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Make Ends Meet: Making money and good decisions with cryptocurrency

Published: Jul. 7, 2021 at 5:53 PM EDT|Updated: Jul. 7, 2021 at 8:44 PM EDT
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LOUISVILLE, Ky. (WAVE) - Have you heard of Bitcoin or Ripple?

There is a lot of curiosity about the world’s latest asset class of cryptocurrency. While cryptocurrency has become a hot commodity Consumer Reports says it is one of the riskier investment choices out there.

“I think the biggest question for people is that value,” explains Leanna Haakons, bestselling author and found of Black Hawk Financial. “How is this thing worth anything?”

Most people are familiar with assets like stocks, bonds, commodities, real estate, and cold hard cash. Bitcoin and the other thousands of digital assets are still new to many people. Haakons warns do not bet the farm on cryptocurrency just yet.

“Cryptocurrency hasn’t proven itself yet,” Haakons stresses. “We don’t know what its value is.”

Many supporters of the digital asset see it as the legal tender of the future and are racing to buy what they can now, presumably before it becomes more valuable.

“We as professional investors, we consider it speculating” shares Haakons. “It’s like gambling. Right now, you’re the one taking the big risk to potentially get that big return.”

WAVE 3 News Digital Director John P. Wise, a cryptocurrency enthusiast, said that rapid change and unpredictability are the most attractive things about the newest asset.

”If you’re comfortable with that volatility that to me is what’s exciting,” proclaimed Wise. “The worst thing about cryptocurrency is that same answer. It’s the volatility.”

Haakons agrees there are definitely skyrocketing peaks and depressive troughs in cryptocurrency trading at a much quicker and more extreme pace compared to other assets in mainstream markets.”

“This should be money that you are willing to lose 100%,” stresses Haakons.

Haakons also believes if this new universal currency is accepted it will affect the existing banking system we know and use daily. There will be no central authority or middleman.

“All of that stuff is eliminated in the banking system,” explains Haakons. “You can imagine retail banks are not so keen on cryptocurrency because is this does become a usable long term store value or means of exchange between people in different countries it’s going to really affect their retail banking revenue.”

If you are thinking about investing in cryptocurrency expect the unexpected. Take time to understand the digital assets you chose so you know about your potential investments. Also, just like any other asset, diversification is key.

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