President Donald Trump is expanding his wealth while in office through a more modern investment: cryptocurrency. Trump favors cryptocurrency so much that his Bitcoin holdings now account for about two-thirds of his liquid assets.
So how is Trump growing his net worth through cryptocurrency — and should you do the same? Keep reading to find out.
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Trump’s Cryptocurrency Wealth
Most of Trump’s cryptocurrency-related wealth is held by the publicly traded (Nasdaq: DJT) Trump Media and Technology Group. The company was recently valued at $2.3 billion, with a significant portion of its value tied to Bitcoin. Trump has also earned millions of dollars in cryptocurrency via other ventures, such as the meme coin $TRUMP and the decentralized entity World Liberty Financial.
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Pros of Cryptocurrency Investing
There are a few reasons why Trump and other investors put a significant amount of money into cryptocurrency, including:
- Huge growth potential: Currently priced at over $119,000, Bitcoin’s value has skyrocketed in the past five years, according to Coinbase.
- Decentralization: You don’t have to deal with a third-party financial institution.
- Trade availability: Unlike the stock market, cryptocurrency exchanges don’t close for nights, weekends or holidays.
Cons of Cryptocurrency Investing
On the other hand, there are a few reasons why some investors avoid putting their money into cryptocurrency, such as:
- Extreme volatility: There have been several major drops in value within the last 15 or so years.
- Security issues: While improvements have been made recently, people remember headlines about scams and account hacks from the not-too-distant past.
- Little regulation: While Trump is pushing for the United States to become a global leader in cryptocurrency, the industry is still in its infancy and subject to few pieces of legislation.
- Limited acceptance: While more companies are accepting cryptocurrency as a form of payment, its adoption is not yet widespread.
Is Cryptocurrency Investing Right for You?
If you’re comfortable with the potential risks involved, you may want to consider investing in cryptocurrency. However, it’s probably wise to limit your cryptocurrency holdings to a small percentage of your portfolio. You may also want to diversify your cryptocurrency investments by purchasing different coins.
If you’re concerned with the security of cryptocurrency exchanges, you might want to invest in exchange-traded funds (ETFs) that include cryptocurrency. That way, you can gain exposure to the asset class with less potential risk.
Best Financial Practices Before Investing in Cryptocurrency
Before you invest a single dollar in cryptocurrency, it’s a smart idea to do these two things:
- Make sure your financial house is in order. Build an emergency fund. Pay off high-interest debt. Get your full employer match in your retirement account (if applicable).
- Learn about cryptocurrency. Understand how blockchain technology works. Research specific coins. Consider meeting with a financial advisor who has expertise in cryptocurrency.
Remember: Investing in cryptocurrency can be a path to wealth, but it’s not the only way to achieve financial freedom. Don’t forget about the tried-and-true investments, like stocks, bonds and real estate. Your financial advisor can help you determine which investments align best with your goals, investment horizon and risk tolerance.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: Trump’s Net Worth Is Growing Thanks to This One Asset — Should You Buy It?
