Is Cryptocurrency a Good Investment?

Is cryptocurrency a good investment?

Cryptocurrency can be a good investment if you want to gain direct exposure to the demand for digital currency. A safer but potentially less lucrative alternative is to buy the stocks of companies with exposure to cryptocurrency. Between these extremes, some cryptocurrencies are now available as spot-price exchange-traded funds (ETFs).

Is cryptocurrency safe?

Multiple factors show that cryptocurrency is not always a safe investment. Still, other signs are emerging that say cryptocurrency is here to stay. The key thing (like all other investments) is to heavily research the cryptocurrency you plan to purchase.

Risks of investing in cryptocurrency

Cryptocurrency exchanges, more so than stock exchanges, are vulnerable to being hacked and becoming targets of other criminal activity. Security breaches have led to sizable losses for investors who have had their digital currencies stolen, spurring many exchanges and third-party insurers to begin offering protection against hacks.

As of 2025, Thomson Reuters reported that no clear regulations on cryptocurrency exist, and the Securities and Exchange Commission (SEC) and other agencies are trying to use existing federal and state laws to regulate it with mixed results. All of this is to say, there are few protections for investors looking to get into the cryptocurrency market.

Safely storing cryptocurrencies is also more difficult than owning stocks or bonds. Cryptocurrency exchanges such as Coinbase (COIN -3.81%) make it fairly easy to buy and sell crypto assets, such as Bitcoin (BTC -0.33%) and Ethereum (ETH -0.87%). But many people don't like to keep their digital assets on exchanges due to the risks of allowing any company to control access to their assets.

Some cryptocurrency owners prefer offline cold storage options, such as hardware wallets, but cold storage comes with its own challenges. If you lose your private key, it's impossible to access your cryptocurrency.

There's also no guarantee that a crypto project you invest in will succeed. Competition is fierce among thousands of blockchain projects, and many projects are no more than scams. Only a small percentage of cryptocurrency projects will ultimately flourish.

Regulators may also crack down on the entire crypto industry, especially if governments view cryptocurrencies as a threat rather than an innovative technology. For instance, the SEC has filed enforcement lawsuits against many players in the cryptocurrency sector with mixed results.

On the upside, these suits should help Congress and courts hammer out long-term rules and regulations for owning and trading digital assets in the long run. The cutting-edge technology elements of cryptocurrency also increase the risks for investors.

Cryptocurrency adoption

Crypto futures markets are being established, and many companies are gaining direct exposure to the cryptocurrency sector. Professional and individual investors are gradually receiving the tools they need to manage and safeguard their crypto assets. Financial giants, such as Block (NYSE:SQ) and PayPal (PYPL -1.73%), are making it easier to buy and sell cryptocurrency on their popular platforms and other companies are entering the space.

Tesla (TSLA +1.02%) held almost $2 billion of the cryptocurrency in early 2022. The electric vehicle maker sold off most of its crypto holdings later that year, but still owned $1.24 billion in Bitcoin in September 2025.

Strategy (MSTR -4.78%) -- a business intelligence software company -- has been accumulating Bitcoin since 2020. It held $33.1 billion worth of Bitcoin as of September 2025. Chairman Michael Saylor was dubbed by Forbes in 2025, "The Bitcoin Alchemist."

Although other factors still affect the riskiness of cryptocurrency, the increasing pace of adoption is a sign of a maturing industry.

Is crypto a good long-term investment?

Many cryptocurrencies, such as Bitcoin and Ethereum, are launched with lofty objectives that may be achieved over long time horizons. While the success of any cryptocurrency project is not assured, early investors in a crypto project that reaches its goals can be richly rewarded over the long term. However, achieving widespread adoption is necessary for any cryptocurrency project to be considered a long-term success.

Bitcoin as a long-term investment

Should you invest in cryptocurrency?

Owning some cryptocurrency can increase your portfolio's diversification since cryptocurrencies such as Bitcoin have historically shown few price correlations with the U.S. stock market. If you believe cryptocurrency usage will become increasingly widespread over time, it probably makes sense for you to buy some crypto directly as part of a diversified portfolio.

For every cryptocurrency you invest in, be sure to have an investment thesis as to why that currency will stand the test of time. If you do your research and learn as much as possible about how to invest in cryptocurrency, you should be able to manage the investment risk as part of your overall portfolio. If buying cryptocurrency seems too risky, you can consider other ways to potentially profit from the rise of cryptocurrencies.

You can buy the stocks of companies such as Coinbase, Block, or PayPal or invest in an exchange like CME Group (CME -0.83%), which facilitates crypto futures trading. Finally, spot Bitcoin ETFs and Ethereum ETFs are options, with more cryptocurrencies probably entering the ETF space over time.