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Bitcoin, the most famous digital currency, has been on a losing streak over the past few months after reaching an all-time high of more than $63,000 in the middle of April.
While volatility has always been part of the Bitcoin experience—the price did fall more than 80% in the year or so after late 2017—there’s more at stake this time.
But the Bitcoin-curious, who are just one more conversation with their crypto-enthusiast friend away from diving in, should ask themselves if they’re really prepared for the full monty.
Tesla announced it would accept Bitcoin, financial institutions like BNY Mellon and Fidelity made big deals out of giving their clients easier access to crypto funds, and behemoth payment processor Mastercard said it would facilitate transactions.
The Federal Reserve didn’t help matters when it recently signaled in its latest Federal Open Markets Committee meeting that it was interested in raising interest rates a bit sooner than expected to stave off higher-than-desired inflation.
Over the years, Bitcoin has become more mainstream and easier to buy through relatively secure exchanges like Coinbase.
The reason is clear: The high growth has been impressive.
By investing in Bitcoin now, you’re expecting that the speculative craze hasn’t diminished and you’ll be able to once again sell it later on for much more than you paid.
Taylor is an award-winning journalist who has covered a range of personal finance topics in the New York Times, Newsweek, Fortune, Money magazine, Bloomberg, and NPR.