All About Cryptocurrency
7/22/2021 - Rodney A. Brooks
Cryptocurrency is hot these days, and despite its volatility and the fact that many people don’t quite understand it, many investors still want to know if they should invest in it. Financial advisors are getting calls, even from retirees and pre-retirees, to ask if cryptocurrency should be a part of their portfolios.
The short answer is no, financial planners say. The risk is too high for most, but especially retirees and pre-retirees.
Exercise Caution
“There’s definitely a level of curiosity,” says Alex Reffett, principal and founder of East Paces Group in Atlanta, Georgia. “Everyone’s brought it up. But we are not advocating that anyone who is already prepared and established in their retirement invest in an asset that has that level of volatility.”
“Our goal is not to find the newest hot micro-cap stock to triple our client accounts overnight,” Reffett says. “Our strategy is building wealth consistency over a long-term basis group. Cryptocurrency just don’t fit what we’re trying to accomplish.”
But what is it?
Cryptocurrency is a digital currency, that – like paper currencies – can be used to buy goods and services. There are an estimated 10,000 different cryptocurrencies, but the most popular is Bitcoin. Others are Ethereum, Dogecoin and Binance Coin.
Regulators in the U.K., Japan and Canada have recently blocked one cryptocurrency exchange, Binance, from operating in those countries. Meanwhile, according to Forbes, the U.S. Justice Department and the IRS are investigating Binance because of concerns that the platform is being used for illegal activities or to evade taxes. Cryptocurrency is the currency of choice for computer hackers extorting companies like Colonial Pipeline.
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