At a glance:
Like most things with a rising price tag, cryptocurrencies have garnered global recognition and interest for their sudden increase in value. And it’s not just Wall Street that’s paying attention—from experienced investors to individuals just beginning their investment journey, many are wondering, Are cryptocurrencies something I should look into?
A cryptocurrency is a digital asset stored on blockchain technology that serves as a type of currency or store of value. Unlike traditional currencies, cryptocurrencies aren’t backed by major governments or developed economies. This decentralization means that blockchain technology validates these digital transactions without oversight or intermediaries. While cryptocurrencies are generally meant to serve as a medium of exchange, much of the attention they receive is as a financial investment.
It’s hard to talk about cryptocurrencies without acknowledging the savvy technology behind it. Cryptocurrencies are stored and transferred on an online ledger known as blockchain, which is distributed on a peer-to-peer network. These ledgers are public and once transactions are recorded, they can’t be changed. Blockchain technology offers key benefits such as accuracy, transparency, and speed.
The surging value of various cryptocurrencies—such as Bitcoin, Dogecoin, and the like—can make it tempting to invest, but consider these risks before purchasing a digital currency:
Since cryptocurrencies are highly speculative in their current state, Vanguard believes their long-term investment case is weak. As many of our investors know, our investing philosophy encourages staying the course and tuning out the noise. Our time-tested principles emphasize that investing for the long-term is essential and reacting to short-term trends can be costly for one’s portfolio. While we don’t currently offer cryptocurrencies as an investment option, we acknowledge the impact they’re making in the investing world. As cryptocurrencies and blockchain become increasingly mainstream, we’ll continue to monitor their development and discern the best path forward for our investors.
All investing is subject to risk, including the possible loss of the money you invest.