Financial Insights That Matter
Investors are facing a number of challenges right now. Tariffs, sticky inflation and uncertainty regarding monetary policy are rattling the stock market. On top of that, the crypto market has also felt the pressure, as digital asset prices have struggled to keep up with the momentum they had earlier this year.
In this kind of economic environment, investors may be wondering how to adjust their strategy and if they should add digital assets to their portfolios. Bankrate’s First-Quarter 2025 Market Mavens Survey asked experts if there is a place in individual investors’ portfolios for crypto. Their answer: Nope. Generally speaking, experts agreed that there isn’t a need for crypto in most investors’ portfolios.
For context, cryptocurrency prices have been fluctuating recently. Optimism in the crypto industry following the reelection of President Donald Trump sent crypto prices soaring from November to January.
Trump’s executive order creating the Strategic Bitcoin Reserve in March gave crypto prices another boost, but not for long. The excitement waned when it was announced that the reserve would only hold bitcoins that were forfeited as part of criminal investigations. Investors had been expecting more than just repurposed, forfeited assets.
This recent wild ride is just one of the reasons experts advise steering clear of crypto.
“Cryptocurrency is a complicated asset for individual investors’ portfolios as [it] doesn’t generate income and is highly volatile,” says Dec Mullarkey, managing director, investment strategy and asset allocation at SLC Management. “The swings in value can be dramatic, which makes it more of a speculative asset. If an investor wants to include it in their portfolio, they should limit its size or appreciate that it could materially negate the performance of more traditional asset classes.”
This article is one in a series discussing the results of Bankrate’s First-Quarter 2025 Market Mavens Survey.
It helps to understand why crypto prices can rise and fall so quickly. Cryptocurrencies generally don’t have intrinsic value, like many other assets, including stocks, do. This means crypto prices are solely based on what others are willing to pay for a coin, leaving the asset susceptible to dramatic price swings.
#1a73e8;">Boost Your Financial Knowledge and Achieve Stability
Discover a growing online community dedicated to delivering financial news, tips, and strategies designed to help you manage money effectively, save smarter, and grow your investments with confidence.
#1a73e8;">Top Financial Tips for Saving and Investing
- Personal Finance Management: Master the art of budgeting, expense tracking, and building a strong financial foundation.
- Investment Opportunities: Stay updated on market trends, learn about stocks, and explore secure ways to grow your wealth.
- Expert Money-Saving Advice: Access proven techniques to reduce expenses and maximize your financial potential.