The Dark Side to Cryptocurrency

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I’ve been warning against speculating in crypto currencies since 2017. Currencies have no place in a conservative investment portfolio. That is doubly true for digital currencies. They need to be approached in the same manner as any risky speculation. Never borrow to speculate in virtual or crypto currencies, and never commit more money to speculating in them than you can comfortably lose.

The recent headlines about cryptocurrency values certainly reinforce this advice. Crypto investments have seen exponentially more losses than investments in a diversified portfolio. On April 13, 2021, the price of a single bitcoin surpassed $63,000. On June 27, 2022, the price was around $21,000. That’s a loss of two-thirds of its value in 14 months. In contrast, a diversified portfolio that does not have exposure to cryptocurrency is down around five percent.