Bitcoin and cryptocurrencies are considered by many to be among the more riskier investments to have in one’s investment portfolio in comparison to more traditional assets such as stocks, bonds, real estate, and gold. Even so, it is hard to ignore the returns that investors have made from their crypto investments in the past decade.
Recently the SEC approved Bitcoin ETF’s for multiple investment companies such as BlackRock and Fidelity. This opens the door for many more investors to have easier access to adding Bitcoin into their investment portfolio. With that being said, should Christians consider investing in Bitcoin and other cryptocurrencies as part of their overall investment strategy? Let us take a look at both sides of the story.
Is Investing In Cryptocurrency Gambling?
Many would consider a Christian who is investing in cryptocurrency no different than one who is gambling. This could certainly be true if you find yourself blindly throwing your money at something you have not researched. With over 23,000 cryptocurrencies in existence, doing your due diligence will be required of you if are to be successful with crypto investing. Most of these 23,000 coins will in the end be worth nothing. Even the more legitimate of these coins have proved to be very volatile for those invested in them.
While many millionaires and even billionaires have been made in crypto, much money has also been lost by those investing in bad projects. Others may have been invested in good coins such as Bitcoin, but due to the timing of their investment may have invested when the price was high, watched the price fall, then got scared and sold at a loss. People who used the HODL strategy (Hold On For Dear Life) and didn’t sell their Bitcoin, these folks have made huge returns.
Blockchain Technology Is Hard To Ignore
For those who have researched the crypto markets, you know there is much more to this blockchain technology than just meme coins such as Dogecoin and Shiba Inu. While these meme coins get so much of the attention, there are some solid projects in the cryptocurrency space to consider investing in.
Bitcoin has been labeled the new (Digital Gold) that is becoming just as much a store of value as it is a currency. Then you have the technology behind projects such as Ethereum, Solana, Link, Avalanche, Matic, and a number of others that are beginning to change the way industries are doing things. The potential behind these technologies is simply hard to ignore for those who are willing to do their homework. The amount of adoption occurring in the cryptocurrency industry continues to grow at a rate not seen since the adoption of the internet.
Cryptocurrencies And Traditional Investments All Go Up And Down
There is wisdom in a Christian saving for retirement (Proverbs 6:6-8). Some choose mutual funds, others choose things like real estate. Yes, these types of investments do tend to be less volatile than crypto, but even they are not immune to a market crash. In the short term it is always possible for your investments in land or the stock market to lose at least half it’s value at any moment. In crypto crashes the loss in value has been sometimes 85 percent or higher. In any of these investments the key has been to remain invested through the ups and downs because they have always bounced back from the crashes and went higher.
A Few Things To Keep In Mind
Everyone has to do an honest assessment of their own risk tolerance. Are you willing to watch the value of an investment in something such as cryptocurrency go up and down in value more than traditional investments in exchange for potential higher returns? If so, here are a few things to keep in mind.
- Especially with higher risk investments, never invest more than you are willing to lose.
- Don’t put all your eggs in one basket (Ecclesiastes 11:2). Be invested in multiple things. Even within your crypto investments, if you choose to do so, don’t invest in just one cryptocurrency.
- Be willing to ride the ups and downs. Long time holders in good investments have usually done well.
- Do your homework and know what you are investing in.
- As Christians we should keep a proper perspective. Money is just a tool to become financially able to do whatever God has called us to do.
This article is not to be considered as investment advice. Anyone who chooses to invest in cryptocurrencies should do their own research and if need be seek professional advice.
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