Bitcoin's Volatility Raises Concerns About Retirement Investments

Bitcoin's recent price fluctuations have sparked debate about its suitability as a long-term investment option. While some argue that it offers high returns, others point out its inherent volatility, which can result in significant losses for investors.

A study by the Government Accountability Office found that five popular cryptocurrencies available to 401(k) plans were four to 12 times more volatile than the S&P 500 index. This means that cryptocurrency prices can swing by 5-10% or more on a single day, which is significantly higher than traditional investments.

Additionally, the lack of regulatory protection and potential for crypto fraud and theft add to the risks associated with investing in cryptocurrencies. The FBI reported a record $9.3 billion in losses due to crypto-related scams in 2024, with most victims being over 60 years old.