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[ Tech Is social media over?](https://theweek.com/tech/is-social-media-peak-over-reddit-meta-x "Is social media over?") 1. [Home](https://theweek.com/) 2. [Personal Finance](https://theweek.com/personal-finance) [pros and cons](https://theweek.com/pros-and-cons) # The pros and cons of investing in crypto A passing fad or an enduring investment opportunity?  By [Becca Stanek, The Week US](https://theweek.com/author/becca-stanek) last updated March 31, 2025  (Image credit: Illustration by Marian Femenias Moratinos / Getty Images) Share - Copy link - [Facebook](https://www.facebook.com/sharer/sharer.php?u=https%3A%2F%2Ftheweek.com%2Fpersonal-finance%2Fcryptocurrency-investing-pros-cons) - [X](https://twitter.com/intent/tweet?text=The+pros+and+cons+of+investing+in+crypto+&url=https%3A%2F%2Ftheweek.com%2Fpersonal-finance%2Fcryptocurrency-investing-pros-cons) - [Linkedin](https://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Ftheweek.com%2Fpersonal-finance%2Fcryptocurrency-investing-pros-cons&title=The+pros+and+cons+of+investing+in+crypto+&source=theweek.com) - [Whatsapp](whatsapp://send?text=The+pros+and+cons+of+investing+in+crypto++https%3A%2F%2Ftheweek.com%2Fpersonal-finance%2Fcryptocurrency-investing-pros-cons?fwa) - [Pinterest](https://pinterest.com/pin/create/button/?url=https%3A%2F%2Ftheweek.com%2Fpersonal-finance%2Fcryptocurrency-investing-pros-cons&media=https%3A%2F%2Fcdn.mos.cms.futurecdn.net%2FAzzKFtQbsgYuxQRpPtsSX4.jpg) Share this article Join the conversation [Follow us](https://google.com/preferences/source?q=theweek.com) Add us as a preferred source on Google Newsletter Sign up for Today's Best Articles in your inbox A free daily email with the biggest news stories of the day – and the best features from TheWeek.com *** By signing up, you agree to our [Terms of services](https:\/\/futureplc.com\/terms-conditions\/) and acknowledge that you have read our [Privacy Notice](https:\/\/futureplc.com\/privacy-policy\/). You also agree to receive marketing emails from us that may include promotions from our trusted partners and sponsors, which you can unsubscribe from at any time. You are now subscribed Your newsletter sign-up was successful *** An account already exists for this email address, please log in. Subscribe to our newsletter From [bitcoin](https://theweek.com/tag/bitcoin) and ethereum to tether and dogecoin, there are a wide variety of cryptocurrencies to choose from. For many who have opted in, crypto has yielded impressive returns. However, for others, it has led to devastating losses, not to mention encounters with scams and fraud in the industry. So is this buzzy digital currency worth adding to your investment portfolio, or is it better to steer clear? We lay out the pros and the cons to help you decide. ## What exactly is cryptocurrency? [Cryptocurrency](https://theweek.com/tag/cryptocurrency) "is a digital currency, such as [bitcoin](https://theweek.com/business/economy/donald-trumps-bitcoin-obsession), that is used as an alternative payment method or speculative investment," meaning an investor hopes to profit from a change in value when they go to sell, said [NerdWallet](https://www.nerdwallet.com/article/investing/cryptocurrency). Article continues below You may like - [ Gambling on everything](https://theweek.com/tech/gambling-on-everything) - [ How prediction markets have spread to politics](https://theweek.com/business/markets/prediction-markets-politics-gambling) - [ What is Donald Trump's net worth?](https://theweek.com/politics/donald-trump-net-worth) ## The Week Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives. [SUBSCRIBE & SAVE](https://subscribe.theweek.com/servlet/OrdersGateway?cds_mag_code=TWE&cds_page_id=275740&cds_response_key=I4BRBKSW1&utm_medium=referral&utm_source=theweek.com&utm_campaign=wku-all-digital_referral-202401-sub-none-fbk24&utm_content=us-in-article)  ## Sign up for The Week's Free Newsletters From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox. From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox. [Sign up](https://theweek.com/newsletters) Latest Videos From The Week Typically, "cryptocurrencies exist on decentralized networks using blockchain technology — a distributed ledger enforced by a disparate network of computers" — and "are generally not issued by [any central authority,](https://theweek.com/business/bitcoin-founder-satoshi-nakamoto)" said [Investopedia](https://www.investopedia.com/terms/c/cryptocurrency.asp#toc-what-is-cryptocurrency). ## What are the upsides of investing in crypto? Depending on the type of investor you are and your tolerance for risk, crypto can offer upsides as an investment, including: **It is a decentralized currency.** For many, a major upside of crypto is that it is a "decentralized currency, meaning it's not regulated by a single government or central bank," said [Credit Karma](https://creditkarma.myi4.net/c/221109/628437/10161?subId1=theweek-us-7969539975822255447&sharedId=theweek-us&u=https%3A%2F%2Fwww.creditkarma.com%2Finvestments%2Fi%2Fpros-and-cons-of-bitcoin). In other words, "governments can't control \[crypto\] like they can with centralized fiat currency such as the U.S. dollar." **It offers diversification.** One potential benefit of crypto for your portfolio is that owning some "can increase your portfolio's diversification since cryptocurrencies such as bitcoin have historically shown few price correlations with the U.S. stock market," said [The Motley Fool](https://go.redirectingat.com/?id=92X1679923&xcust=theweek_us_1304770771761720906&xs=1&url=https%3A%2F%2Fwww.fool.com%2Finvesting%2Fstock-market%2Fmarket-sectors%2Ffinancials%2Fcryptocurrency-stocks%2Fis-cryptocurrency-good-investment%2F%23toc_risks-of-investing-in-cryptocurrency&sref=https%3A%2F%2Ftheweek.com). Diversification is key when investing, as it spreads your portfolio across a number of different types of assets, buffering against market volatility. Sign up for Today's Best Articles in your inbox A free daily email with the biggest news stories of the day – and the best features from TheWeek.com By signing up, you agree to our [Terms of services](https:\/\/futureplc.com\/terms-conditions\/) and acknowledge that you have read our [Privacy Notice](https:\/\/futureplc.com\/privacy-policy\/). You also agree to receive marketing emails from us that may include promotions from our trusted partners and sponsors, which you can unsubscribe from at any time. **It may provide sizable returns.** Though it is far from guaranteed this will happen, "several cryptocurrencies have seen their prices skyrocket since first being introduced," said [Bankrate](https://www.bankrate.com/investing/where-trump-and-harris-stand-on-crypto/?sub-id=theweek-us-6502373489535676437). This translates to "the potential for large gains on your [investment](https://theweek.com/personal-finance/avoid-emotional-investing)." Plus, since "the sector is quite new," there are "potentially many more changes that may come down the line to make investing in cryptocurrencies even more attractive," said [Corporate Finance Institute](https://go.redirectingat.com/?id=92X1679923&xcust=theweek_us_2877280835914557450&xs=1&url=https%3A%2F%2Fcorporatefinanceinstitute.com%2Fresources%2Fcryptocurrency%2Fis-cryptocurrency-a-good-investment%2F&sref=https%3A%2F%2Ftheweek.com), a financial education website. ##### [Penny-pinching: Elon Musk looks at the cent to cut costs](https://theweek.com/business/economy/elon-musk-penny-DOGE-cost-cutting) [Why is Trump's cryptocurrency reserve plan putting some economists on edge?](https://theweek.com/politics/trump-crypto-reserve-stockpile-economists) [The collapse of El Salvador's bitcoin dream](https://theweek.com/business/economy/el-salvador-bitcoin-cryptocurrency-collapse) **It is accessible.** Another benefit of crypto is that it "can be easily accessible to everyone around the clock, even those without access to traditional banking," whether due to a checkered banking history, lack of documentation or lack of proximity to bank branches, said [Fidelity](https://www.fidelity.com/learning-center/trading-investing/crypto/risks-and-benefits-of-crypto). Further, "crypto transactions can have lower fees and faster transfer times than some traditional bank transactions." One caveat: If you lose your password to your digital wallet, there is no recovery process like for other financial products and accounts. Instead, "if you lose your password, you lose access to your bitcoin (and other cryptocurrencies stored in it)," said [AARP](https://go.redirectingat.com/?id=92X1679923&xcust=theweek_us_9150515957390398568&xs=1&url=https%3A%2F%2Fwww.aarp.org%2Fmoney%2Fpersonal-finance%2Fthings-to-know-about-bitcoin%2F&sref=https%3A%2F%2Ftheweek.com). ## Are there risks or drawbacks to crypto? While past tales of people making bank on crypto may seem tempting, it is important to heavily weigh the downsides of this investment as well: What to read next - [ What are the best investments for beginners?](https://theweek.com/personal-finance/best-investments-for-beginners) - [ The pros and cons of social media](https://theweek.com/news/media/960639/the-pros-and-cons-of-social-media) - [ The pros and cons of tapping your 401(k) for a down payment](https://theweek.com/personal-finance/pros-cons-tapping-401k-for-down-payment) **It is extremely volatile.** While risk of loss is possible with any type of investment," crypto's [elevated volatility](https://theweek.com/tech/2023-crypto-instability) makes it an even bigger risk factor," said [Forbes](https://www.forbes.com/advisor/investing/cryptocurrency/should-you-invest-in-crypto/). As just one example, "Bitcoin has experienced rapid surges and crashes in its value, climbing to nearly \$65,000 in November 2021 before dropping to just over \$20,000 a year and a half later," said Investopedia. Further, said Bankrate, since cryptocurrencies "aren't backed by anything," that means "the price they trade at is determined by the whims of traders." **It is susceptible to hacks and scams.** Fraud and [hacks](https://theweek.com/tech/data-breaches-increase-2023-internet-security-concerns) are both common with crypto. That is because "though cryptocurrency blockchains are highly secure, off-chain crypto-related key storage repositories, such as exchanges and wallets, can be hacked," said Investopedia. In the past, many exchanges and wallets have been hacked, "sometimes resulting in the theft of millions of dollars in coins." Further, there are "websites that look like opportunities for investing in or mining cryptocurrencies, but are bogus," which can deceive less experienced investors, said [Charles Schwab](https://www.schwab.com/learn/story/cryptocurrencies-what-are-they). **It lacks government regulation.** While some may see it as an upside that crypto is largely unregulated, that can bring downsides as well. "Governments around the world have not yet fully reckoned with how to handle cryptocurrency, so regulatory changes and crackdowns have the potential to affect the market in unpredictable ways," said NerdWallet. Leaving crypto unregulated also puts "investors at risk of market manipulation and fraud," said [The Wall Street Journal](https://www.wsj.com/articles/lack-of-crypto-audit-regulation-raises-questions-about-pcaob-authority-a558754). **It has a major environmental impact.** Crypto is often made [through mining](https://theweek.com/cryptocurrency/1018718/the-environmental-cost-of-crypto), which "involves solving complex mathematical problems to verify transactions and create new blocks in the blockchain," said Credit Karma. This "requires lots of computational power, which in turn requires a large amount of energy." In fact, according to "a comparison by the University of Cambridge," said NerdWallet, "worldwide bitcoin mining consumes more than twice as much power as all U.S. residential lighting." That said, not all types of crypto have the same level of carbon intensity, and "many crypto mining companies are using renewable sources of power and have committed to carbon offsetting," said [Morgan Stanley](https://www.morganstanley.com/ideas/esg-cryptocurrency-pros-cons). Explore More [Cryptocurrency](https://theweek.com/tag/cryptocurrency) [Bitcoin](https://theweek.com/tag/bitcoin)  [Becca Stanek, The Week US](https://theweek.com/author/becca-stanek) Social Links Navigation Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She previously served as a deputy editor and later a managing editor overseeing investing and savings content at LendingTree and as an editor at the financial startup SmartAsset, where she focused on retirement- and financial-adviser-related content. Before that, Becca was a staff writer at The Week, primarily contributing to Speed Reads. Read more [ Tech Gambling on everything](https://theweek.com/tech/gambling-on-everything "Gambling on everything") [ Markets How prediction markets have spread to politics](https://theweek.com/business/markets/prediction-markets-politics-gambling "How prediction markets have spread to politics") [ Politics What is Donald Trump's net worth?](https://theweek.com/politics/donald-trump-net-worth "What is Donald Trump's net worth?") [ Personal Finance What are the best investments for beginners?](https://theweek.com/personal-finance/best-investments-for-beginners "What are the best investments for beginners? ") Latest in Personal Finance [ Personal Finance Will your tax refund actually be bigger this season?](https://theweek.com/personal-finance/irs-tax-refund-one-big-beautiful-bill "Will your tax refund actually be bigger this season? 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") [ Personal Finance The pros and cons of having more than one credit card](https://theweek.com/personal-finance/multiple-credit-cards-pros-cons "The pros and cons of having more than one credit card ") - [About Us](https://theweek.com/about-us) - [Contact Future's experts](https://futureplc.com/contact/) - [Terms and Conditions](https://futureplc.com/terms-conditions/) - [Privacy Policy](https://futureplc.com/privacy-policy/) - [Cookie Policy](https://futureplc.com/cookies-policy/) - [Advertise With Us](https://go.future-advertising.com/The-Week-Media-Kit.html) - [FAQ](https://theweek.com/faq) - [Do not sell or share my personal information](https://theweek.com/privacy-portal) [ Add as a preferred source on Google](https://google.com/preferences/source?q=theweek.com) The Week is part of Future US Inc, an international media group and leading digital publisher. [Visit our corporate site](https://futureplc.com/). © Future US, Inc. 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From [bitcoin](https://theweek.com/tag/bitcoin) and ethereum to tether and dogecoin, there are a wide variety of cryptocurrencies to choose from. For many who have opted in, crypto has yielded impressive returns. However, for others, it has led to devastating losses, not to mention encounters with scams and fraud in the industry. So is this buzzy digital currency worth adding to your investment portfolio, or is it better to steer clear? We lay out the pros and the cons to help you decide. ## What exactly is cryptocurrency? [Cryptocurrency](https://theweek.com/tag/cryptocurrency) "is a digital currency, such as [bitcoin](https://theweek.com/business/economy/donald-trumps-bitcoin-obsession), that is used as an alternative payment method or speculative investment," meaning an investor hopes to profit from a change in value when they go to sell, said [NerdWallet](https://www.nerdwallet.com/article/investing/cryptocurrency). Article continues below ## The Week Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives. [SUBSCRIBE & SAVE](https://subscribe.theweek.com/servlet/OrdersGateway?cds_mag_code=TWE&cds_page_id=275740&cds_response_key=I4BRBKSW1&utm_medium=referral&utm_source=theweek.com&utm_campaign=wku-all-digital_referral-202401-sub-none-fbk24&utm_content=us-in-article) ## Sign up for The Week's Free Newsletters From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox. From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox. Latest Videos From The Week Typically, "cryptocurrencies exist on decentralized networks using blockchain technology — a distributed ledger enforced by a disparate network of computers" — and "are generally not issued by [any central authority,](https://theweek.com/business/bitcoin-founder-satoshi-nakamoto)" said [Investopedia](https://www.investopedia.com/terms/c/cryptocurrency.asp#toc-what-is-cryptocurrency). ## What are the upsides of investing in crypto? Depending on the type of investor you are and your tolerance for risk, crypto can offer upsides as an investment, including: **It is a decentralized currency.** For many, a major upside of crypto is that it is a "decentralized currency, meaning it's not regulated by a single government or central bank," said [Credit Karma](https://creditkarma.myi4.net/c/221109/628437/10161?subId1=theweek-us-7969539975822255447&sharedId=theweek-us&u=https%3A%2F%2Fwww.creditkarma.com%2Finvestments%2Fi%2Fpros-and-cons-of-bitcoin). In other words, "governments can't control \[crypto\] like they can with centralized fiat currency such as the U.S. dollar." **It offers diversification.** One potential benefit of crypto for your portfolio is that owning some "can increase your portfolio's diversification since cryptocurrencies such as bitcoin have historically shown few price correlations with the U.S. stock market," said [The Motley Fool](https://go.redirectingat.com/?id=92X1679923&xcust=theweek_us_1304770771761720906&xs=1&url=https%3A%2F%2Fwww.fool.com%2Finvesting%2Fstock-market%2Fmarket-sectors%2Ffinancials%2Fcryptocurrency-stocks%2Fis-cryptocurrency-good-investment%2F%23toc_risks-of-investing-in-cryptocurrency&sref=https%3A%2F%2Ftheweek.com). Diversification is key when investing, as it spreads your portfolio across a number of different types of assets, buffering against market volatility. A free daily email with the biggest news stories of the day – and the best features from TheWeek.com **It may provide sizable returns.** Though it is far from guaranteed this will happen, "several cryptocurrencies have seen their prices skyrocket since first being introduced," said [Bankrate](https://www.bankrate.com/investing/where-trump-and-harris-stand-on-crypto/?sub-id=theweek-us-6502373489535676437). This translates to "the potential for large gains on your [investment](https://theweek.com/personal-finance/avoid-emotional-investing)." Plus, since "the sector is quite new," there are "potentially many more changes that may come down the line to make investing in cryptocurrencies even more attractive," said [Corporate Finance Institute](https://go.redirectingat.com/?id=92X1679923&xcust=theweek_us_2877280835914557450&xs=1&url=https%3A%2F%2Fcorporatefinanceinstitute.com%2Fresources%2Fcryptocurrency%2Fis-cryptocurrency-a-good-investment%2F&sref=https%3A%2F%2Ftheweek.com), a financial education website. **It is accessible.** Another benefit of crypto is that it "can be easily accessible to everyone around the clock, even those without access to traditional banking," whether due to a checkered banking history, lack of documentation or lack of proximity to bank branches, said [Fidelity](https://www.fidelity.com/learning-center/trading-investing/crypto/risks-and-benefits-of-crypto). Further, "crypto transactions can have lower fees and faster transfer times than some traditional bank transactions." One caveat: If you lose your password to your digital wallet, there is no recovery process like for other financial products and accounts. Instead, "if you lose your password, you lose access to your bitcoin (and other cryptocurrencies stored in it)," said [AARP](https://go.redirectingat.com/?id=92X1679923&xcust=theweek_us_9150515957390398568&xs=1&url=https%3A%2F%2Fwww.aarp.org%2Fmoney%2Fpersonal-finance%2Fthings-to-know-about-bitcoin%2F&sref=https%3A%2F%2Ftheweek.com). ## Are there risks or drawbacks to crypto? While past tales of people making bank on crypto may seem tempting, it is important to heavily weigh the downsides of this investment as well: **It is extremely volatile.** While risk of loss is possible with any type of investment," crypto's [elevated volatility](https://theweek.com/tech/2023-crypto-instability) makes it an even bigger risk factor," said [Forbes](https://www.forbes.com/advisor/investing/cryptocurrency/should-you-invest-in-crypto/). As just one example, "Bitcoin has experienced rapid surges and crashes in its value, climbing to nearly \$65,000 in November 2021 before dropping to just over \$20,000 a year and a half later," said Investopedia. Further, said Bankrate, since cryptocurrencies "aren't backed by anything," that means "the price they trade at is determined by the whims of traders." **It is susceptible to hacks and scams.** Fraud and [hacks](https://theweek.com/tech/data-breaches-increase-2023-internet-security-concerns) are both common with crypto. That is because "though cryptocurrency blockchains are highly secure, off-chain crypto-related key storage repositories, such as exchanges and wallets, can be hacked," said Investopedia. In the past, many exchanges and wallets have been hacked, "sometimes resulting in the theft of millions of dollars in coins." Further, there are "websites that look like opportunities for investing in or mining cryptocurrencies, but are bogus," which can deceive less experienced investors, said [Charles Schwab](https://www.schwab.com/learn/story/cryptocurrencies-what-are-they). **It lacks government regulation.** While some may see it as an upside that crypto is largely unregulated, that can bring downsides as well. "Governments around the world have not yet fully reckoned with how to handle cryptocurrency, so regulatory changes and crackdowns have the potential to affect the market in unpredictable ways," said NerdWallet. Leaving crypto unregulated also puts "investors at risk of market manipulation and fraud," said [The Wall Street Journal](https://www.wsj.com/articles/lack-of-crypto-audit-regulation-raises-questions-about-pcaob-authority-a558754). **It has a major environmental impact.** Crypto is often made [through mining](https://theweek.com/cryptocurrency/1018718/the-environmental-cost-of-crypto), which "involves solving complex mathematical problems to verify transactions and create new blocks in the blockchain," said Credit Karma. This "requires lots of computational power, which in turn requires a large amount of energy." In fact, according to "a comparison by the University of Cambridge," said NerdWallet, "worldwide bitcoin mining consumes more than twice as much power as all U.S. residential lighting." That said, not all types of crypto have the same level of carbon intensity, and "many crypto mining companies are using renewable sources of power and have committed to carbon offsetting," said [Morgan Stanley](https://www.morganstanley.com/ideas/esg-cryptocurrency-pros-cons).