Is crypto worth it?
Crypto is the question everyone wants to ask because it is all over social media which drives a FOMO anxiety. Crypto doesn’t provide a guaranteed return or a reliable income stream, it is a high-risk, highly volatile asset where returns are driven by speculation. Crypto is often the first thing young people buy when they think about investing. My view is that it is the last thing they should contemplate when building their investment portfolio.
For the vast majority of young adults in the UK, crypto is not a route to wealth. It is a high-volatility speculative asset class dominated by a small number of large holders, with meaningful chances of losing most or all of what you put in.
That does not mean it is always wrong to own any crypto. It means that a sensible position is, at most, a small percentage of money you can fully afford to lose, inside a portfolio that is otherwise diversified (even though that may appear to be more boring). Anything bigger is gambling, not investing.
Crypto is not illegal, it is not universally a scam, and there are people who have made a lot of money from it. There are also many more people who lost a lot, and many who are quietly nursing losses they do not talk about. The people loudest on social media are almost always the first group, which distorts the picture enormously.
The mechanics are worth understanding. Most crypto assets have no underlying cash flows — they pay no dividend, generate no rent, produce no earnings. Their price is entirely driven by what the next buyer is willing to pay. That is fundamentally different to owning a share of a company, which generates actual profits, or property, which generates actual rent. It is closer to owning a collectable.
The regulatory picture matters too. Crypto in the UK is only lightly regulated compared to traditional investments. If the exchange you use goes bust, your protection is far weaker than if a bank or broker went bust. Several exchanges have gone bust in the last five years. This is the part the ads do not show you.
If you still want exposure, the sensible version looks like this: only money you can afford to lose entirely, no more than 5% of your total investable money, only on a major exchange, never with borrowed money, never because a friend or influencer told you it was about to moon. And the other 95% is in index funds inside an ISA, doing the quiet work.
What you can actually do this week
- If you are currently holding more than 5% of your savings in crypto, take an honest look at whether that still makes sense.
- If you have never bought crypto and feel like you are missing out, read a single critical article on crypto (not a promotional one) before you buy anything. “Missing out” has cost many more people money than “being left out”.
- Open a Stocks and Shares ISA if you have not already. The argument for crypto as “the only way young people can build wealth” collapses the moment you understand what a global index fund does over thirty years.