Virtual currency value soars, but risky

At this point, it seems like everyone from the most serious of investors to the dabblers has a cryptocurrency story to share. It’s tempting to jump in, especially when you hear “to the moon!” — a favorite slang term in the bitcoin world, referring to rising cryptocurrency prices — thrown about so readily.

But should you invest? As with anything else, the answer is to risk what you can afford. Crypto, like any other market, has its ups and downs.

First, a brief primer: Cryptocurrency is a digital currency. In other words, it’s just another form of money. But this one is based on lines of computer code — each coin is based on a single line of code. There’s no bank or government, so people trade them among one another, digging into their digital wallets to do so.

Oh, and there are now thousands of types of crypto. Bitcoin, created in 2009, is the first and most well-known.

Some things to consider if you’re looking at investing in crypto:

* It’s a volatile commodity. This isn’t a negative, just a reflection of where things stand. Fortune likened its status to gold in the 1970s, when gold was severed formally from the monetary system and went through a “price discovery” phase.

* Beware the bubble. Bitcoin’s value has increased 500 percent in less than a year … but what does that mean? Nothing more than to proceed with caution.

* Carbon footprint. Crypto was in the news recently for the computing power it requires to “mine” for virtual coins. New crypto has since cropped up with promises of being more climate-friendly, while existing currencies are describing how much renewable energy they use. The topic will likely stick around in this market.

* Crypto is not considered a good retirement investment. Because it is so new and volatile, most advisors recommend against treating crypto as a retirement investment. Handle it like you would any other riskier investment.