Is It Smart To Receive Your Salary In Cryptocurrency?
Is it smart to receive salary in cryptocurrency? Opinions vary, but much depends on how much of your salary is paid in cryptocurrency, the state of the market, and other variables. To begin this discussion, let’s examine two things the federal government of the United States advises consumers about where cryptocurrency goes.
The Nature of Cryptocurrency
The Federal Trade Commission official site reminds us, “Cryptocurrencies are not insured by the government like U.S. bank deposits are. This means that cryptocurrency stored online does not have the same protections as money in a bank account.” That fact alone warns a lot of people off having their salary paid in cryptocurrencies such as Bitcoin or Ethereum.
The risks associated with choosing to receive your salary in cryptocurrency include losing your funds if your crypto wallet gets hacked, compromised, if you lose your digital keys, etc. You have no recourse to get your money back if there is a technical issue with your digital wallet or other issues.
The other problem with getting your paycheck in cryptocurrency? As the FTC reports, “A cryptocurrency’s value can change by the hour. An investment that may be worth thousands of U.S. dollars today might be worth only hundreds tomorrow. If the value goes down, there’s no guarantee that it will go up again.” So again, it’s not smart to receive your salary in cryptocurrency when there’s so much potential volatility in the value of the funds you are paid in.
Is It Smart To Receive Salary In Cryptocurrency?
If you are being offered the chance to get SOME of your salary in cryptocurrency, that would be an entirely different proposition than getting ALL of your salary in crypto. You must view getting paid in cryptocurrency as an investment and we all know that all investments carry some form of risk.
You have to evaluate your ability to financially withstand the loss of your salary paid in crypto and choose accordingly. It’s not wise to gamble with money you need to survive and cryptocurrency can be a sophisticated form of gambling depending on circumstances. Don’t take the risk if you cannot afford to lose the money. It really is as simple as that. You should not expect anything less than a total loss in the event your cryptocurrency account is compromised, hacked, looted, you lose your access to a digital wallet, etc.
If you are a regular buyer of Bitcoin or other digital currency, you may wish to consider having only that amount paid to you in cryptocurrency as a convenience–money you were going to convert to digital currency anyway. But putting your entire paycheck into it? A bad risk when you can’t purchase groceries or gasoline using cryptocurrency. You should never tie up all your available cash in any single investment–ask any financial planner to learn why that is a bad idea.