What’s bitcoin?

Q: What’s bitcoin?

B.P., Cranston, R.I. A: Launched in 2009, bitcoin is the first and most wellknown cryptocurrency. (There were recently more than 12,000 cryptocurrencies. In contrast, there are only around 6,000 stocks listed on the New York Stock Exchange and the Nasdaq.)

A virtual and digital currency, bitcoin is not backed by the U.S. government or any other entity, and no central organization regulates it. Its value is based on what people think it’s worth, and that value has soared over the past decade or so — with much volatility. The price of each token peaked above $67,000 in late 2021 and was recently around $47,100. It’s meant to be used as a currency, but many view it as an investment.

If you’re interested in bitcoin or other cryptocurrencies, read a lot about them, pro and con, as there are more than a few risks. It’s perfectly sensible to just stick with stocks or other conventional investments for long-term wealth building.

Q: Are bank accounts insured?

I.N., Kaysville, Utah A: Most bank accounts are insured by the Federal Deposit Insurance Corp. (FDIC), and credit union accounts by the National Credit Union Administration. The FDIC insures checking, savings, money market accounts and CDs for up to $250,000 per depositor — at each bank, for each account ownership category. Some entities offer more coverage than that, while some don’t offer FDIC protection at all, so make sure your bank is among those covered.

The FDIC does not protect stocks, bonds, mutual funds, crypto assets, safe deposit boxes (and their contents), life insurance policies and annuities, among other things. Learn more at FDIC.gov. And visit SIPC.org to learn about the Securities Investor Protection Corp., which protects most brokerage accounts.