Many or all of the products here are from our partners. We may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

Man

Image source: Getty Images

Should you invest in Bitcoin? That depends on your motivation.

Theres a growing interest in Bitcoin investing. And its becoming easier than ever to buy major coins through mainstream cryptocurrency apps like Cash App and Robinhood. So its no surprise Bitcoin began a second surge in 2020 and has continued a meteoric rise in value for months.

Any serious investor would be remiss to ignore the flagship cryptocurrency altogether. But is it actually a good investment? That depends on why you’re buying in.

One email a day could help you save thousands

Tips and tricks from the experts delivered straight to your inbox that could help you save thousands of dollars. Sign up now for free access to our Personal Finance Boot Camp.

By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.

Good reasons to buy Bitcoin

Depending on your financial situation, these could be sound reasons to put some money into Bitcoin.

1. You want to invest money you can afford to lose

Regardless of our budgets, we all have an amount of money in mind that we can afford to lose without it having a major impact on daily life or long-term financial goals.

If you’re risk-tolerant, you might put that money into investments for the chance to see it grow -- knowing you’re also OK if it shrinks. Crypto values are volatile, even for a mainstay like Bitcoin. That means there are periodic major upswings, but you also have to be able to weather losing money if the value swings down.

src=https://m.foolcdn.com/media/affiliates/cta-art/ctaGraphic-broker.png

The Ascents picks for the best online stock brokers

Find the best stock broker for you among these top picks. Whether youre looking for a special sign-up offer, outstanding customer support, $0 commissions, intuitive mobile apps, or more, youll find a stock broker to fit your trading needs.

See the picks

2. You want to use it to buy things

You might want to buy Bitcoin to use as currency (as opposed to an investment). For example, you might make purchases through platforms that trade in crypto or offer better prices when you pay with crypto. If you need to make a purchase or send money internationally, you might find Bitcoin offers a more favorable exchange rate than USD.

3. You value decentralization of currency

Depending on where you live and your history with economies around the world, you might be wary of government-regulated currencies and central banks.

Because of its volatility, cryptocurrency isn’t the perfect solution to things like hyperinflation or government corruption that put citizens’ money at risk. But you might decide it’s a more fitting place for some of your assets than traditional financial institutions.

Bad reasons to buy Bitcoin

On the other hand, you may not want to buy Bitcoin if either of these is your main motivation.

1. You want to get rich

We tend to mostly hear about Bitcoin in the news when the value of the currency skyrockets.

Those stories -- and the lack of attention to equally dramatic drops in the coin’s value -- make the investment a magnet for anyone who hopes to get rich quickly without effort.

However, there’s no guarantee of riches with any investment, least of all with an unregulated asset that’s younger than most TikTok stars. It’s true that the currency has increased significantly in value overall since its inception, but with just 12 years of market history to draw on, no reasonable expert can make a prediction about the long-term prospects for this investment. If your goal is growth, your money is probably safer with traditional stock brokers -- where the market has more than 100 years to back up its reliability for long-term gains.

Buying your first stocks: Do it the smart way

Once you’ve chosen one of our top-rated brokers, you need to make sure you’re buying the right stocks. We think there’s no better place to start than with Stock Advisor, the flagship stock-picking service of our company, The Motley Fool. You’ll get two new stock picks every month, plus 10 starter stocks and best buys now. Over the past 17 years, Stock Advisor’s average stock pick has seen a 581% return — more than 4x that of the S&P 500! (as of 8/18/2021). Learn more and get started today with a special new member discount.

Start investing

2. You think it’s a safe store of value

Many financial experts laud Bitcoin as a way to protect your money from inflation over time. The argument is that cryptocurrency isn’t affected by government actions -- like printing too much money or geopolitical conflicts -- that can decrease the value of regular, government-issued currencies.

But cryptocurrency is subject to major market swings based on demand and speculation. Compared with USD, this poses a more significant risk to the value of your wealth than government actions.

Should you buy Bitcoin?

Bitcoin can be a worthwhile investment if you approach it with reasonable expectations and allocate your money cautiously.

Before buying Bitcoin, make sure your basic finances are on solid ground. That means having enough money to cover your usual expenses -- plus three to six months worth of savings in your emergency fund. Its also a good idea to contribute to a retirement account. Bitcoin won’t guarantee you the headline-grabbing riches it’s famous for, so secure your own financial future first.

Using the wrong broker could cost you serious money

Over the long term, theres been no better way to grow your wealth than investing in the stock market. But using the wrong broker could make a big dent in your investing returns. Our experts have ranked and reviewed the top online stock brokers - simply click here to see the results and learn how to take advantage of the free trades and cash bonuses that our top-rated brokers are offering.

About the Author

Dana Sitar (@danasitar) has been writing and editing since 2011, covering personal finance, careers, and digital media.

Share This Page

Featured Articles

Say hello

Find us at the office

Overmann- Mucha street no. 55, 74667 Papeete, French Polynesia

Give us a ring

Juanfrancisco Develder
+76 987 423 417
Mon - Fri, 8:00-17:00

Reach out