While watching the Super Bowl, you probably saw some interesting advertisements by cryptocurrency companies like FTX, eToro and Crypto.com, among others, touting crypto to the masses.
Coinbase, for example, aired a 60-second commercial featuring a bouncing QR code.>Do your research
It's important to truly understand bitcoin, cryptocurrency or any asset prior to investing.
″'Educate before allocate' is a phrase that me and my friends are using," Douglas Boneparth, certified financial planner and president of Bone Fide Wealth, previously told CNBC Make It. Boneparth has invested in bitcoin since 2014.
Cryptocurrencies like bitcoin are decentralized, which means they aren't controlled by>Understand the risks
There are many different risks when it comes to investing in cryptocurrency.
Tech risk, for example, is important to consider. Smart contracts, or collections of code that carry out a set of instructions>Only spend what you can afford to lose
Again, experts warn to only invest in cryptocurrency what you can afford to lose.
"Bitcoin and other cryptocurrencies are highly volatile so the swings that occur are pretty typical of this asset class," Anjali Jariwala, certified financial planner, certified public accountant and founder of Fit Advisors, previously said.
There's even a possibility of losing your entire investment, she said. So, investors should first allocate funds to their "required buckets," like an emergency or retirement fund, before buying into a riskier asset class like cryptocurrency.
Boneparth agreed: "Be very careful about how much you allocate and understanding what you can tolerate, because if 80% of your net worth is tied to bitcoin, and it goes down 30%, that's rough."
