• Tue. Jul 23rd, 2024

Can Your Financial Advisor Teach You Cryptocurrency?




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Cryptocurrency has brought about some major changes in how financial transactions are carried out. It allows people to send and receive digital currencies from wherever they are without any hassle.

Another way cryptocurrency has been a blessing is that anyone can make money by simply investing in it. Due to its volatile nature, you can easily make or lose money on it.

That is why it is extremely important for anyone looking to invest in crypto to understand how it works before throwing any money into it.

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Today you’ll find both young and old people investing in cryptocurrency. In fact, you get to see some students interested in cryptocurrency even before entering college. They often spend so much time on it and devote little time to studying.

In order not to miss their chance to study in college, many of them usually ask experts “helped me easily apply to college”, and professionals quickly solve any of their study problems. These online help services have experts who assist students with their essay writing, assignments, and more.

If you are still new to cryptocurrency and looking to invest in it, you need to understand the basics of crypto and how it works. But can your financial advisor teach you all that or offer some advice as regards it?

Well, the truth is that even if an advisor has extensive knowledge of cryptocurrencies, they cannot and will not give advice on whether to acquire or sell any particular digital currency. This way of thinking is shared by others besides the advisor. The reason is that an advisor’s primary role is to manage client expectations and financial resources rather than to sell transactions.

Now, let’s have a look at some of the things you should know about financial analysts as regards cryptocurrency.

Financial Analysts Are Reluctant to Recommend Crypto

According to a Boston-based advisor, customers frequently inquire about investing in cryptocurrency since they have heard about the potential profits that could be made from it.

The advisor points out that this way of thinking is flawed because investing in cryptocurrencies at the moment is similar to gambling due to how volatile they are.

Focusing on the technology that powers cryptocurrencies, the blockchain, will help you understand them better. In certain ways, the blockchain functions as a distributed ledger.

Although blockchain technology was initially designed to act as a payment processor, there are a ton of other really great potential uses for it as well. A few of the potential applications are:

● data tokenization

● digital identity

● data management

● secure audit trails.


What Your Financial Advisor Can Do

What does a financial advisor do? In simple words, a financial advisor’s role is to provide professional advice on how to manage money.

In a perfect world scenario, you would consult your financial advisor, ask about expanding your cryptocurrency holdings and go over which ones and how much to add. However, the great majority of advisors in the actual world don’t even classify crypto as an investable asset class. As a result, many financial advisors lack the intellectual capacity to discuss them.

Where can you turn to get trustworthy guidance on buying cryptocurrency? The less-than-5% rule is a straightforward principle that you can use which stipulates that you should not allocate more than 5% of your portfolio to any high-risk area.

Even still, if you’re working with the majority of financial advisors at this time, you’ll need to get a bit innovative in your search for cryptocurrency investments.

There Are Multiple to Get Into This Market

There are several ways to get into cryptocurrencies. However, not all of them entail directly purchasing digital assets. Some competent advisors prefer to use an indirect method rather than actually assisting you in purchasing cryptocurrencies:

Your financial advisor may decide to pursue one or more of the options listed below:

● Futures for Bitcoin

● Dedicated cryptocurrency hedge funds

● ETFs for crypto mining

Keep in mind that, similar to any kind of investment, you should only invest in cryptocurrencies with money you can afford to lose. Of all, just because crypto-assets carry a significant level of risk doesn’t inherently make them a bad investment or gambling. Numerous supposedly “genuine” assets also carry a great deal of risk.

How to Find a Financial Advisor Who Understands Cryptocurrency

On their websites, some advisors may list cryptocurrencies. But there’s always a potential that they did so purely for promotional reasons. Ask them some critical questions about Bitcoin or the blockchain to ascertain whether they can hold an informed conversation on the topic.

Financial advisors who wish to improve their knowledge of crypto can do so by enrolling in professional courses in digital asset management.

Author’s Bio

Carla Davis is a distinguished writer with extensive knowledge of crypto. She has written several articles on crypto and blockchain technology. In her free time, Carla enjoys reading and going on adventures.

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Kevin Moore - E-Crypto News Editor

Kevin Moore - E-Crypto News Editor

Kevin Moore is the main author and editor for E-Crypto News.