Bitcoin Price data by YCharts.
Since the cryptocurrency is relatively new, we don’t have a lot of evidence to support how Bitcoin will perform decades into the future. However, there’s a treasure trove of data about the historical performance of the stock market — and at no point in the S&P 500 index’s history, would you have lost money on a 20-year investment.
Should you invest retirement money in Bitcoin?
The question here isn’t, “Should you invest in Bitcoin?” The question is, “Should you invest retirement money in Bitcoin?” If you have a high risk tolerance, Bitcoin may very well make sense as an investment. But it isn’t a good retirement investment.
You don’t want to stake everything in a single investment, be it an individual stock, a cryptocurrency, or any other asset. Having a diversified portfolio is one of the best ways to protect your nest egg. That’s why index funds are a good choice for retirement savings.
The danger of putting all your retirement money in a highly volatile asset like Bitcoin is that the timing of your retirement doesn’t always happen according to plan. Many workers have to retire earlier than they planned due to health problems or job losses, or they need to care for a spouse or parent. If you’d need to start withdrawing money after an extreme drop, the damage to your finances could be long-lasting.