Bitcoin has crushed the S&P 500 so far in 2021, even after plunging about 12% in the past week.
With so much excitement surrounding cryptocurrency, you may be wondering, could you retire on Bitcoin alone? But not so fast.
But it’s highly unlikely that your employer-sponsored retirement plan allows you to invest in Bitcoin because your employer is a fiduciary and has the obligation to make appropriate investment decisions.
After briefly crossing the $20,000 mark in late 2017, Bitcoin lost more than 80% of its value over the next year.
Since the cryptocurrency is relatively new, we don’t have a lot of evidence to support how Bitcoin will perform decades into the future.
The question here isn’t, “Should you invest in Bitcoin?” The question is, “Should you invest retirement money in Bitcoin?” If you have a high risk tolerance, Bitcoin may very well make sense as an investment.
You don’t want to stake everything in a single investment, be it an individual stock, a cryptocurrency, or any other asset.
The danger of putting all your retirement money in a highly volatile asset like Bitcoin is that the timing of your retirement doesn’t always happen according to plan.
If you believe in the future of cryptocurrency and you can stomach the ups and downs, Bitcoin could help you build serious wealth.
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