Why Is Cryptocurrency a Good Investment?

Investing in crypto has become increasingly popular at a rate faster than mobile phone and internet adoption. The long and short? Yes, it’s absolutely a good investment option. And we’ll get into why in this article. We also recommend you get a good understanding of crypto risk and security and further explore the 10 reasons why you should invest in cryptocurrency.

Why is cryptocurrency a good investment?

Crypto offers several advantages that make it an attractive investment option, particularly for those considering it as a long-term investment. The question of whether crypto is a good investment for long-term revolves around understanding the technology value proposition the same way you would evaluate the businesses for stock investing: its potential for high returns and its role as a hedge against inflation.

Most people get hung up on the volatility narrative, but all assets and all markets have volatility. Bitcoin specifically has yielded 230% annualized returns since 2011 dwarfing the returns of all other assets over the same time period. Crypto also offers self-custody of assets from the decentralized nature of public blockchains. Remember 2008.

Key Takeaway

Not all blockchains are the same. You must start by understanding the elements of Bitcoin so you can compare and contrast it with all other blockchains and their native crypto assets you’re considering. It a simple case of understanding what you’re investing in.

Why is the crypto market doing well?

The crypto market is performing well due to several factors. If you’re wondering what is going on with crypto today, the answer lies in its growing adoption and technological advancements. In 2025, blockchain technology is expected to gain more massive adoption, with tokenized real-world assets (RWA), DeFi, and stablecoins playing significant roles. The increasing institutional interest in crypto assets, coupled with regulatory advancements, is also driving market growth.

Is your money safe in crypto?

While crypto has unique risks like smart contract bugs and other hacks, you are your own worst enemy. Every investment has risk, and your job is to evaluate the risk and figure out how much risk you want to take. Your money is as safe as you make it because the ethos of crypto is self-custody. You are 100% responsible for your money being safe in crypto although you can choose to be less responsible (the same as using banks). Using secure wallets, enabling two-factor authentication, and storing your assets in cold storage can significantly reduce the risk of loss.

Do you actually make money with crypto?

Yes, you can actually make money with crypto, either through long-term investments or active trading strategies like day trading and swing trading. There are also more advanced money-making strategies and more ways to make money than in traditional finance (TradFi). Explore how crypto makes you money.

The key to success often lies in understanding market trends, diversifying your portfolio, and managing risk effectively. While crypto's volatility can lead to significant gains, it also poses substantial risks, so it's important to invest only what you can afford to lose. Established cryptocurrencies like Bitcoin and Ethereum are generally considered safer bets for long-term investments, while newer altcoins may offer higher potential returns but with increased risk.

How to get started investing in crypto

For beginners, investing in cryptocurrency can seem daunting, but it's relatively straightforward. Here are the basic steps:

1. Choose a cryptocurrency exchange. Select a reputable platform that offers a wide range of cryptocurrencies.
2. Decide on a cryptocurrency to invest in. Start with well-known options like Bitcoin or Ethereum, which are generally more stable and considered among the best cryptocurrencies for beginners.
3. Create a secure wallet. Use a cold wallet for long-term storage to protect your assets from hacking.
4. Make your first purchase. Start small and consider dollar-cost averaging to manage volatility.
5. Stay informed. Keep up with market news and trends to make informed decisions.

Best cryptocurrency for beginners?

For beginners looking to enter the cryptocurrency market, several options stand out as particularly suitable. Bitcoin (BTC) and Ethereum (ETH) are often recommended due to their stability and widespread recognition, making them easier to understand and invest in. 

For those with a smaller budget, Shiba Inu (SHIB) and Dogecoin (DOGE) are popular choices because of their low entry prices and strong community support. Additionally, Cardano (ADA) is noted for its stable growth and strong potential in DeFi and smart contracts, while Stellar (XLM) offers fast and low-cost transactions, making it ideal for cross-border payments. These cryptocurrencies provide a good balance of accessibility and potential for growth, making them excellent starting points for new investors. Get more advice for crypto beginners.

Whether you're a seasoned investor or just starting out, the key to success lies in staying informed so you can make informed decisions.

As always, your goal is to get a Crypto Bullseye™.

Yours in crypto,

Kirk David Phillips, CPA, CMA, CFE, CBP