“Here’s the thing: Donald Trump has nothing to do with this cryptocurrency. Even though it’s named after him, he’s not involved in it, and he doesn’t make any money from it. The people behind it are the ones making money when the price of the coin goes up, but Trump himself hasn’t earned anything from it,” ChatGPT said.

While ChatGPT is adamant that Trump had nothing to do with the coin and made no profit, the truth is hard to say. Some news sources claim the entire project to be a scandal, but no charges have been filed.

ChatGPT said: “The value of cryptocurrencies, including TRUMP, is super sensitive to what’s happening in the world economy. If people are feeling good about money and want to take risks, the price of crypto can go up. But if people are scared about losing money, the price can drop.

Things like inflation, interest rates, or government decisions can affect how much people are willing to pay for TRUMP or other cryptocurrencies. When the economy is doing well, people might feel more comfortable buying coins. But when things are shaky, they might sell and make the price drop.”

ChatGPT is correct about the connection between the economy and cryptocurrencies. For example, look at what happened during COVID-19. The U.S. government issued stimulus checks to citizens in an attempt to boost the economy. This led to many new buyers taking a risk with the “free” money they’d received and trying out cryptocurrency. The government issued three rounds of stimulus checks between March 2020 and March 2021. For Bitcoin, on Feb. 29, 2020, its price opened at $8,671.21. And on April 1, 2021, after all stimulus checks were out, Bitcoin’s price opened at $58,926.56.

For its final answer, ChatGPT responded with, “Here’s the important part: Cryptocurrencies are risky. Just like if you were to invest in stocks or other things, the price of TRUMP can change very quickly, and sometimes it can drop a lot. There’s also the fact that TRUMP is not as popular or well-known as big cryptocurrencies like Bitcoin, so it could be even riskier.

If you’re thinking about investing in TRUMP, ask yourself:

• Do I understand what I’m investing in?

• Can I handle it if the price goes down?

• Is it just a fun thing, or do I think it will be worth more in the future?

It might not be the best idea to put all your money into something like TRUMP, especially if you don’t know much about cryptocurrencies. But if you’re just having fun with a small amount, that’s okay — just don’t expect it to be a guaranteed way to make money.”

Remember, investing in cryptocurrency or meme coins is especially risky. If you’re not sure whether it’s a good idea, speak with a finance professional before making any investments.

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This article originally appeared on GOBankingRates.com: I Asked ChatGPT To Explain TRUMP Crypto to Me Like I’m 12: Here’s What It Said

The Government Accountability Office warns that crypto assets have often been characterized as high-risk, high-reward, experiencing both record highs and devastating crashes. Retirees depending on their portfolios for living expenses cannot afford the dramatic swings that could eliminate years of savings in weeks. The volatility that creates opportunity also threatens financial security.

Financial experts recommend extreme caution with crypto in retirement portfolios. As reported by TIME, the Department of Labor has stated that cryptocurrencies “present significant risks and challenges” to future retirees, and that employers offering such plans “should expect to be questioned.”

Even when crypto is available in retirement accounts, allocation recommendations remain conservative. Kiplinger notes that while some experts now recommend crypto for diversification, buyer beware remains the watchword.

These cautious positions suggest professionals view crypto as unsuitable for significant retirement holdings.

The regulatory environment surrounding cryptocurrency remains fluid and unpredictable. Government actions can dramatically impact crypto values overnight, from taxation changes to outright bans. The Department of Labor has issued guidance warning that crypto assets are highly speculative and volatile, are difficult to assess and value, have custody issues, and face an uncertain regulatory environment. Retirees need stability, not assets subject to regulatory whiplash.

Charles Schwab points out a significant tax disadvantage: if the cryptocurrency you hold in a traditional 401(k) or IRA appreciates, those gains will be subject to ordinary income taxes upon withdrawal — whereas crypto held in a taxable account for longer than a year would be subject to the more favorable long-term capital gains rates. This means retirees could pay 10-15% more in taxes on crypto gains compared to holding the same assets in taxable accounts.

Cryptocurrency requires technical knowledge that many retirees lack. Private key management, wallet security, and exchange risks create additional layers of complexity beyond traditional investments. Exchange failures, hacking incidents and lost access credentials have cost investors billions. Retirees who struggle with digital technology face heightened risks of permanent loss through technical errors.

The cryptocurrency decision for retirees ultimately depends on individual circumstances, risk tolerance, and financial goals. According to Kiplinger, crypto may be coming to more 401(k) plans, making this decision increasingly relevant for retirement savers. Those considering crypto should evaluate several key factors:

Financial Stability: Only retirees with solid emergency funds and secure income streams should consider crypto exposure. Essential living expenses should never depend on volatile investments.

Risk Tolerance: Retirees comfortable with potentially losing their entire crypto investment might allocate 1-5% of their portfolio to digital assets. Those requiring stability should avoid crypto entirely.

Technical Competence: Successful crypto investing requires ongoing education and technical skills. Retirees uncomfortable with digital wallets and security protocols should reconsider.

Time Horizon: Retirees with 10-20+ year time horizons might weather crypto volatility better than those needing immediate income stability.

Given cryptocurrency’s complexity and risks, retirees considering crypto investment should consult qualified financial advisors with digital asset experience. The decision involves not just investment analysis but tax planning, estate considerations, and overall retirement security.

The crypto question for retirees isn’t black and white. While digital assets offer compelling diversification and growth potential, they also present risks that could jeopardize retirement security. The key lies in understanding both sides and making informed decisions aligned with individual financial situations and goals.

For most retirees, the prudent approach involves either avoiding crypto entirely or limiting exposure to amounts they can afford to lose completely. The promise of cryptocurrency gains must be weighed against the paramount importance of retirement financial security.

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