What You Need to Know About CRYPTO

Even if you’re not ready to invest in cryptocurrencies, it’s important to understand the role they play in modern finance.

- LISA GERSTNER

Whether or not you dabble in cryptocurrency, it’s hard to avoid hearing about it these days. Bitcoin has taken investors on a roller-coaster ride, with the price of one bitcoin surpassing $60,000 a few times in 2021 and dipping as low as about $30,000 between peaks, including a rout in mid-May. The major Los Angeles sports and entertainment venue was formerly known as the Staples Center now bears the name Crypto.com Arena, and well-known figures from Tom Brady to Kim Kardashian have touted cryptocurrencies and their platforms. After social-media site Twitter accepted Elon Musk’s buyout offer in April, dogecoin, a cryptocurrency Musk has openly supported, jumped in value.

With all the noise surrounding crypto—not to mention the accompanying jumble of esoteric terminology— it’s easy to write it off as a fad or an investment prospect too complicated and too risky to consider. But even many of those who are skeptical of the crypto craze acknowledge that digital currencies and assets are here to stay in some form. And the crypto-curious are growing in rank. Research firm Insider Intelligence predicts that almost 13% of the U.S. population will own crypto by the end of 2022, compared with nearly 11% last year.

You may not dive into the crypto exchanges today, but getting a handle on what crypto is, how it works and how you can use it will help you decide whether it has a place in your financial life. And if you do want to dip a toe in crypto, we have advice on how to do it prudently.

UNDERSTANDING THE BASICS