Cryptocurrency when to buy and sell advisor

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A modern advisor who is well versed in crypto can help you make sense of this rather new landscape. Key Takeaways Most advisors are not well versed in crypto and are hesitant to recommend it to clients. There is no industry standard for certification like there is with the CFP designation. Despite crypto having a market cap in the trillions, many are wary of calling it an "investable asset," and consider it more gambling than an investment vehicle. Almost half of American adults do not understand digital assets beyond a beginner level.

Past performance is no guarantee of future results. This common saying should be on the mind of every crypto investor and advisor. Is This Investing or Gambling? That's the question people have been asking about futures trading since the Dojima Rice Exchange opened in Japan in There are many factors to consider and plenty of good articles to educate yourself about the technology behind cryptocurrencies.

But who can advise you on whether to buy in? Most wealth managers are steering clear for two reasons, listed below. Your Advisor Is Skeptical First, because they mostly see this rush as just another new fad in the financial space that has to play itself out before there can be any real guidance.

Second, it is a space that has no clear regulators yet but does have some who hate all cryptocurrencies when sold to retail customers. With so many cryptocurrencies and the game-like nature of obtaining them, plenty of individual investors want to jump in. But make no mistake: cryptocurrencies may be thrilling but putting your money in a new financial product without any real understanding of how it works really is gambling. The advisor is not alone in this way of thinking.

The reason is that an advisor's job is not to sell transactions, but rather to manage their clients' money and their expectations. Wanting to protect advisory clients, sometimes from themselves, the advisor screens out the noise in the market and steers them away from the many cryptocurrency scams that have cropped up. Advisors Are Hesitant to Recommend Crypto One Boston-based financial advisor notes that when clients ask how they can invest in crypto, for example, it's often because they've heard how much money they could make.

The problem with this way of thinking, the advisor explains, is that cryptocurrencies are so risky that investing in them right now is essentially gambling. A better way to think about cryptocurrencies is to focus on the technology behind them: the blockchain. The blockchain is more or less a distributed ledger. Bitcoin is the most well-known cryptocurrency because it was the first viable one and has the highest market cap.

Blockchain technology was originally developed with payment processing in mind, but in reality, there are a lot of truly solid potential uses for it. Some of the possibilities include digital identity, tokenization of data, data management, and secure audit trails. Be sure to keep track of your cryptocurrency passwords. If you lose them or don't leave them to your heirs, no one can get at those millions you've mined. What Your Financial Advisor Can Do In an ideal world, you'd turn to your financial advisor, ask about adding some cryptocurrencies to your portfolio and discuss which ones and how much.

In the real world, the vast majority of advisors don't even recognize them as an investable asset class. Therefore, many are not able to talk about them intelligently. So where can you go for real advice about investing in Bitcoin, Ethereum, or any other cryptocurrency you're considering? Even then, at this point, you'll have to get a little creative in your quest for crypto investments if you're working with most financial advisors.

Different Ways to Get in This Market There is more than one way to participate in cryptocurrencies, however, and not all of them involve actually buying the digital assets directly. Some knowledgeable advisors would rather take one of these indirect approaches instead of actually helping you own cryptocurrency.

Of course, the high level of risk associated with crypto-assets doesn't automatically mean that they're gambling and not an investment. There are plenty of so-called "real" assets that come with loads of risk, as well. Still, if cryptocurrencies do take their place among conventional investments, then advisors will have to catch up with those who waded into the fray long before them. Apps like Robinhood and Webull allow users to trade cryptocurrency at lightning speeds with no fees, and even robo-advisors , which have long touted the goal of helping young people with long-term investing, are dipping their toes into crypto.

So it makes sense that financial advisors are getting inundated with questions from clients about whether or not cryptocurrency should be a part of their investment portfolio. And some advisors are warming up to the idea of digital currency. Ads by Money. We may be compensated if you click this ad.