The dramatic rise of bitcoin, surpassing $100,000, has ignited a fiery debate in financial circles. While some urge caution, others insist it’s still an opportune moment to invest in the digital currency space.
Among millennials, the allure of cryptocurrency is undeniable. “Everybody knows someone who’s become a crypto millionaire,” said Craig J. Ferrantino, president of Craig James Financial Services in Melville, New York, in an interview earlier this year. For older generations, however, the concept of digital currency remains largely unfamiliar.
Cryptocurrency, defined as digital money operating outside government or central bank control, relies on blockchain technology to track transactions. Bitcoin, the most recognized cryptocurrency, has been the face of this decentralized financial frontier.
Historically, accessing cryptocurrencies required navigating complex crypto exchanges—an intimidating hurdle for beginners. However, the landscape changed in early 2024 when federal regulators approved bitcoin exchange-traded funds (ETFs), allowing Americans to trade bitcoin as easily as stocks.
“It is not too late to start investing in cryptocurrencies,” said Caleb Silver, editor-in-chief of Investopedia. However, he cautioned, “All cryptocurrencies, including bitcoin, are highly volatile, unregulated, and widely misunderstood.”
This sentiment was echoed by Bernd Schmid, a contributing crypto analyst at The Motley Fool. He likened today’s crypto adoption to the early days of internet adoption in the 1990s. “It’s not too late to start investing in crypto,” he said, “as long as you have a long-term perspective.”
But not everyone is optimistic. Bryan Armour of Morningstar Research Services highlighted the speculative nature of crypto investments, warning, “Crypto remains a speculative investment with high volatility. There’s no need for someone to invest in it if they are uncomfortable with that.”
Jonathan Swanburg, a certified financial planner, expressed even greater skepticism. “If you didn’t like crypto at $20,000, why would you possibly like it at $100,000?” he questioned, pointing to the phenomenon of FOMO—fear of missing out.
President-elect Donald Trump’s promise to make the U.S. the “crypto capital of the planet” has also fueled bitcoin’s price surge. Experts remain divided over the long-term impact of his administration’s policies, including the appointment of David Sacks as the nation’s first crypto czar and Paul Atkins as SEC chair.
For those considering entering the crypto market, Silver advised caution. “Don’t invest more than you can afford to lose,” he said. He suggested limiting crypto investments to 5% of a portfolio, emphasizing the sector’s inherent risks and volatility. Armour agreed, warning that over-investing in bitcoin could destabilize a portfolio.
For newcomers, ETFs offer a safer route. “ETFs track bitcoin prices without requiring direct ownership of digital coins,” Silver explained, recommending funds like iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund for their low costs and easy tradeability.
While the debate rages on, one truth remains clear: cryptocurrency is as polarizing as it is revolutionary. As Swanburg quipped, “Invest as much as you would be comfortable investing in a Beanie Baby collection, back in 1998.”
Cryptocurrency may be the future of finance, but for now, it’s a high-stakes game requiring both prudence and perspective.
