Investing in Bitcoin (BTC -0.36%) and other cryptocurrencies isn't right for everyone, but if you've decided that it should be part of your investment strategy, there's a right and wrong way to go about it. In this Fool Live video, recorded on June 16, contributor and certified financial planner Matt Frankel discusses some important points Bitcoin investors should keep in mind. 

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Matt Frankel: Mike V says, what is the best way to invest in Bitcoin? Everyone at the Fool always thinks I'm the Bitcoin guy, especially my editors, are always assigning the Bitcoin stuff to write. I agree with Bill Mann when he said the other day that he's a Bitcoin conscientious objector. I think I'm in that camp in terms of actually investing in it, but that's neither here nor there. Look up the Reddit boards bashing my Bitcoin comments and you'll see what I'm talking about. But if you want to invest in Bitcoin, I'm not here to tell you that it doesn't have investment merits or things like that. There are a couple of steps I would take to make sure you're doing it the right way. One is to use a reputable U.S.-based exchange that take steps to protect their investors money. On The Ascent, we've done a bunch of cryptocurrency broker reviews, think of like a Coinbase (COIN -0.39%) or a Gemini. Those not only keep most of their clients' Bitcoin offline, so it's not hackable at all, but they actually maintain insurance so that even if your money does get stolen, whatever is in your Bitcoin wallet, that it would be made whole. They also keep FDIC insurance because they're U.S.-based, they keep partnership agreements with U.S. banks. They keep any cash balance in those accounts are FDIC insured. That's step one, is make sure you're using a reputable U.S.-based exchange to protect yourself, and some of the apps aren't great because like for Robinhood, for example, I believe you can't actually withdraw your Bitcoin to anywhere else. You can just buy it and sell it through the app, you're essentially betting on the price of Bitcoin, not buying it for any utilitarian purpose.

That's No. 1that I would say, and No. 2, we actually had a Bitcoin day on Fool Live a few months ago, I think Bro probably remembers that. Even most of our experts, even the most bullish Bitcoin people that we interviewed said, "It's a great place to put 1%-2% or so of your assets if that's what you want to do." I would say limit your position size. If it turns out that all of the Bitcoin bulls are right and Bitcoin goes to $1 million, 1%-2% of your assets will be enough for it to make it a game-changing amount of money. Then if they are wrong, and it goes the other direction, because that could happen just as easily, you're only risking 1%-2% of your net worth. I would do those two things, use a U.S.-based exchange and keep your position size to a reasonable amount and you have my blessing.