I have a friend who suggested I cash out my 401k, take the penalty, and put it into XRP. He thinks it's going to $10,000 by 2030. It has more than doubled since he mentioned this a little over a week ago ($0.50 to $1.10). I wouldn't consider cashing out my 401k but I'd consider throwing some money into Crypto. I haven't before. I was never comfortable with the volatility. I'm an index fund investor but I have "expendable" money now and I'm getting tempted.

Looking for thoughts on this.

Just never know, I could have bought $10k of bitcoin when it first came out or FCX (copper) when it was $3.50 a share. Never did because I was skeptical. I guess you could say I regret it, It was a gamble I should have took, but didn't feel right then.
There is no real answer to your question, from me anyway, only because of the "too good to be true theory".

An old Army buddy some years back was buying up Bitcoin hand over fist when it was in the hundreds. I told him he was nuts. He got out at $56,000.

It's your money.

There are hundreds/thousands of cryptocurrencies out there, and Bitcoin's success story is the exception, not the norm. (And there are plenty of folks who lost money over the years on Bitcoin too.) Sure, there are some big winners out there, as there are in every casino. But for every "I should have invested more in Bitcoin" there are hundreds/thousands of "I'm glad I didn't bother investing in XYZcoin" or "I should have never bothered putting any money into XYZcoin."

Unlike traditional true investments like stocks/index funds, cryptocurrency is 100% speculation, based not on any underlying solid business fundamentals, financial value, metrics, or market performance, and totally on what people think/hope it might be worth in the future. Therefore it's nothing more than gambling.


Now, there's nothing necessarily wrong with gambling, if you can afford it. If you have some expendable money laying around as you state and want to toss some of it into XRP purely as a gamble, then sure. Same as sticking it in a slot machine.

But would you be comfortable cashing out your 401k and taking it to Vegas to gamble with? Certainly not. Even if there are folks saying "I went to Vegas and I won $$$!" or "I feel pretty sure that if you gamble at this table, you'll win!"

Doubly so if it means taking an extra tax penalty hit, which is a further guaranteed loss in exchange for a slim chance at a long shot gain with crypto/Vegas.

quote:

Originally posted by Keystoner:
I have a friend who suggested I cash out my 401k, take the penalty, and put it into XRP. He thinks it's going to $10,000 by 2030. It has more than doubled since he mentioned this a little over a week ago ($0.50 to $1.10). I wouldn't consider cashing out my 401k but I'd consider throwing some money into Crypto. I haven't before. I was never comfortable with the volatility. I'm an index fund investor but I have "expendable" money now and I'm getting tempted.

Looking for thoughts on this.

You can do just as well taking it all to Vegas and putting it on red or black. Crypto is a gamble, anyone that says they have it figured out is lying. People key in on the ones that have done well and get crypto fever (getting rich quickly usually sounds good to everyone).

I would expect that those who actually do well are a very small percentage compared to those who do not do well.

I’d ask him to give you some factual data that backs up his assertion. Chances are that if you dig through it, none will be factual, but all assumption.

Be sure temptation does not sway common sense. If you do get it, set your high and low sell prices now, stick to it and separate emotion from sound decisions when you are gaining and losing large amounts. Don’t forget to figure in the taxes on all those winnings.

Don't gamble with what you arent comfortable losing. I wouldn't cash out a 401k but instead decide on an amount that if you lose the investment, you are okay.

^^^ THIS

At most, take some "expendable" money and invest that. Let's say you buy $1k and it goes from $1.10 to:

$10,0000. That would mean your $1k became $9.09 million. You'd still have your 401k too.

$0. That would mean your $1k became $0. You'd still have your 401k.

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Ego is the anesthesia that deadens the pain of stupidity

DISCLAIMER: These are the author's own personal views and do not represent the views of the author's employer.

He thinks it is going to 10,000? That would put it's market cap at almost 600 trillion dollars in 6 years which is more than TEN times the current value of all the SP500 companies combined or twenty times the GDP of the USA for 2024.

https://www.forbes.com/advisor...rp-price-prediction/

Incredible highs, steep falls, and long periods of steady decline mark XRP’s journey so far.

The project launched its token in 2013 but saw little significant price action until the bull run of 2017. However, after this period, listings on popular exchanges became pivotal to the coin’s considerable price rises.

“The history of XRP cryptocurrency listings begins in 2018, a pivotal year for Ripple (the company behind XRP),” Drozdz tells Forbes Advisor. Ripple’s launch of the xRapid product was a defining moment, ushering in a new era where XRP cryptocurrency aimed to revolutionise money transfer, including within the banking system. The response from the market was phenomenal.

“Within a very short time, the price of XRP skyrocketed by as much as 1820%,” Drozdz says. From a humble $US0.2, XRP soared to $US3.84, an all-time high that naturally thrilled investors. However, as Drozdz notes, this jubilation was short-lived. “The cryptocurrency then fell by 93% in a matter of months, leaving a stark reminder of the volatile nature of the crypto world.”

But XRP wasn’t finished. In 2021, as the entire cryptocurrency market was caught in a bull market frenzy, XRP again provided significant returns to investors who got in at the right time. “Within six months, the cryptocurrency had increased by an impressive 710% to $US1.96,” Drozdz recounts. Yet the following period was a steady downward trend, as XRP’s value gradually declined to $US0.3.

This message has been edited. Last edited by: grumpy1,

Ceo of ripple was on Fox business Friday. He’s all in. Crypto could do very very well in a DJT admin if they don’t regulate it.
Same with AI

In the early mid 90’s US and. EU economies were basically same size. bill Clinton signed an EO to not monkey with regulating the internet in its infancy and EU didn’t. Well fast forward 30 years and US economy is 1.5x the EU. Amazing what happens when .gov does not muck it up

I was in BTC sub 3k. Only a couple hundred dollars. A few nice dinners worth. I’m up but it’s not life changing amount. I do know people that went in with 10k at that level. Do I wish I had put my life savings in ? Well hindsight is 20/20.

Only invest what you can see go to 0

Crypto is pure speculation with zero underlying assets. It is not investing because there is not productive value. The people that invested early in the original scheme by Ponzi made out well if they got out early enough.

Bitcoin has a finite number of coins that can ever exist. The supply cannot expand to meet demand. The only reason it goes up in value is because the next guy wants some.

Three ways to know you are gambling:

1. Trying to pick winners and losers
2. Trying to time the market
3. Chasing historical returns.

Crypto is full of pirate ships sailing in shark infested waters. It is really easy to get scammed and have your crypto stolen. I had my phone sim swapped twice, my email account hacked within two minutes and my coinbase cypto account hacked all within two minutes. Thankfully I did not have any coins in the account at the time. There's no recourse if you get your crypto stolen, you'll never see it again.

I do believe in XRP and bought a bunch of it 5 years ago at .45 cents, and a bunch more at .11 cents. I got tired of crypto day trading and the scams and put most of it in crypto related stocks that are more secure and those have done well. I would not put more than 5% of your assets in crypto.