, a diversified retirement portfolio is a sure way to financial independence- retire- early goal.
If you want to get the most from adding cryptocurrency to your retirement plan, then start early. If you have not started, what are you waiting for? You will end up with more money for your retirement and reap the benefit of compounding gains.
The Smartvestments series is designed to help you make the best decisions to your financial advantage. If you’re ready to delve into the world of crypto investments, Your Friendly Crypto Exchange, IXFI, is here to be your guide on this life-defining journey.
Disclaimer: The content of this article is not investment advice and does not constitute an offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives and specific financial and fiscal circumstances.
Although the material contained in this article was prepared based on information from public and private sources that IXFI believes to be reliable, no representation, warranty or undertaking, stated or implied, is given as to the accuracy of the information contained herein, and IXFI expressly disclaims any liability for the accuracy and completeness of the information contained in this article.
Investment involves risk; any ideas or strategies discussed herein should therefore not be undertaken by any individual without prior consultation with a financial professional for the purpose of assessing whether the ideas or strategies that are discussed are suitable to you based on your own personal financial and fiscal objectives, needs and risk tolerance. IXFI expressly disclaims any liability or loss incurred by any person who acts on the information, ideas or strategies discussed herein.
