Lincoln Finance Professional Talks Cryptocurrency Risks

There are several types of cryptocurrency, the most popular being bitcoin.

LINCOLN, Neb. (KLKN) – The cryptocurrency bitcoin has been on a rollercoaster ride this year, with steep declines and increases in value.

Local financial professional Tim Kulhanek of Stonebridge Insurance and Wealth Management says it is important to know what cryptocurrency is before investing in it.

Cryptocurrency is digital currency created by using computers to “mine” unique tokens by solving complex mathematical problems. There are several types of cryptocurrency, the most popular being bitcoin. Bitcoin and other cryptocurrencies are mostly unregulated, and many governments are concerned about taxes and their lack of control over currencies.

Why is the value of Bitcoin so unstable?

  • Bitcoin’s value is basically based on what people think it’s worth at the moment, and as we’ve seen with other high-risk investments like stocks, that opinion can change quickly.
  • Bitcoin is not like regular money; it’s called a decentralized currency because it’s created by so-called miners all over the world

Is cryptocurrency too risky for the average investor?

  • Cryptocurrencies are often considered risky investments due to their instability; unexpected changes can lead to sharp and sudden price movements
  • Experts advise investing only as much money as you are willing to lose

Kulhanek advises his clients to separate their cryptocurrency investment from their retirement funds. For those significant savings, he suggests you have a balanced portfolio.

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