Diversifying makes it less likely you'll suffer a major financial blow should one of your investments not pan out. This is especially true for cryptocurrency.
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“When you’re angel investing, you make a lot of different investments, and many of them fail, some of them are moderately successful, and some of them are incredibly successful,” Proudman said. “It’s that combination that makes your portfolio compelling. Diversifying here is smart for this same reason.”
As it stands right now, though, the Securities and Exchange Commission hasn’t approved an ETF that would hold Bitcoin BTCUSD, +0.60%, nor any that invest directly in other digital assets. Sarah Milby, senior policy manager at the Blockchain Association, an industry group, said it’s unlikely that broader-based funds will debut before U.S. regulators become more comfortable with cryptocurrency markets.
Building your own portfolio One disadvantage of funds is that investors don’t have direct ownership of their portfolios. For this reason, building a portfolio yourself can be appealing, especially when it comes to crypto, which may offer particular advantages. “Financial planners have not done a good job of being a part of this process,” said Justin Pullaro, a certified financial planner based in Florida who advises clients on cryptocurrency.
Though major online crypto exchanges such as Coinbase do not offer such services, new entrants in the field are attempting to fill the gap.
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