Is Cryptocurrency a Good Investment?

Investing in virtual currency has produced jaw-dropping returns for some, but total loss for others.

By Anders Bylund – Updated Sep 4, 2025 at 6:21 PM EST | Fact-checked by Parker Hicks

Key Points

Cryptocurrency investing offers high risk and high reward, demanding thorough research.
Exposure to crypto can be direct via currencies or indirect through related company stocks.
Diversifying with crypto could potentially enhance portfolio performance long-term.

It is possible to make a lot of money by investing in cryptocurrency -- but it is also very possible to lose all of your invested money. Investing in crypto assets is risky, but it can be a good investment if you do it properly and as part of a diversified portfolio. Let's explore if cryptocurrency is a good investment.

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Cryptocurrency

Cryptocurrency is decentralized and secure digital money, based on blockchain technology, that offers new investment opportunities.

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CRYPTO: BTC

Bitcoin

Today's Change

(-4.58%) $-3397.78

Current Price

$70844.00

Key Data Points

Market Cap

$1.4T

Day's Range

$70663.00 - $74271.00

52wk Range

$60255.56 - $126079.89

Volume

47B

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As the most widely known cryptocurrency, Bitcoin benefits from the network effect -- more people want to own Bitcoin because Bitcoin is owned by the most people. Bitcoin is currently viewed by many investors as "digital gold."

Bitcoin investors believe the cryptocurrency will gain value over the long term because its supply is fixed, unlike that of fiat currencies such as the U.S. dollar or the Japanese yen. The supply of Bitcoin is capped at fewer than 21 million coins; most currencies can be printed at the will of central bankers.

Many investors expect Bitcoin to gain value as fiat currencies depreciate. After the fourth halving event in April 2024, Bitcoin's inflation rate is slower than the annual supply-side increase of physical gold on the global market. People who are bullish about Bitcoin being extensively used as digital cash believe it has the potential to become the first truly global currency.

Ethereum as a long-term investment

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CRYPTO: ETH

Ethereum

Today's Change

(-5.89%) $-137.12

Current Price

$2192.47

Key Data Points

Market Cap

$265B

Day's Range

$2168.50 - $2332.42

52wk Range

$1398.62 - $4946.05

Volume

25B

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Ether is the native coin of the Ethereum platform and can be purchased by investors who want to gain portfolio exposure to Ethereum. While Bitcoin can be viewed as digital gold, Ethereum is building a global computing platform that supports many other cryptocurrencies and a massive ecosystem of decentralized applications (dApps).

The large number of cryptocurrencies built on the Ethereum platform and the open-source nature of dApps create opportunities for Ethereum to also benefit from the network effect and to create sustainable, long-term value. The Ethereum platform enables the use of smart contracts, which execute automatically based on terms written directly into the contract code.

The Ethereum network collects Ether from users in exchange for executing smart contracts. Smart contract technology has significant potential to disrupt massive industries, such as real estate and banking, and to create entirely new markets.

As the Ethereum platform becomes increasingly used worldwide, the Ether token increases in utility and value. Investors bullish on the Ethereum platform's long-term potential can profit directly by owning Ether. That's not to say Ethereum doesn't have competition.

A number of "Ethereum Killers," including Solana (SOL -4.44%), Polygon (POL -3.78%), and Avalanche (AVAX -6.06%), are built to handle smart contracts and use a blockchain system capable of processing more transactions per second. The speed has the added advantage of being less expensive for users. But Ethereum is the most broadly adopted platform for using smart contracts.

Expert Q&A

About the Author

Anders Bylund is a contributing Motley Fool media and technology analyst covering semiconductors, cloud computing, internet infrastructure, quantum computing, and streaming media. Previously, Anders was a systems administrator for Nielsen Technology and CSX, gaining hands-on experience with enterprise-class systems. He was also a freelance writer for Ars Technica, TIME, USA Today, CNN, WIRED, and AOL's Daily Finance. He holds a bachelor’s degree in English and a master’s degree in library and information sciences from Florida State University. He believes in coyotes and time as an abstract.

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@TMFZahrim

Anders Bylund has positions in Bitcoin, Ethereum, and Solana. The Motley Fool has positions in and recommends Avalanche, Bitcoin, Ethereum, PayPal, Solana, and Tesla. The Motley Fool recommends CME Group and Coinbase Global and recommends the following options: long January 2027 $42.50 calls on PayPal and short September 2025 $77.50 calls on PayPal. The Motley Fool has a disclosure policy.