Smart Strategies for Investing in Bitcoin in Your 20s and 30s

If I were to invest $1,000 in my 20s or 30s and I was looking to add Bitcoin to my portfolio, here are the three things I would make sure to do.

Hello, I'm Tyler. I'm a former financial advisor and portfolio manager. Now, I make financial content for free so that you don't have to pay for it.

1. Look for Low Expense Ratio ETFs

First, I would look for the ETF that tracks the Bitcoin spot prices that has the lowest expense ratio. Currently, eight of the eleven listed ETFs tracking Bitcoin spot prices are custodied by Coinbase. This means that the company packaging these ETFs is managed by the exact same team behind the scenes.

2. Allocate Wisely

Second, I would allocate 20% of my portfolio to investing in one of these ETFs. Why this amount? I certainly don't want to allocate more because if Bitcoin goes under, I want to leave myself with at least an 80% cushion. Market studies indicate that investing 10% to 20% of a portfolio in alternative asset classes—like real estate, commodities, collectibles, Bitcoin, and cryptocurrencies—can outperform the traditional 60% stocks, 40% bonds portfolio, especially during market stress.

3. Invest through a Roth IRA

Lastly, and this is the most important point: if I were to invest in Bitcoin, I would only do it through a Roth IRA. Bitcoin is still a highly speculative asset. Most people are looking to gamble for profit if their bet pays off. If you lose, it doesn't matter where you invest the money, but if you win by investing in a Roth, every penny of capital gains for the next 40 to 50 years of your life would be completely tax-free.

If any of this information is helpful, please like and follow, and I'll continue to guide you one step closer to where you need to be.

Source