There is no official way to become a professional crypto and NFT advisor. You can become licensed as a professional cryptocurrency advisor, but most U.S. states require businesses retailing cryptocurrencies to become licensed as a money transmitter business. Crypto falls into this category, and the licensing gives the Financial Crimes Enforcement Network (FinCEN) the authority to take action against money laundering and fraud. The individuals are not required to get licensed to work for these businesses, however.
For those who believe in the future of crypto and NFTs, they’re a good investment. They offer protection through diversification of assets, and they’re immune to political manipulation or inflation. Mathematical algorithms enforce caps, preventing value dilution.
Some financial advisors list digital assets as part of their services, but that doesn’t make them the best choice for your needs. Ask about blockchain and crypto or NFT assets to gauge their knowledge and comfort with these assets.
But to be safe, it’s best to work with a crypto or NFT advisor. You know these advisors believe in the future of digital assets and can help you make the best decisions, rather than trying to talk you out of the investment because of risk or volatility. A company like Crowdcreate has been at the forefront of the crypto and NFT space since the movement’s inception and can help you navigate this complex industry. Schedule a call with us to learn more.
Make sure to do your research. Understand the technology behind cryptocurrencies and NFTs – blockchain. Start slowly and only invest what you’re comfortable losing, purchasing small amounts over time with a dollar cost averaging strategy. Crypto can have wide price swings compared to public stocks, so prepare for volatility.
The majority of financial advisors may not be comfortable with recommendations for investing in cryptocurrencies. A crypto and NFT advisor knows the market and industry and understands the risks involved, giving their clients a better understanding of the potential pitfalls or limitations. Advisors in this space also understand the tax reporting obligations and custody, helping clients make informed decisions about whether this asset class is appropriate for their portfolio.
Cryptocurrency can be used for any purchase from a seller who accepts cryptocurrency. You cannot use crypto to contribute to an IRA or 401(k), however. Once the contribution is made, however, you can purchase cryptocurrency in some retirement accounts.
There are thousands of cryptocurrencies for investing or trading. Bitcoin is the largest – and most famous – boasting a market capitalization of over $1 trillion. The second largest is Ethereum, which has a market capitalization of over $500 billion. There are also brand new cryptocurrencies that began trading with no market capitalizations at all.
Crypto and NFTs have tax implications, so it’s important to consult with a tax professional before investing to understand which transactions are taxable and which are not. Exchanging one type of cryptocurrency, such as Bitcoin, with another, like Ethereum, is a taxable incident. You should also have a system in place to track and collate transactions to ensure that you have everything organized – these transactions can amass to thousands in just one year.
No, it’s not. A common misconception is that crypto is viewed the same as cash from a tax perspective, and that couldn’t be further from the truth. When you use cryptocurrency to purchase a product, the IRS views it as a sale of property. So, you have to report the sale and amount of the crypto and the product, which in most cases has increased in value since your original purchase. This is a taxable gain. In the end, the product cost you not only what you paid for it, but the tax on the gain from the cryptocurrency you used for the purchase.
Cryptocurrencies and NFTs are highly volatile. You should only invest as much as you’re comfortable losing without jeopardizing your financial future.
Past performance is not an indicator of future investment results. If the asset class in general has performed well recently, that doesn’t mean it will continue into the future. This is what makes crypto and NFTs so volatile.
Yes! That’s what we do at Crowdcreate. We’ll help you protect your financial future and reach your goals with your investments in digital assets like crypto and NFTs. Aside from knowing the market inside and out, we have strong connections with creators and brands in this space and can help you determine the best projects to back with your hard-earned cash. Book a call today!