Risk in having our retirement fund in crypto

This article intends to not demotivate people who are investing in crypto. Every investment will have some kind of risk. This article is exclusively for people who think that their retirement funds should stay inside crypto just because they don't think FIAT has a future or the world is moving towards decentralization and cryptocurrencies. I would like to highlight the risks and tell those people that we are not in such a decentralized world yet and the world is not yet ready for something like that and it is highly risky to have all our investments and retirement funds inside the crypto world.

Retirement funds are usually the hard-earned money. Some people work very hard for several years and accumulate a lot of money which they get as a settlement when they retire. Most of the time the money people get as a settlement after several years of working is sufficient for them to lead their retirement life. Mostly this concept of retirement is common in government jobs in India. That is where the amount received during retirement is very big. Some people are very careful in deciding where they invest their retirement funds because that fund is going to save them for the remaining days of their life. Some people are very careless or unfortunate to make a bad investment and lose that money. This article is for people who decide to invest that fund in cryptocurrencies.

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Crypto markets are volatile

It is very important to understand more about crypto markets before investing. Not just a new investor but someone who has been trying to hold their crypto as a retirement fund should also know and understand that crypto markets are volatile. The value you see today may not be the same tomorrow and there is always a risk that we might end up losing our money if we do a bad trade.

Risk of the market going into a bear trend

I invested in Bitcoin during my starting days and when I invested in Bitcoin someone mentioned that XRP and Litecoin was also a good investment to make. I did invest in them too. But after that several years have passed and multiple bull markets happened and the investment has not even reached the invested value. I'm still very confident and I'm going to be waiting till the next bull run. The point is that the markets can go into a bear trend and may not recover back. There is a huge risk here.

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Challenging in cashing out when there is a need

There will always be a time when we would like to cash out our funds. It will not be possible to cash out anytime. Some investments inside the crypto world might have a locking period and some investments might be in the wrong position to cash out. We want to release the funds and get them back but the trend of the market would be bear now and if we take our investment out, we would be in a huge loss. Even if the market is good and we are good to cash out, due to liquidity or other reasons the cash out may not reach us on time. We might end up paying up to 30% tax when we are cashing out our money.

Crypto sitting idle and no proper growth

This is very common in the crypto world and I would bet that even if there is a bull run there is a high possibility that some coins do not recover at all. For example, even in the last bull run, XRP did not have a major boost. I bought XRP when the price was over 2 dollars and have been holding it from the beginning. I have not seen an instance where the market recovered or XRP pumped to reach over 2$. There is both good news and bad news that happened for XRP but till now the price has not improved. Something like this can happen and we have to keep the crypto idle which might gradually even lose its value.

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