What analysts, professors and money pros say you should know about crypto now

Crypto was hot, until it wasn’t. At the time of writing, Bitcoin and Ethereum had year-over-year losses of more than 50%. It might sound quite scary, but big price swings are nothing new to those who have been in the game for a while. Anyone following since its birth in 2009 remembers Bitcoin’s meteoric rise from zero to $1,237.55 in December 2013. Just three days after this peak, the price had already plunged by roughly 44% to $687. And those who hadn’t withdrawn were awarded again a couple of short years later after the steady increase to more than $19,345 by the end of 2017.

Following the crypto industry’s latest bout of volatility, Americans’ overall attitudes toward the digital currency have plummeted. Since 2021, their overall comfort levels have dropped by as much as 12%, a Bankrate survey found.

The only surprising thing about this number, according to Bankrate analyst James Royal, is that it has stayed as high as it has. “Traders are betting on something that is not backed by the assets or cash flow of an underlying company, in most cases,” says Royal. “Many Americans have woken up to discover that their crypto is worth no more than pet rocks. It’s no surprise that Americans are losing faith in a confidence game.”

Not everyone is equally concerned about the declines. Omid Malekan, assistant professor at Columbia Business School and author of the forthcoming book “Re-Architecting Trust: The Curse of History and the Crypto Cure for Money, Markets and Platforms,” ​​says for those who were originally attracted to crypto because of the core value. proposal, that the core value is still there. “If you believe in the technology, its decentralization … which is globally available, then none of that has changed,” says Malekan.

For those with a higher risk tolerance, there is still potential for large gains in the long term, he says. Consider Bitcoin’s most recent peak of more than $68,000 per coin in 2021. Although it was a bumpy ride — and has since fallen significantly below $20,000 — Malekan says a willingness to stick to your convictions can come with big rewards in the crypto game, recalling that “the internet took over a decade to come to fruition.” But he adds: “I think for those new to the highly volatile asset class, if you’re going to get involved, you should be careful how you do it.”

How much is the right amount to invest?

Well, you don’t have to invest at all, and it’s important to understand that you can lose everything, and that there is “intense” volatility, as Royal puts it. But if you’re looking to get into crypto, Halbert Hargrove Senior Wealth Advisor and Certified Financial Planner David Koch says anyone looking should avoid investing more than they’re comfortable losing. “Don’t put next month’s rent check into the new, new digital token,” Koch said.

Since the crypto industry is also relatively young, Koch adds that it’s important to “do your research” and “use due diligence when working with an exchange or a custodian like Coinbase or Gemini,” noting that some exchanges have been hacked in the past. and forced to go bankrupt.

“If you choose a trading platform, go with a well-established exchange that has a history of security,” says Royal. “There are too many crypto scams out there trying to prey on newbies.”

5 Crypto Exchanges to Consider

If you are considering starting to invest in digital assets, here are five of the most recommended crypto exchanges that offer competitive commissions and wide access to tradable coins that you might want to consider.

The twins

This exchange allows you to buy, sell and trade more than 100 cryptocurrencies in all 50 states with low fees and easy access. It is listed as a New York trust company and regulated by the New York State Department of Financial Services. Check out the program’s Gemini Earn program for a unique way to earn interest on your crypto holdings and the Gemini Credit Card.

• Commission: Up to 1.49% depending on trading platform; 3.49% for debit card purchases

• Tradable Coins: 100+

• Other: The Gemini Credit Card offers up to 3% back on food (up to $6,000 in annual spending, then 1%), 2% on groceries and 1% on other purchases

Coin base

Coinbase serves more than 103 million customers with access to buy, sell and store your digital assets as well as NFTs. You can also earn up to 4% back when you shop with the Coinbase Visa™ Debit Card. The platform also promises $200 in crypto for signing up.

• Commission: 0.5% to 4.5% depending on payment method, cryptocurrency type, transaction size and platform

• Tradable Coins: 150+

• Other: $2 trade minimum.

Binance

One of the relatively newer players in the crypto space, Binance.US opened its digital gates in late 2019. The platform offers a tiered fee structure and offers free bitcoin trading in the US. There is also a 25% discount on all trading fees when you pay with Binance Coins, or BNB. When you invite friends to join, you can also earn $10 in credit to your account when they complete at least $100 in purchases and/or trades within 30 days of account verification.

• Commission: 0.1% spot trading fee, 0.5% instant buy/sell fee and debit card transactions yield 4.5%

• Tradable Coins: 130+

Crypto.com

The fees here may be higher than the competition, but Crypto.com has access to buy and sell more than 250 coins. The exchange was founded in 2016 and provides international access and meets regulatory standards worldwide. Users here can also earn coin-based rewards with the Crypto.com Visa card.

• Commission: 0.4% producer fee, 0.4% recipient fee, plus 2.99% for credit card purchases

• Tradable Coins: 250+

Kraken

Launched in 2011, San Francisco-based Kraken is one of the longest running crypto exchanges on the market today. It has a customer base of more than 9 million customers, provides access to more than 190 countries and has a quarterly trading volume of more than $207 billion, according to the company’s website. In addition to its competitive trading fees, Kraken offers 24-hour customer service and a range of digital and fiat currency funding with US dollars, Euros and Canadian dollars. Consider the platform’s advanced alternative, Kraken Pro, for volume discounts and lower costs. Also check out the Education Portal for a series of training videos and in-depth lessons on cryptocurrency, non-fungible tokens (NFT) and more.

• Commission: Flat fee of 0.9% for stablecoins, 1.5% for other cryptos (lower with Kraken Pro)

• Minimum account: $1

• Tradable Coins: 185+