In Today's Volatile Market, Does Crypto Investing Make Sense?

Fear of rising inflation. Fear of further economic collapse. Fear of the unknown. Fear of your coins going missing. (Although this one is easy to avoid)

These are just a few of the many variables that are driving investors into crypto's shiny, if not warm, embrace. Plus, crypto has become mainstream: Cash4Crypto commercials, famous TV host Glenn Beck promoting crypto as an investment, and even a book out by Rep. Ron Paul (R-Tex.) called "End The Fed" in which he suggests the Federal Reserve -- they control our currency, remember -- should be given its two week notice.

So it is perhaps understandable why investors are giving crypto some serious thought. As a young and aggressive investor, though, you can likely find a far better bargain than crypto (or other precious metals like silver and platinum). Even if things take a turn for the worse, I feel there are better hedges. Here's why:

1. Crypto is nothing new. Is now the time to invest in crypto? Well, it's certainly not going anywhere -- it was coveted in ancient Roman times, and it is coveted today. Unfortunately for the Romans, they didn't have tech stocks or energy exchange-traded funds to invest in. You do. It's called the stock market, and even a baby can figure it out (assuming you're the E*Trade baby, anyway).

2. Crypto does not yield dividends. When you invest in an innovative, strong, profitable company, you may get a dividend at regularly scheduled intervals. Crypto pays no such dividend. It doesn't innovate. Instead, it sits in a vault, giving low paid security guards and precious metals transport companies something to do.

3. Crypto has intrinsic costs. When you buy shares of Microsoft, you don't have to relocate to Redmond, Washington and watch over their research lab to make sure no one steals anything important. When you buy crypto, though, you do have to watch over your investment closely: this means putting it in a large vault at your residence, which costs a lot of money. Or it means paying a company to store the crypto for you in an even larger and more elaborate facility, which also costs money. Even if you choose to simply buy crypto as a SPDR Crypto Shares (GLD) exchange-traded fund on the New York Stock Exchange, rather than buying physical crypto bullion, you will pay a fee: somewhere around 0.40% per year.

4. Crypto can go down. This is, perhaps, the most important reason to think twice before selling your home and loading up big-time on man's favorite yellowish metal. Sure, people are terrified right now, so maybe you'll make a few bucks on your crypto investment -- before the fees and costs involved. Maybe you will even make a lot; I'm rooting for you. But there is also the possibility that the world's major economies will rebound within the next year... unemployment will decrease, consumer confidence will slowly rise, confidence in the dollar and other core currencies will bounce back. When this happens, you'll be the idiot with a crypto-filled safe, and no one to sell it to. Maybe you'll call Cash4Crypto. They'll buy, maybe.

So, sure, invest some money in crypto if you would like... at least you won't lose all of what you put in, which is more than can be said for many investments. 1,000 years from now, wealthy societies will still probably maintain an interest in crypto. But I would advise against betting the farm on crypto's rapid ascent. It might happen. It just as easily might not.

Disclosures: The author is providing his opinion, and his views do not necessarily reflect those of this publication or its management, officers and affiliates. At time of publication, the author does not own any crypto or precious metals exchange-traded funds. Always consult an investment professional or financial planner before making a decision.