Bitcoin officially launched in 2009, and now, 14 years later, more than 15,000 digital currencies make up the cryptocurrency market, according to crypto.com.
But it hasn't exactly been a smooth ride for cryptocurrency investors.
Although the industry was once valued at around $3 trillion, the crypto market lost a little over $2 trillion in value in 2022 in what has been called "crypto winter". Last year, a number of high-profile crypto companies filed for bankruptcy, and FTX, a crypto exchange platform once valued at $32 billion, collapsed.
So far in 2023, bitcoins it has not fully recovered to its previous highs. As of April 25, its price was around $28,000, well below the $68,000 it fetched at its peak in November 2021.
As with any asset, it's important to understand it before you invest your money. Do you think you know your stuff? Test your knowledge with CNBC's Make It's Crypto 101 quiz.
Regardless of how you scored on the quiz, remember that unlike stocks or bonds, virtual currencies don't typically derive their value from an underlying asset. Cryptocurrency can fluctuate or decrease in value erratically, which is why it is considered a highly volatile asset.
Since digital currencies are a relatively new technology and are considered highly speculative assets, financial experts tend to recommend against spending more money on virtual currency than you are willing to lose.
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