Laura Adams, spokesperson for the Digital Asset Advocacy Group, joins Cheddar News' Closing Bell, where she says the decision to invest in crypto right now, a period of heightened volatility, depends on multiple factors like risk tolerance and an investor's timeframe.

Closing Bell

Decision to Invest in Crypto During Volatility Depends on Factors Like Risk Tolerance and Timeframe

Okay, well, crypto becomes more accessible. Were seen to be utilized in many different ways, including in some 401K plans. But what does the volatility that we're seeing now mean for the average investor Bitcoin falling from close to 69,000 in November to now below 30,000 in just six months. Well, to help us answer these questions, I'm joined by Laura Adams, spokesperson for the digital asset advocacy group that's a nonprofit organization promoting safe and regulated digital currency financial practices. Laura, thanks so much for coming on the show amid the sharp sell out that we've seen in crypto, do you think it's safe for average investors to buy in now? You know, it really depends on what your financial goals are, your tolerance for risk and what's your time horizon is? If you're somebody who likes risk and you're looking at a long term investment, it may be great if you are somebody that needs to spend that, let's say your retirement funds right away, You know, it may not be the best investment for you. Um so being in a volatile market is something that is just a part of Cryptocurrency. So if it's not something that's, you know, part of your, part of your desired, an ideal portfolio, it may not be right for you right now. Okay, so for those with a long term view, it sounds like maybe it is potentially an opportunity, but for anyone on a short term basis, certainly by or beware one of the biggest stories I know Laura over the past couple of weeks has been this collapse of the terra usd stable coin and its sister token luna. Could this event change the crypto industry forever? Yeah. You know, crypto is volatile. We know that we've seen that and I think while we can't change that fact, what we do have control over is what we purchase and the companies that we do business with in the crypto space. Um a lot of the volatility has been kind of difficult for those who have crypto loans right now that have to keep a loan to value ratio as they've seen those balances go down. You know, that can be difficult. Um, so the digital asset advocacy group, we want to make sure that consumers understand not only the benefits of crypto and products like crypto lending, but they also understand the potential risks. Uh, and so doing your due diligence, making sure you understand the companies, the founders, you know, the projects that are behind these coins is critical, you know, and whether you decide to purchase them and and make an investment, how mainstream is crypto these days? And has the recent selloff changed that? Yeah, you know, it is becoming mainstream, we know about 20% or more Americans already own crypto, that's about 50 or 60 million Americans. Um, so you know, we want to make sure that they're using their crypto assets appropriately and safely. Um you know, we've seen a lot of things going on in the markets right now that show some consumers are not getting the customer service that they are looking for companies like next. So we've seen a lot of chatter right now about folks not being able to communicate with them, they're not seeing transparency. So I think in order for crypto to have a future, there needs to be an ecosystem of companies that are providing great service and are really communicating and being transparent with their customers. That's great for customers, but also great for the entire crypto community. People will now be able to add crypto to their four oh one K s. So laura for anyone considering doing that are looking at alternative investments, What's the proper ratio for them? How should they diversify their portfolio and think about getting into crypto? That's right. So thinking about a diversified portfolio is always very wise. That means for any asset, particularly an alternative asset, like crypto, maybe you want to limit that. It could be 5%, maybe up to 20% of your portfolio. Again, depending on your risk tolerance and your financial goals. I think it's really exciting that consumers will have the opportunity to choose crypto in their portfolios. Um, but they need to just do that carefully and, you know, I would say if anybody is in crypto or has a negative experience with crypto, they need to share that. They need to share it with the community and with regulators. Uh, and so I would encourage folks to visit digital asset advocacy dot org. That's a great place not only to look at reviews for different companies, but to write a review about an experience that you may have had with crypto or an experience that you have in the future. Think that crypto is here to stay. I do. I absolutely think it's here to stay and um, you know, that means that consumers need to be educated and that's really what our messages is. Consumers need to understand what they're buying. They need to really do their due diligence, understand the products and then if they still feel comfortable, then maybe it makes sense to invest in crypto or even take out a crypto loan. Uh, it's just like any other financial products out there, like, you know, a mortgage or a car loan that you might take out, you want to do your homework and make sure that you are dealing with reputable companies, they're gonna that are going to treat you fairly and protect you alright, Laura Adams, spokesperson for the digital asset advocacy group, Laura, thanks so much for joining the show