What to know about investing in cryptocurrency

Money

DENVER (KDVR) — Investment trends during the pandemic have many inexperienced investors hoping for big returns. Now, the cryptocurrency Dogecoin will become available at thousands of automatic teller machines across the nation, creating increased enthusiasm.

Many see headlines about GameStop stock swings and the popularity of cryptocurrency and don’t want to miss out on an opportunity to enjoy financial gains, but remain confused about how it all works.

“It seems very confusing. Investing has always been a mystery to me — something I wish I knew more about,” said single mother Fanisa Shamgunova.

Financial experts say the surge in interest is related to the coronavirus pandemic in many cases.

Financial expert Jason Alderson of Elbert Capital Management is president of the Financial Planning Association of Colorado. 

He tells the FOX31 Problem Solvers, he’s seen an increase in those who are employed, working from home during the pandemic, and interested in trying their hand at investing.

“They now have disposable income they aren’t spending on travel, aren’t spending on going out to eat,” Alderson said.

Cryptocurrency can now be used to pay for many online items and services anonymously.  

If the currency’s value increases, investors enjoy a profit, but Alderson warns there is also a risk the value can decrease. He says the main rule of thumb with any type of investment is to “make sure you’re comfortable with it all going to zero.”

Alderson adds those new to investing should rely on expert advice to make informed decisions, especially when investing to support retirement and other financial goals.

He says his job is to “get them to a place where they can fall asleep at night knowing they’re going to be OK.”

Consumer experts warn potential investors to be aware of tax laws concerning income from cryptocurrency.

It is also important to be aware of red flags for scams that utilize cryptocurrency to demand payment.

Some ransom scams demand victims pay them in cryptocurrency in exchange for the return or suppression of personal information. Another warning concerns unknown callers who pitch unrequested stock sales.

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