Crypto’s risk isn’t in investing, but in staying out

Back in 2010, my college boyfriend had encouraged me to mine bitcoin, but I thought the idea of digital currency was silly, so I never bought in. I was vaguely aware of the cryptocoin’s price in the years that followed, but I paid little attention to it.

Fast forward to 2017. I had a degree in finance and had started a business teaching people how to invest in the stock market. Bitcoin was making headlines and still I hadn’t bought into the idea that crypto was the future of money. But I wasn’t going to completely dismiss it the way I had seven years earlier.

So I bought bitcoin and Ether, and then loaded up on Dogecoin. In the months that followed, I bought and “bred” CryptoKitties (digital cats that lived on the Ethereum blockchain), added a handful of altcoins to my wallet, and set up a small monthly recurring purchase of bitcoin on a cryptocurrency exchange platform.

My daughter was six months old at the time and I dressed her in a onesie that said, “My College Fund Is In Bitcoin.” I still wasn’t taking any of it seriously, but I was having fun.

When the crypto bubble popped in early 2018, my investments crashed with it – I had come around to the potential of cryptocurrency just as the masses had given up on it.

But now that I was a believer, it meant I was a HODLer, too. HODL stands for Hold On for Dear Life, and refers to maintaining your position in a cryptocurrency through volatility or a major decrease in price. As a HODLer, I didn’t make any withdrawals from my cryptocurrency portfolios when the crash happened.

Instead, I tucked my private keys somewhere safe and kept up my piddly $15 a month recurring purchase of bitcoin. I rationalized that even if the crypto market never recovered, I wouldn’t be out any noticeable sum, and if it did, I’d be grateful I kept investing. I was right.

When I opened my digital wallets again in 2020, my initial investments amounting to a few hundred dollars had ballooned to five figures. A year after that I was trying to bargain with mortgage brokers to be able to use cryptocurrency for a down payment on a home (spoiler: they said no). The asset I had originally invested in as a joke now made up a measurable portion of my net worth, and I believed in it more than ever.

My own experience makes it impossible to ignore how investing and finance is changing. I’ve been hearing about cryptocurrency for 12 years, which is how long I’ve been investing in the traditional stock market. I can’t think of cryptocurrency as anything “new,” or a fad that’s going to go away.

Buying my favourite cryptocurrency coin, Ether, doesn’t feel any different to me than buying exchange-traded funds. All of my money is earned, spent and traded digitally.

I frequently see older generations of financial advisers dismissing cryptocurrency and non-fungible tokens (NFTs) as a fad or bubble, but they are missing an opportunity to capture young investors who insist on having these assets in their portfolio.

The only thing that determines whether an asset has value is what people are willing to pay for it. And crypto is here to stay.

Gen Z have been living in the metaverse since before it was called that, and they see no meaningful difference in purchasing digital assets such as NFTs with cryptocurrency versus buying physical goods with fiat money. And why should they? Their entire financial world has always been digital.

I now maintain my portfolio with a 90/10 split into traditional investments and blockchain assets. Cryptocurrency ETFs traded on the Toronto Stock Exchange have made it easy to take a position in cryptocurrency using the brokerage account I already have, and to tax-shelter it in my tax-free savings account and registered retirement savings plan.

I also invest directly in bitcoin and Ether, on a weekly basis, using a Canadian cryptocurrency exchange app.

While I still maintain the bulk of my wealth in traditional assets such as stocks, ETFs and real estate, my highest rates of return have come from my digital assets. I now wouldn’t consider my portfolio properly diversified without them. The financial markets are always changing. The risk isn’t in investing in them, it’s in staying out.

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