2 reasons to invest in crypto now – and 1 reason to avoid it

The past year has been particularly volatile for crypto, as prices hit both record highs and plummeting lows. With the stock market on shaky ground and a recession possibly looming, it doesn’t look like this volatility will end anytime soon either.

That said, despite the ups and downs, right now could be a smart opportunity to invest in crypto. If you’ve been on the fence about investing, there are two good reasons to consider buying now — and one reason to avoid crypto altogether.

Why you might want to invest right now

When the market is in a downturn and cryptocurrency prices are falling rapidly, it may seem like the worst time to invest. However, recessions can actually be one of the most affordable times to buy.

Crypto is a notoriously expensive investment. On top, Bitcoin (BTC -1.51%) was priced at nearly $70,000 per token. Ethereum (ETH -1.73%) costs approximately $4,800 per token. However, currently they are priced at $24,000 and $1,700 per token respectively.

If you’ve ever considered buying cryptocurrency, now might be the time to do so. Prices are well off their all-time highs, and if they get anywhere near those highs again, you could potentially make a lot of money by investing now.

Crypto is extremely volatile at times, and the downturns can be tough to endure. However, an investment’s long-term performance is more important than its short-term ups and downs.

Historically, those who have stayed invested for a long time have seen significant rewards. For example, despite its price falling by more than 50% since the beginning of the year, Bitcoin is still up roughly 576% over the past five years.

Of course, no one knows for sure whether crypto will succeed over time. But if it does, you can potentially make significant returns by investing now and keeping those investments for the long term.

When it’s better to steer clear

Cryptocurrency can be a potentially lucrative investment, but it’s not right for everyone. Because the whole sector is still speculative right now, it can be incredibly risky – and there’s always a chance you could lose all the money you invest.

It can be difficult to afford that kind of risk, especially if money is tight. If you only have a small amount of cash to invest, you may want to focus on stocks, index funds, ETFs or other “safer” investments before buying crypto.

Even if you can swing it, not everyone wants to take on a high-risk investment, and that’s okay. Everyone’s investment preferences are different. If you know you’ll lose sleep over the constant ups and downs, it might not be the best fit for your portfolio.

Crypto is a volatile investment, but patience can pay off over time. Although not right for everyone, if you are willing to take on more risk for potentially lucrative rewards, now could be an excellent opportunity to invest.