Facts About Cryptocurrency
What to know before investing


Over 1 in 10 Americans invested in cryptocurrency in the past year. According to NORC Researchers at the University of Chicago, 13% of Americans purchased or traded cryptocurrency in the last 12 months.
While that number may not seem enormous, consider this: cryptocurrency has only existed since 2009, while stock trading has been around since the 1700s. In comparison, 24% of Americans reported investing in stocks.
So, is cryptocurrency the right investment for you? Here’s what you need to know before deciding.

What is Cryptocurrency?
Cryptocurrency, or crypto, is a type of digital currency used for transactions, much like traditional money. However, it operates without a central governing body.
Crypto is built on blockchain technology—a decentralized and secure ledger system. This structure makes cryptocurrency transactions more secure and transparent.
To buy and trade cryptocurrency, you’ll need an online application called a "wallet." Popular platforms include Coinbase, Robinhood, eToro, Gemini, and TradeStation.

What is Bitcoin?
Bitcoin is the most well-known cryptocurrency. Created by the pseudonymous Satoshi Nakamoto, it dominates the market due to its anonymity, lack of regulation, low transaction fees, and peer-to-peer trading capabilities.
However, Bitcoin isn’t the only cryptocurrency. Others, such as Ethereum and XRP, serve different functions and may be better optimized for specific transactions.

Should You Invest in Cryptocurrency?
Many people believe investing is only for the wealthy, but cryptocurrency is diversifying the landscape. According to the University of Chicago study, cryptocurrency investors come from various backgrounds:
- Age: The average investor is under 40.
- Education: Many crypto investors do not have a college degree.
- Gender: 41% of investors are women.
- Ethnicity: 44% are non-white.
- Income: 35% have a household income under $60,000 per year.
Because of its increasing popularity, cryptocurrency has experienced major price surges. For example, Bitcoin soared from $30,000 in January 2021 to $64,642.40 in April 2021. However, its volatility makes it riskier than stocks, and potential investors should weigh the risks carefully.

What to Know Before Investing in Cryptocurrency
The biggest risk with cryptocurrency is its volatility. Bitcoin, for example, has gone through multiple crashes over the past decade.
Additionally, while crypto is decentralized, government regulations can still impact its value. For example, the Chinese government cracked down on crypto mining in 2021, causing Bitcoin prices to drop below $32,000. On September 24, 2021, China’s central bank declared cryptocurrency-related activities illegal, leading to further uncertainty.
With potential government regulations and unpredictable market shifts, investors should approach cryptocurrency cautiously.