Cryptocurrency has grown increasingly mainstream as more and more investors add digital coins to their portfolios. If you have the appetite for crypto, you may be contemplating the idea of investing in it for your retirement. And if so, you wouldn't be alone.

Almost 44% of U.S. adults who have begun saving for retirement say they've invested part of their nest egg in cryptocurrency, as per a recent FinanceBuzz survey. Furthermore, almost half of those who say they've invested in cryptocurrency for retirement have confirmed that digital coins comprise a large chunk of their portfolios.

Bitcoin logo on graphic screen

Image source: Getty Images.

Now to be fair, that survey was conducted among 1,000 adults, so it's hardly representative of the U.S. population on a whole. But it is interesting to see such a large percentage of respondents who are banking on cryptocurrency for the long haul.

Still, the question remains. Is cryptocurrency a smart retirement investment? Or are you better off putting your long-term savings elsewhere?

It's a matter of risk

During your working years, it's a good idea to invest aggressively for retirement so you can grow your money into a larger sum. Then, as retirement nears, it's a good idea to shift toward safer investments in your portfolio.

Now when we talk about investing aggressively, we generally mean taking on more risk in your nest egg. For many savers, that means loading up on stocks or stock-focused index funds. But it could also include cryptocurrency.

That said, as risky as stocks may be, cryptocurrency can be even more volatile. Worse yet, we don't know what the future holds for crypto.

If regulations come down the pike that bar the use of digital coins as a payment option, it could wipe out the value of cryptocurrency. That's a risk you may not want to take with your retirement savings.

In fact, as a general rule, it pays to adopt a buy and hold strategy for retirement, where you acquire quality stocks or other assets and hold them for many years, thereby allowing them to gain value. Cryptocurrency doesn't necessarily fit into that strategy.

Many people who buy crypto do it on more of a short-term basis. And since digital coins haven't been around that long, it's hard to say whether it's a wise idea to buy them now in the hopes of still hanging onto them 30 years down the line.

Does this mean that you shouldn't invest your retirement savings in cryptocurrency? No. But should you invest a lot of your nest egg in digital currencies? Probably not.

Cryptocurrency is still fairly speculative, and so a safer bet may be to keep a smaller portion of your nest egg in digital coins. Of course, the way you allocate your retirement assets will ultimately depend on your personal tolerance for risk. And to be clear, there's no universal "correct" mix you should aim for. But what you should do is make sure you understand the risks associated with cryptocurrency before banking on it heavily to fund your senior years.