A separate funding, however no much less danger
You would possibly suppose that investing in cryptocurrency is an effective option to hedge your bets in case shares take a beating, and that is not a nasty concept. The truth is that cryptocurrencies do not essentially transfer with the inventory market, so you can run right into a scenario the place your inventory portfolio is down however your crypto investments are up.
Equally, cryptocurrencies, like shares, will be purchased and bought. In case your inventory investments take a beating and also you want cash, liquidating some crypto positions may offer you entry to money with out having to faucet your inventory portfolio when it is down.
However make no mistake about it — cryptocurrency remains to be a really speculative, dangerous funding, and whereas it might look like a great way to guard your self within the face of inventory market volatility, that technique may simply backfire. In any case, what occurs when inventory values plummet on the similar time the cryptocurrency market experiences its personal shake-up? At that time, you can be hit with a double whammy.
Whereas it is a good suggestion to carry investments apart from shares for defense towards a market crash, cryptocurrency is not essentially your finest wager in that regard. A extra secure different may very well be actual property. The actual property market additionally tends to function independently of the inventory market, and in the event you take the cash you are pondering of investing in cryptocurrency and use it to purchase an earnings property, for instance, you may safe a gradual stream of rental earnings for your self that may function a supply of monetary safety if inventory values plummet.