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Why Investing in a CD Could Be a Better Move than Holding onto Bitcoin

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“Unlock the power of compound interest and secure your financial future by cashing in your bitcoin for a high-yield CD – a timeless investment that guarantees steady growth and protection against market volatility.”

You’ve likely heard of bitcoin and other cryptocurrencies. You may have even been enticed to buy some with hopes of striking it rich. Why not try to get in before the next spike? That move, however, could be a dangerous one. The truth is that bitcoin and other cryptocurrencies are highly speculative assets with several significant hurdles to any real-world utility. Rather than throwing money into an emerging technology that may or may not be worth anything 10 years from now, you may be better with a CD to lock in today’s impressive returns.

The Federal Reserve has raised the target federal funds rate more than 10 times since early 2022. As a result, CDs are offering better returns than investors have seen in years. However, that’s not the only reason you may want to ditch cryptocurrency and dive into a CD.

CDs are stable while bitcoin is volatile

Bitcoin and other cryptocurrencies are highly volatile investments, meaning these assets see sporadic and unpredictable swings in value. When more people buy bitcoin, the price of the cryptocurrency rises and when more people sell it, the price falls. The problem here is that nearly any news can cause significant swings in either direction.

On the other hand, CDs are stable investments with predictable returns. When you purchase a CD, you’re not purchasing some high-risk asset hoping you’ll make money in the long run. Instead, you know the exact return the CD is going to generate when you buy it. That’s because when you purchase one, you lock in whatever rate CDs might be paying on that day. That’s good news in today’s high interest rate environment.

CDs are a more straightforward investment

It’s important to form a detailed understanding of anything you invest in. That may be difficult when it comes to cryptocurrencies like bitcoin because they’re complex technologies in an emerging market. The world likely doesn’t even know about some of the challenges bitcoin may face if it is ever used as a mainstream currency.

On the other hand, CDs are a more straightforward, easy-to-understand investment option. Doug Roller, investment advisor representative and owner of Crossroads Financial Group in Fort Wayne, Indiana, says, “CDs are relatively simple and straightforward investments.” He went on to explain that CDs “don’t require much active management or monitoring,” making them easier to manage for the average investor than high-risk investments.

CDs promote better saving habits

CDs are also a great way to improve your saving skills. Roller says, “CDs promote disciplined saving habits, as they often have penalties for early withdrawal.” That’s good news because early withdrawal penalties can “discourage impulsive spending and help you stick to your savings goals.” Rather than promoting sound spending habits, bitcoin can require a riskier approach.

If you purchased bitcoin, you probably did so based on stories you’ve read, watched or heard about people who have made millions investing in cryptocurrencies. Your hope is that bitcoin or any other cryptocurrency you invested in makes another run for the top, turning a few thousand dollars into a few million. While that may or may not be possible, the returns on a CD are definitive, promoting better saving habits and less risky investor behavior.

Don’t accept the risk. Lock in today’s impressive CD interest rates now.

The bottom line

If you want to try your chances with bitcoin, do so cautiously. On the other hand, if you want to make real returns on your idle cash without having to worry about volatility, security, or other concerns, dive into CDs. Get started here today.

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