Have you started planning for your retirement? If not, it is better to plan as early as possible. People have different types of savings options for their retirement. Some prefer to keep their investments in banks, while others who like taking risks would park their money in stocks and mutual funds. The trouble is lesser when you invest in government bonds, but the returns won’t be too exciting. Choosing less volatile investment options is better when you like to play safe with your retirement money. At least you can make sure that your investment is safe.
Some people like to invest in cryptocurrencies like Bitcoin for their retirement money. Though it is a hazardous approach, you can follow reliable websites and financial publications if you want to know how to buy cryptocurrencies and articles and expert analysis on Bitcoin. You can read the latest crypto news at Fazzaco, a reputed website that provides accurate info on all developments related to all cryptocurrencies, their price movements, etc.
This article looks at the various benefits and risks of buying Bitcoin for your retirement plan.
High Volatility
You have to understand that all investments related to cryptocurrencies are highly volatile. One day, you can witness the price of Bitcoin going up more than five percent, but it can crash another five percent the next day. If you don’t dare to see such a volatile performance for your retirement money at an old age, it would be better to park your money in some other safe investments. An investor should also realize that the volatility in Bitcoins is more than in a mutual fund of equities.
Performance in 2022
Let’s take the price movement of Bitcoin in 2022 as an example. Bitcoin has been showing signs of a comeback towards the end of the first quarter. However, its performance for most of this year was dismal due to several factors, including the global uncertainty related to the Russia-Ukraine conflict. The price of Bitcoin reached a high of $47,765 on March 28. However, you must understand that it was trading in the range of $34,000-$44,000 for most of this year. It indicates that the price of Bitcoin has the scope of hitting a low of $34,000. At the same time, it can reach a high of $48,000 in a few weeks. The same would be the case with your retirement money. It can also go up or down, depending on many factors. If it goes up, you can benefit, while at the same time, it is a riskier approach. You also have to note that the price of Bitcoin was $69,000 on November 10, 2021. If you had bought Bitcoin at that price, you can understand what would be the value of your investment now. However, those who have bought Bitcoin at a low price can look for good returns from the currency.
Disadvantages
Many experts consider investing in cryptocurrencies as a form of gambling because you never know how the price will go. Bitcoin is a digital and decentralized currency, and there is no control from the government or central bank over it. Though you can buy cryptocurrencies legally in several countries, some nations restrict the buying of such currencies. The government policies can also change in the future, putting the fate of your investment in potential trouble. It is not ideal to have a lot of ambiguity and confusion related to your retirement money. All of us love to have a peaceful retirement life.
Advantages
If you have bought Bitcoin at a lower price, you can look for good returns, considering the level of appreciation for its price last year. You can use cryptocurrencies for buying goods and services as well. Those who support the view of taking a risk with your retirement money suggest that with an investment in cryptocurrencies, you can take retirement early. They predict that Bitcoin can be a reliable asset class in the future, especially if it gets some support from governments. Considering the inflation in the future, you might need good money for your retirement, and you can achieve it by opting for taking risks, such experts suggest. They pointed out that Bitcoin has performed better than all other asset classes in the last five years. Even if you like to experiment with buying Bitcoin as part of your retirement plans, it could be good if you
allocate only an amount of your investment for it. If your risk-taking move works, you can retire early and enjoy your life with your family. If the move backfires, you still have money in other assets as you have only invested a portion of your money in Bitcoin. If you follow a reasonable approach to investing, you can realize that no investment is a bad option. You can consider cryptocurrency as an investment option if you approach it responsibly.
