If you have $10,000 to invest, should you choose crypto or index funds? The decision depends on your risk tolerance. Crypto offers high volatility for potentially high rewards, while index funds provide slow and steady returns.

Index funds, like those tracking the S&P 500, historically deliver an average annual return of 10.56%. Investing $10,000 today in an S&P 500 index fund at 8% annualized return could grow to $21,589 in 10 years.

Index funds are ideal for diversification, low cost, passive income, and time-tested returns. If you want steady, compounding wealth, index funds are a good choice for long-term investors who are risk-averse.

On the other hand, cryptocurrencies like Bitcoin have seen historical returns of around 49% annually. While the potential upside is significant, crypto investments come with extreme volatility and high risk.

Comparing the two investments, index funds offer lower volatility and moderate risk with a potential return of $25,900 after 10 years, while Bitcoin offers extreme volatility and high risk with a potential return of $573,700 after 10 years.

In the end, the choice between crypto and index funds comes down to your risk tolerance and investment goals. No one can predict the market accurately, so invest wisely and only what you can afford to lose.

Read more at Nasdaq: Crypto vs. Index Funds: What $10,000 Invested in Each Would Look Like After 10 Years