Image source: Getty Images Here are some steps to take before you buy any crypto. Key points
It’s a good idea to cover other financial bases before you buy your first crypto.
Cryptocurrency investing can offer high rewards, but it can also be risky. Make sure you’re comfortable with the risk before you jump in.
Over 15% of Americans have bought, traded, or used cryptocurrency in some way or another, according to Pew Research. And many more people plan to buy crypto in 2022. If you’re one of them, you may not be sure where to start. After all, cryptocurrency investing can feel overwhelming at first, and there’s a lot of information to take in.
Here are six moves to make before you buy your first crypto. 1. Top up your emergency fund
Cryptocurrencies are high-risk investments. Not only can they be extremely volatile, but it’s also a relatively new and untested market, so there are a lot of unknowns. For example, we don’t know how heavily governments around the world might regulate the crypto industry — or what impact increased regulation might have. Cryptocurrency prices have dropped by 50% or more at several points in its short history. While prices do usually trend upward again, you don’t want to be in the position where you have to sell your investments at a loss if you’re suddenly faced with an unexpected bill.
One good way to cushion yourself is to build up a solid emergency fund before you buy any cryptocurrency. It’s wise to have three to six month’s worth of living expenses tucked away in an easily accessible savings account . That way, if you have to deal with a financial crisis — such as a job loss or sudden home repair — you won’t have to dip into your […]
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