What crypto is
Cryptocurrencies are digital assets recorded on blockchains, public ledgers maintained by networks of computers instead of a bank. Bitcoin was the first and is often seen as digital gold. Ethereum runs programmable contracts, which power apps in finance, gaming and more. Thousands of other tokens exist, most with far less track record.
What moves prices
- Adoption by individuals, companies and funds.
- Regulation and legal news.
- Supply rules, for example Bitcoin's fixed cap and halving events.
- Overall risk appetite and liquidity in global markets.
- Sentiment, which can swing fast.
Risks to respect
Crypto trades around the clock and can move 10% or more in a day. Smaller tokens can lose almost all of their value. Scams, hacks and poor custody are real dangers. Because of this, crypto is usually a slice of a portfolio, not all of it.
How investors use it
Veterans tend to hold a core of the largest assets, add on schedule through dollar-cost averaging, and rebalance when crypto grows beyond their target share. Newcomers often start small, such as 5% to 10% of their plan, and increase only as they get comfortable.
How Redtail handles it
When you allocate to crypto, our desk manages the positions and custody for you. You do not need a wallet, exchange account or keys to participate in your plan.
Key takeaways
- Crypto is high risk and high volatility.
- Size it as a slice, not the whole portfolio.
- Scheduled buying reduces timing stress.
This lesson is general education and not personal financial, tax or legal advice. Investing involves risk, including loss of principal.