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Can cryptocurrencies be a wiser investment plan for retirement

Retirement planning means you invest today in various instruments to achieve a certain income goal for the future which will make you financially independent. (REUTERS)Premium
Retirement planning means you invest today in various instruments to achieve a certain income goal for the future which will make you financially independent. (REUTERS)

  • As per CoinMarketCap, there are 20,715 cryptocurrencies available for trading with 520 crypto exchanges. The market cap of cryptocurrencies is around $1.04 trillion as of now. Bitcoin, Ethereum, Tether, USD Coin, BNB, Binance USD, XRP, Cardano, Solana, and DogeCoin are the top 10 cryptocurrencies.

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Despite volatile conditions in the market, the demand for cryptocurrencies does not seem to slow down. The crypto market currently has a valuation of more than $1 trillion with over 20,700 cryptocurrencies available for investments. Bitcoin is the largest cryptocurrency in terms of market cap, followed by Ethereum. From teens to adults, cryptocurrencies are adopted on a global scale as an investment tool despite their sensitive nature. Experts do believe that the blockchain industry is at a booming stage and has a wide-scale approach. Now, it's not just trading in normal cryptocurrency, there are a host of instruments like metaverse, non-fungible tokens, Web3, Defi, stablecoins and decentralisation available in the market. Considering the vast unique investment options in cryptocurrencies, can the market be a wise choice to park your hard-earned money for retirement.?

Retirement planning means you invest today in various instruments to achieve a certain income goal for the future which will make you financially independent. To maintain your lifestyle and meet your needs during retirement, it is important to select the right investment mechanism. You have to contemplate a wise investment plan to achieve lucrative money in your old age.

Cryptocurrencies are subject to market-related risks and are swayed due to internal and external factors. They have a similar pattern to trading in stocks. However, unlike stocks, the regulatory reforms in cryptocurrencies are bleak which is one of the drawbacks of the market. The vulnerability in cryptocurrencies is higher compared to stocks, and also lacks clarity.

As per CoinMarketCap, there are 20,715 cryptocurrencies available for trading with 520 crypto exchanges. The market cap of cryptocurrencies is around $1.04 trillion as of now. Bitcoin, Ethereum, Tether, USD Coin, BNB, Binance USD, XRP, Cardano, Solana, and DogeCoin are the top 10 cryptocurrencies.

Should you choose cryptocurrencies for retirement planning?

Ashwani Kumar, Founder & CEO, HelperWorld said, "Despite the skepticism about cryptocurrencies as an asset class, there has been a mass adoption on a global scale, legalising the concept and many other countries looking to follow suit - investing in cryptocurrencies.

According to Kumar, with wealth management firms making a switch to adding cryptos to their retirement kitties, however, before considering cryptos as a viable option for one’s golden years should consider some crucial factors - age, one's disposable income, and overall risk appetite.

Meanwhile, Abhijit Shukla, CEO & Director, Tarality said, "considered risky for mainstream investors, Crypto has become the alternative asset class of the 21st century."

Tarality CEO believes investment in cryptocurrencies can be a small part of one of retirement planning.

He said, while investing in crypto can be a small part of one’s retirement planning and being a volatile market, it should not hold a huge part of one’s financial strategy, this asset class has the potential to be a diversification tool as the price often doesn't move in accordance with the rest of the market. It may also be used as a hedge against inflation.

Further, Shukla said, "specifically known to fluctuate in prices, every Bitcoin’s value has generally trended upwards. If the investor wants to invest in crypto as part of a buy-and-hold strategy in their retirement plan, it may be a smart option."

Also, on investment in cryptos for retirement, Kumar said, "opting for cryptocurrencies that have long-term potential for a well-balanced retirement portfolio, it should be about 10% of the total investment. Furthermore, keeping one’s crypto in an ‘offline’ or hardware wallet ensures access to its private keys, making them impervious to hacks and malware attacks."

Crypto market today:

On Wednesday, as per CoinMarketCap, the global crypto market cap is currently at $1.04 trillion up by 0.57% over the last day. However, the total crypto market volume over the last 24 hours is $66.54 billion, which makes a 5.96% decrease. The total volume in DeFi is currently $4.88 billion, 7.33% of the total crypto market 24-hour volume. The volume of all stablecoins is now $60.57 billion, which is 91.03% of the total crypto market's 24-hour volume.

Bitcoin is trading at around $21,700, rising by 1.2% over the last 24 hours. While Ethereum surged nearly 3% over the 24 hours and is trading around $1,685. However, Bitcoin and Ethereum have dipped by over 7% and 8% in the last seven trading sessions.

The market leader, Bitcoin has a capitalisation of nearly $413 billion, while Ethereum's market cap is around $204 billion. Bitcoin holds the dominance with a weightage of 39.75% of the total market.

Other cryptocurrencies in the top 10 are - Tether with a market cap of over $67.55 billion, USD Coin at $52.33 billion, BNB at $48.06 billion, Binance USD at $19.04 billion, XRP at $17.11 billion, Cardano at $15.67 billion, Solana at $12.54 billion, and Dogecoin having a cap of around $9.12 billion.

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