Crypto can be volatile
Bitcoin’s high volatility (risk) makes it a poor substitute for money in a broad sense. The unsteady air around cryptocurrencies in May showed the speculative nature of this asset class. Bitcoin and cryptocurrencies in general have more in common with commodities and currencies – they are much harder to value than cashflow-producing equities and bonds.
Reasons to be crypto cautious:
• Cryptocurrencies are a volatile choice and susceptible to stock market bubbles, which can affect investments negatively during a downturn.
• They’re not a tangible form of investment, and are not regulated, which can be a red flag when it comes to your investments.
• Volatility means investors are likely to act on doubts and sell if they fear a fall in return.