The cryptocurrency recently reached a new high of more than $68,000 per token, up more than 53% since the beginning of October.
To be clear, nobody knows for certain whether Bitcoin’s price will continue climbing.
While it’s gaining more acceptance among merchants and the general public as a form of payment, it still has a long way to go before it’s considered mainstream.
Over the past year alone, it’s experienced a roller coaster of ups and downs.
But investing in cryptocurrency is not the same as investing in stocks, and there’s a different set of risks involved.
As a general rule of thumb, it’s best to avoid investing any money you may need in the next several years.
Because Bitcoin is higher risk than many other types of investments, it’s wise to only invest money you can afford to lose.
Before you invest, make sure all your bills are paid and you have a solid emergency fund with at least three to six months’ worth of savings.
Finally, if you choose to invest in Bitcoin, make sure you’re not putting all your eggs in one basket, so to speak.
This way, if Bitcoin ends up taking a turn for the worse, one failed investment won’t sink your entire portfolio.
But Bitcoin isn’t right for everyone, and by considering these factors, you can determine whether it’s a smart option for you.