As cryptocurrencies gain mainstream acceptance, the recent $27 million bitcoin investment by Australian financial giant AMP marks a potential turning point for the digital asset class. This bold move underscores a growing institutional interest in cryptocurrency, raising questions about whether individual investors should follow suit.
Bitcoin, the largest cryptocurrency with a $2.7 trillion market capitalization, has demonstrated remarkable volatility over the years. From 2020 to 2022, its value skyrocketed by 650% before plummeting 75%. The current bullish cycle, which began in early 2023, has seen bitcoin rise more than 500%. Yet, market analysts suggest that this upward trend might be nearing its peak as early investors begin to take profits, potentially limiting further gains.
Justin Arzadon, head of digital assets at Betashares, remains optimistic about bitcoin’s future. Betashares manages the $200 million Crypto Innovators ETF (ASX: CRYP), which focuses on companies in the digital asset ecosystem.
“Looking ahead to 2025, there is a lot to be positive about when it comes to bitcoin and digital assets more broadly,” says Arzadon. “The incoming Trump administration has made some supportive statements in terms of a more permissive regulatory approach to the asset class, while the US Federal Reserve will potentially continue to cut policy rates. These two factors will be supportive of the prices of bitcoin but also the broader range of listed companies that service the digital assets ecosystem. Moreover, as maturity continues to improve, the bad old days of crypto being like the wild west are increasingly behind us as traditional finance and regulators clean up the space.”
While enthusiasts envision cryptocurrency as a revolutionary financial technology poised to replace traditional banking systems, skeptics argue that its value remains speculative, rooted solely in what investors are willing to pay.
For individual investors considering cryptocurrency, Arzadon offers a measured perspective: “It’s very important that investors do not look at this asset class as a get-rich-quick scheme. Many investors with a trading mindset towards the asset class have had their hands burned by attempts to time the market.”
Instead, Arzadon recommends treating cryptocurrency as a small allocation within a diversified portfolio’s alternatives bucket, a strategy increasingly adopted by sophisticated high-net-worth individuals and institutional investors like AMP.
Navigating the Crypto Landscape
For those ready to explore cryptocurrency in 2025, several pathways exist. Investors can purchase digital coins through crypto exchanges, though caution is advised when selecting a platform due to the evolving regulatory landscape. Many experienced investors also use “cold storage wallets” to safeguard their holdings offline, reducing the risk of cyber theft.
A straightforward entry point is investing in bitcoin exchange-traded funds (ETFs) available on the ASX, such as DigitalX (ASX: BTXX) or VanEck (ASX: VBTC), which mirror bitcoin’s performance for a modest annual management fee.
Alternatively, investors can consider companies integral to the cryptocurrency ecosystem, like Nasdaq-listed Microstrategy or Riot Platforms, a major crypto mining operator. Diversified ETFs, such as Betashares Crypto Innovators ETF and Global X Fintech and Blockchain ETF, also provide exposure to this burgeoning sector.
Cryptocurrency remains one of the most polarizing investment opportunities, with its future oscillating between promises of a digital financial revolution and fears of a speculative bubble akin to the Dutch tulip mania. For investors, the key lies in rigorous research and a balanced understanding of its risks and rewards before incorporating it into their portfolios.
As the debate continues, AMP’s entry into the crypto market reflects an undeniable shift: digital assets are steadily carving their place in the mainstream financial landscape.
