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URLhttps://www.fidelity.com/learning-center/trading-investing/crypto/risks-and-benefits-of-crypto
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Meta TitleShould I invest in crypto? Considerations | Fidelity
Meta DescriptionEducate yourself on these risks and potential benefits of cryptocurrency before investing.
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Crypto risks and potential benefits to consider. Risks and benefits of cryptocurrency There are both risks and benefits associated with cryptocurrencies. It’s crucial to educate yourself before deciding to determine if you’re comfortable with the risks. Here are a few considerations to get you started—note, this is not a full list. Risks of cryptocurrencies Volatility The price of crypto has proven to be extremely volatile , meaning it changes quickly and frequently showing high highs and low lows. While trends can change, there are many factors that contribute to the price fluctuation . Regulatory uncertainties Government regulations around crypto are constantly evolving and may differ based on where you live. Regulations could impact how you use or access your crypto, which can cause volatility and uncertainty. But since crypto is still new, it may take time for policymakers to establish clear, consistent guidelines. Securities and scams Not all cryptocurrencies or trading platforms are created equal. Some platforms are more secure than others, and some newer coins could be a higher scam risk than those more established. There is also no protection or insurance for lost or stolen cryptocurrencies, so always research thoroughly before taking action. Technical There are two main ways to store your crypto : privately in a non-custodial wallet on a personal device, like an app on your phone or laptop or in a cold storage wallet, or using a third-party custodian, like Fidelity Digital Assets ® who offers Fidelity Crypto ® . When storing privately, you are solely responsible for the safety and security of your crypto. If you lose your private key, your hard drive crashes, or a virus corrupts your wallet , you may lose your funds entirely. Benefits of cryptocurrencies Independence Cryptocurrencies were designed to be decentralized without the control of a single government or central bank. A user may have unrestricted access to their coins, but they also have full responsibility for keeping them safe. Accessibility Crypto can be easily accessible to everyone around the clock, even those without access to traditional banking. Only an internet connection and a crypto wallet are required. Lower fees and faster time Crypto transactions can have lower fees and faster transfer times than some traditional bank transactions. For example, crypto can potentially avoid high fees associated with global wires and be accessible within minutes, which is a big difference from a standard 24-to-48 hour bank wire. However day-to-day bank transactions, like depositing checks or withdrawing cash are quick and have no fees. Transparency Cryptocurrencies operate on blockchain technology that is fully public and immutable, meaning it cannot be changed, manipulated, or deleted, and every transaction can be seen or tracked at any time. Mainstream support As cryptocurrencies grow in popularity, mainstream financial institutions and businesses have begun to show interest by offering and/or accepting cryptocurrencies . However, unlike traditional finance that has been around for 300+ years, cryptocurrencies are still in their infancy phase and their future remains uncertain. High return potential Although cryptocurrencies are highly volatile , they have also yielded high returns in the past depending on when purchased. But it’s important to understand that past performance never guarantees or suggests future results. The bottom line Not all coins or platforms are created equal. Crypto is a new, highly volatile asset class, and you need to be comfortable with the risks before taking action. Educate yourself thoroughly before deciding and only invest if you are prepared to lose the entire investment.
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Share ![Share](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/article/share.svg) Close Popover *** Should I invest in crypto? Considerations \| Fidelity Clicking a link will open a new window. - [Facebook](https://www.fidelity.com/learning-center/trading-investing/crypto/risks-and-benefits-of-crypto#facebook) - [Twitter](https://www.fidelity.com/learning-center/trading-investing/crypto/risks-and-benefits-of-crypto#twitter) - [LinkedIn](https://www.fidelity.com/learning-center/trading-investing/crypto/risks-and-benefits-of-crypto#linkedin) [Print ![Print](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/article/Print.svg)](https://www.fidelity.com/learning-center/trading-investing/crypto/risks-and-benefits-of-crypto#print) # Should I invest in crypto? Crypto risks and potential benefits to consider. Fidelity Learn ![](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/heros/600-Crypto-Risks-and-Benefits-Header-Illustration-1.png) ### Risks and benefits of cryptocurrency There are both [risks and benefits](https://www.fidelity.com/learning-center/trading-investing/investing-in-bitcoin) associated with cryptocurrencies. It’s crucial to educate yourself before deciding to determine if you’re comfortable with the risks. Here are a few considerations to get you started—note, this is not a full list. ### Risks of cryptocurrencies **Volatility** ![Infographic explaining cryptocurrency is volatile and crypto price goes up and down.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-2.png) The price of crypto has proven to be extremely [volatile](https://www.fidelity.com/learning-center/trading-investing/bitcoin-price), meaning it changes quickly and frequently showing high highs and low lows. While trends can change, there are many factors that contribute to the price [fluctuation](https://www.fidelity.com/learning-center/trading-investing/crypto/what-makes-crypto-go-up-and-down). **Regulatory uncertainties** ![Infographic explaining crypto regulations are still new.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-3.png) Government regulations around crypto are constantly evolving and may differ based on where you live. Regulations could impact how you use or access your crypto, which can cause volatility and uncertainty. But since crypto is still new, it may take time for policymakers to establish clear, consistent guidelines. **Securities and scams** ![Infographic explaining some cryptocurrency networks could be a higher scam risk.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-4.png) Not all cryptocurrencies or trading platforms are created equal. Some platforms are more secure than others, and some newer coins could be a higher scam risk than those more established. There is also no protection or insurance for lost or stolen cryptocurrencies, so always [research thoroughly](https://www.fidelity.com/learning-center/trading-investing/crypto/evaluate-cryptocurrencies) before taking action. **Technical** ![Infographic explaining how to store cryptocurrency and how to keep cryptocurrency safe.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-5.png) There are two main ways to [store your crypto](https://www.fidelity.com/learning-center/trading-investing/crypto/non-custodial-wallets-vs-custodial-wallets): privately in a non-custodial wallet on a personal device, like an app on your phone or laptop or in a cold storage wallet, or using a third-party custodian, like Fidelity Digital Assets® who offers Fidelity Crypto®. When storing privately, you are solely responsible for the safety and security of your crypto. If you lose your private key, your hard drive crashes, or a virus corrupts your [wallet](https://www.fidelity.com/learning-center/trading-investing/crypto/crypto-wallet), you may lose your funds entirely. ![](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/interactives/crypto-did-you-now-2014-21_large-promo-background.png) ### Did you know? There are over 23,200 cryptocurrencies as of April 2023.1 ### Benefits of cryptocurrencies **Independence** ![Infographic explaining crypto is independent because of decentralization.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-6.png) Cryptocurrencies were designed to be [decentralized](https://www.fidelity.com/learning-center/trading-investing/crypto/decentralized-finance-defined) without the control of a single government or central bank. A user may have unrestricted access to their coins, but they also have full responsibility for keeping them safe. **Accessibility** ![Infographic explaining crypto is easily accessible to anyone with an internet connection.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-7.png) Crypto can be easily accessible to everyone around the clock, even those without access to traditional banking. Only an internet connection and a crypto wallet are required. **Lower fees and faster time** ![Infographic explaining crypto transactions can be faster and cheaper than traditional finance.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-8.png) [Crypto transactions](https://www.fidelity.com/learning-center/trading-investing/crypto/crypto-vs-cash) can have lower fees and faster transfer times than some traditional bank transactions. For example, crypto can potentially avoid high fees associated with global wires and be accessible within minutes, which is a big difference from a standard 24-to-48 hour bank wire. However day-to-day bank transactions, like depositing checks or withdrawing cash are quick and have no fees. **Transparency** ![Infographic explaining how crypto runs on public blockchain technology.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-9.png) Cryptocurrencies operate on [blockchain](https://www.fidelity.com/learning-center/trading-investing/crypto/blockchain-101) technology that is fully public and immutable, meaning it cannot be changed, manipulated, or deleted, and every transaction can be seen or tracked at any time. **Mainstream support** ![Infographic explaining the mainstream adoptions of cryptocurrency.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-10.png) As cryptocurrencies grow in popularity, mainstream financial institutions and businesses have begun to show interest by offering and/or accepting [cryptocurrencies](https://www.fidelity.com/learning-center/trading-investing/crypto/crypto-in-the-real-world). However, unlike traditional finance that has been around for 300+ years, cryptocurrencies are still in their infancy phase and their future remains uncertain. **High return potential** ![Infographic explaining the potential high return cryptocurrencies may yield.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-11.png) Although cryptocurrencies are [highly volatile](https://www.fidelity.com/learning-center/trading-investing/bitcoin-price "highly volatile"), they have also yielded high returns in the past depending on when purchased. But it’s important to understand that past performance never guarantees or suggests future results. ![](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/interactives/crypto-did-you-now-2014-21_large-promo-background.png) ### Did you know? Smart contracts, like those built on Ethereum, will execute automatically when outlined conditions are met. ### The bottom line **Not all coins or platforms are created equal.** Crypto is a new, highly volatile asset class, and you need to be comfortable with the risks before taking action. [Educate yourself thoroughly](https://www.fidelity.com/learning-center/trading-investing/how-to-learn-about-cryptocurrency) before deciding and only invest if you are prepared to lose the entire investment. ## Trade with Fidelity Crypto® Buy, sell, and transfer crypto in the same app where you trade stocks and ETFs. [Open an account](https://www.fidelity.com/crypto/trading) ## More to explore ### [Crypto at Fidelity](https://www.fidelity.com/crypto/overview) Learn about Fidelity's approach and explore investment ideas. ### [Covering Crypto Livestream](https://fidelityevents.com/allevents/special/filtered?hubFilter=tags%7Ccrypto) Get in the know and register for the next event. ## Subscribe to Decode Crypto Clarity on crypto every month. Build your knowledge with education for all levels. ### Looking for more ideas and insights? We'll deliver them right to your inbox. Manage subscriptions ### Thanks for subscribing\! Check out your Favorites page, where you can: - Tell us the topics you want to learn more about - View content you've saved for later - Subscribe to our newsletters [Go to Favorites](https://www.fidelity.com/learning-center/favorites) ### We're on our way, but not quite there yet Good news, you're on the early-access list. But we're not available in your state just yet. As soon as we are, we'll let you know. In the meantime, boost your crypto brainpower in our Learning Center. Manage subscriptions ### Oh, hello again\! Good news, you’re already on the early-access list. Keep an eye on your email for your invitation to Fidelity Crypto. Manage subscriptions Close dialog ### Thanks for subscribing to Looking for more ideas and insights? You might like these too: ### Looking for more ideas and insights? You might like these too: ### *Fidelity Viewpoints®* Timely news and insights from our pros on markets, investing, and personal finance.(debug tcm:2 ... ### Decode Crypto Clarity on crypto every month. Build your knowledge with education for all levels. ### *Fidelity Smart Money℠* What the news means for your money, plus tips to help you spend, save, and invest. ### Active Investor Our most advanced investment insights, strategies, and tools. ### *Insights from Fidelity Wealth Management* ® Timely news, events, and wealth strategies from top Fidelity thought leaders. ### Women Talk Money Real talk and helpful tips about money, investing, and careers. ### Educational Webinars and Events Free financial education from Fidelity and other leading industry professionals. *Fidelity Viewpoints®* Timely news and insights from our pros on markets, investing, and personal finance.(debug tcm:2 ... Decode Crypto Clarity on crypto every month. Build your knowledge with education for all levels. *Fidelity Smart Money℠* What the news means for your money, plus tips to help you spend, save, and invest. Active Investor Our most advanced investment insights, strategies, and tools. *Insights from Fidelity Wealth Management* ® Timely news, events, and wealth strategies from top Fidelity thought leaders. Women Talk Money Real talk and helpful tips about money, investing, and careers. Educational Webinars and Events Free financial education from Fidelity and other leading industry professionals. Done Add subscriptions No, thanks. Loading - [Finding stock and sector ideas](https://www.fidelity.com/learning-center/trading-investing/finding-stocks-and-sector-ideas) - [Investing for beginners](https://www.fidelity.com/learning-center/trading-investing/investing-for-beginners) - [Crypto](https://www.fidelity.com/learning-center/trading-investing/crypto) 1\."All Coins," CoinMarketCap, September 2022, <https://coinmarketcap.com/coins/views/all/> The images, graphs, tools, and videos are for illustrative purposes only. Fidelity Crypto® is offered by Fidelity Digital Assets®. Investing involves risk, including risk of total loss. Crypto as an asset class is highly volatile, can become illiquid at any time, and is for investors with a high risk tolerance. Crypto may also be more susceptible to market manipulation than securities. Crypto is not insured by the Federal Deposit Insurance Corporation, the Securities Investor Protection Corporation, or any other government agency, and is not an obligation of any bank. Investors in crypto do not benefit from the same regulatory protections applicable to registered securities. Fidelity Crypto® accounts and custody and trading of crypto in such accounts are provided by Fidelity Digital Assets, National Association, which is a national trust bank. Brokerage services in support of securities trading are provided by Fidelity Brokerage Services LLC (“FBS”), and related custody services are provided by National Financial Services LLC (“NFS”), each a registered broker-dealer and member NYSE and SIPC. Neither FBS nor NFS offer crypto as a direct investment nor provide trading or custody services for such assets. Fidelity Crypto and Fidelity Digital Assets are registered service marks of FMR LLC. 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zw4SR1mWv8zQEYrcClV137yHSITjs3bAQfYYQRRhhhhBFGGAH8D9DXSGd7oPh2AAAAAElFTkSuQmCC) 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Readable Markdown
Crypto risks and potential benefits to consider. ### Risks and benefits of cryptocurrency There are both [risks and benefits](https://www.fidelity.com/learning-center/trading-investing/investing-in-bitcoin) associated with cryptocurrencies. It’s crucial to educate yourself before deciding to determine if you’re comfortable with the risks. Here are a few considerations to get you started—note, this is not a full list. ### Risks of cryptocurrencies **Volatility** ![Infographic explaining cryptocurrency is volatile and crypto price goes up and down.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-2.png) The price of crypto has proven to be extremely [volatile](https://www.fidelity.com/learning-center/trading-investing/bitcoin-price), meaning it changes quickly and frequently showing high highs and low lows. While trends can change, there are many factors that contribute to the price [fluctuation](https://www.fidelity.com/learning-center/trading-investing/crypto/what-makes-crypto-go-up-and-down). **Regulatory uncertainties** ![Infographic explaining crypto regulations are still new.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-3.png) Government regulations around crypto are constantly evolving and may differ based on where you live. Regulations could impact how you use or access your crypto, which can cause volatility and uncertainty. But since crypto is still new, it may take time for policymakers to establish clear, consistent guidelines. **Securities and scams** ![Infographic explaining some cryptocurrency networks could be a higher scam risk.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-4.png) Not all cryptocurrencies or trading platforms are created equal. Some platforms are more secure than others, and some newer coins could be a higher scam risk than those more established. There is also no protection or insurance for lost or stolen cryptocurrencies, so always [research thoroughly](https://www.fidelity.com/learning-center/trading-investing/crypto/evaluate-cryptocurrencies) before taking action. **Technical** ![Infographic explaining how to store cryptocurrency and how to keep cryptocurrency safe.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-5.png) There are two main ways to [store your crypto](https://www.fidelity.com/learning-center/trading-investing/crypto/non-custodial-wallets-vs-custodial-wallets): privately in a non-custodial wallet on a personal device, like an app on your phone or laptop or in a cold storage wallet, or using a third-party custodian, like Fidelity Digital Assets® who offers Fidelity Crypto®. When storing privately, you are solely responsible for the safety and security of your crypto. If you lose your private key, your hard drive crashes, or a virus corrupts your [wallet](https://www.fidelity.com/learning-center/trading-investing/crypto/crypto-wallet), you may lose your funds entirely. ### Benefits of cryptocurrencies **Independence** ![Infographic explaining crypto is independent because of decentralization.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-6.png) Cryptocurrencies were designed to be [decentralized](https://www.fidelity.com/learning-center/trading-investing/crypto/decentralized-finance-defined) without the control of a single government or central bank. A user may have unrestricted access to their coins, but they also have full responsibility for keeping them safe. **Accessibility** ![Infographic explaining crypto is easily accessible to anyone with an internet connection.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-7.png) Crypto can be easily accessible to everyone around the clock, even those without access to traditional banking. Only an internet connection and a crypto wallet are required. **Lower fees and faster time** ![Infographic explaining crypto transactions can be faster and cheaper than traditional finance.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-8.png) [Crypto transactions](https://www.fidelity.com/learning-center/trading-investing/crypto/crypto-vs-cash) can have lower fees and faster transfer times than some traditional bank transactions. For example, crypto can potentially avoid high fees associated with global wires and be accessible within minutes, which is a big difference from a standard 24-to-48 hour bank wire. However day-to-day bank transactions, like depositing checks or withdrawing cash are quick and have no fees. **Transparency** ![Infographic explaining how crypto runs on public blockchain technology.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-9.png) Cryptocurrencies operate on [blockchain](https://www.fidelity.com/learning-center/trading-investing/crypto/blockchain-101) technology that is fully public and immutable, meaning it cannot be changed, manipulated, or deleted, and every transaction can be seen or tracked at any time. **Mainstream support** ![Infographic explaining the mainstream adoptions of cryptocurrency.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-10.png) As cryptocurrencies grow in popularity, mainstream financial institutions and businesses have begun to show interest by offering and/or accepting [cryptocurrencies](https://www.fidelity.com/learning-center/trading-investing/crypto/crypto-in-the-real-world). However, unlike traditional finance that has been around for 300+ years, cryptocurrencies are still in their infancy phase and their future remains uncertain. **High return potential** ![Infographic explaining the potential high return cryptocurrencies may yield.](https://www.fidelity.com/bin-public/600_Fidelity_Com_English/images/learning-center/charts-and-graphics/600-Crypto-Risks-and-Benefits-Illustration-11.png) Although cryptocurrencies are [highly volatile](https://www.fidelity.com/learning-center/trading-investing/bitcoin-price "highly volatile"), they have also yielded high returns in the past depending on when purchased. But it’s important to understand that past performance never guarantees or suggests future results. ### The bottom line **Not all coins or platforms are created equal.** Crypto is a new, highly volatile asset class, and you need to be comfortable with the risks before taking action. [Educate yourself thoroughly](https://www.fidelity.com/learning-center/trading-investing/how-to-learn-about-cryptocurrency) before deciding and only invest if you are prepared to lose the entire investment.
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Content Metadata
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Original Publish Time2022-11-04 17:54:52 (3 years ago)
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