A National Cryptocurrency Association study reveals 55 million Americans invest in crypto, for various reasons from financial growth to curiosity. However, a Gallup survey shows a majority view it as risky, influenced by past crashes like the 2022 collapse that wiped out $2 trillion.

Despite its appeal for massive gains, crypto’s volatility poses significant risks, with coins dropping in value rapidly and platforms being vulnerable to hacks and regulatory crackdowns. A Security.org study found 40% of crypto owners lack confidence in its safety, highlighting ongoing concerns within the market.

Financial planners suggest limiting crypto exposure to 1-5% of a portfolio due to its high volatility. Diversifying investments across various asset classes helps manage risks and stabilizes long-term returns, reducing the impact of market fluctuations and emotional decision-making during downturns.

New investors should prepare for crypto’s volatility with strategies like dollar-cost averaging and a long-term investment horizon. Understanding the risks and having a clear exit strategy can help prevent impulsive decisions driven by market fluctuations and external factors.

Before investing in crypto, consider the purpose of the coin, exchange security, and avoiding hype-driven bets. Storing assets securely in hardware wallets adds an extra layer of protection against hacks, ensuring a safer investment experience in the fragmented crypto ecosystem.

Read more at Yahoo Finance: 55 million Americans invest in crypto, but volatility still rattles nerves. Here are 3 lessons every investor can take