Four questions every crypto investor needs to consider

Whether you buy into one of the new spot Bitcoin ETFs or open an account with a cryptocurrency exchange,crypto investing is not for everyone. As with any investment, you need to take time to research and learn about what you're buying. Here are a
few things to ask.

1. Do you understand the risk?

We've already touched on some of the risks involved in crypto, such as volatility and questions about its long-term potential. Another is that there are limited investor protections. Unlike money in a bank account which is covered by FDIC insurance against bank failure, if your crypto platform fails, you could lose everything.

One way you can mitigate this is to put your crypto into a crypto wallet that you control. Just be aware that if you lose your security information, you might lock yourself out of your wallet forever.

2. How will you cope if you lose your crypto investments?

Losing money is always difficult. But it is more manageable if you only invest money you can afford to lose. Some people lost their life savings when Terra's Luna cryptocurrency collapsed.

If you want to buy crypto, make sure it is only a small part of a wider portfolio. That way, if the crypto market does crash again, it won't derail your retirement plans or leave you unable to pay your rent or mortgage.

3. Are you comfortable with the regulatory environment?

Cryptocurrency is a relatively new and unregulated market. The SEC is pursuing cases against several top crypto exchanges because it believes many cryptocurrencies are trading as unregulated securities.The outcome of these cases -- alongside broader moves to introduce stricter crypto regulation -- could change the way people buy and sell crypto in the U.S.

4. Why are you buying cryptocurrency?

Many people bought cryptocurrency in 2021 because they were scared of missing out, only to get burned when prices crashed. Don't buy Bitcoin because other people are or because you think you might get rich quickly. History has already shown us that crypto prices can rise and drop