I’m not selling, but I need to focus on other financial goals.
- It’s important to ensure high-risk assets like crypto only represent a small percentage of your portfolio.
- There’s a lot of uncertainty about regulation and the economy that could cause crypto prices to fall even further.
- Crypto investors shouldn’t ignore the darker side of the industry.
I’m passionate about cryptocurrency and optimistic about the way Bitcoin (BTC) and blockchain technology could eventually transform whole industries. I have continued to buy crypto during the ongoing market slump. But more recently, I’ve paused my crypto purchases, at least for a little while.
To be clear, I’m not selling any of my existing investments. I plan to hold for at least 10 years, and probably more, and I’m earning decent rates of interest on many of my crypto assets. However, for me, it’s a good time to take a step back. Here are four reasons why.
1. My portfolio is out of balance
Many experts recommend that crypto make up only a small percentage of your portfolio. And they are right — this is a high-risk asset class that may collapse completely. However, I spend most of my days reading and writing about cryptocurrencies, and I sometimes get a little too enthusiastic. Especially recently when prices have been low, it’s tempting to pick up a little more crypto each time they slump further.
Crypto currently represents about 20% of my portfolio, but I don’t want to sell any of my crypto. Instead, I’m going to stop buying digital assets while I focus on building up other parts of my portfolio, particularly equities. I also had to dip into my emergency fund recently, so topping that up is a priority. I’m comfortable with my crypto investments, but now I want to focus on other things.
2. I want to see what regulation will bring
Crypto regulation is a divisive topic. Some believe it goes against the decentralized ethos of cryptocurrency, while others think it is essential if the industry is to mature and flourish. I fall into the latter category. But there are a lot of caveats, primarily that we simply don’t know how harsh the impending regulatory framework will be.
We’re in a regulatory waiting game. Many countries recognize the need for more crypto rules, but have yet to decide what shape they might take. Clear and well-thought out …….