Ask an Advisor: Balancing Risk and Opportunity: Is Crypto Worth a Spot in Your Portfolio?

Ask an Advisor: Balancing Risk and Opportunity: Is Crypto Worth a Spot in Your Portfolio?

If you’ve been working hard, carving out a successful career, and building wealth the old-fashioned way, talk of investing in cryptocurrency probably raises some red flags. The volatility, regulatory uncertainty, and stories of hacked exchanges don’t exactly inspire confidence. But while healthy skepticism is wise, dismissing crypto entirely could mean overlooking a smart opportunity.

Crypto might still feel like a mysterious newcomer, but the reality is that it’s been around for well over a decade now. Tens of thousands of digital currencies exist today, with dozens now valued in the billions of dollars. The markets are maturing, with banks, asset managers, and hedge funds increasingly embracing digital assets and integrating them into their portfolios and operations. It’s transitioning from what many saw as a fringe experiment to a credible asset class, and the change is happening quickly. 

While it may never be the “safe” part of a portfolio, digital assets can play a powerful role in diversification and long-term growth. 

Why Skipping Crypto Could Mean Missing Out

It makes sense to be cautious, but avoiding crypto altogether could put you at a disadvantage. For high-income executives and business owners, crypto can be both a potential hedge against inflation and a way to diversify your portfolio that goes beyond traditional stocks and bonds. 

A modest allocation of 1–2% of your portfolio can provide exposure to the upside while limiting downside risk. However, bear in mind that, despite its volatility, Bitcoin has been one of the best-performing assets of the past decade, experiencing only two down years (2018 and 2022). Because of a capped supply of 21 million coins, Bitcoin offers scarcity and resilience that government-issued currencies cannot match. If you have a higher risk tolerance, a slightly larger allocation may be more appropriate. [1, 2]

Beyond diversification, crypto offers other potential benefits, like access to innovation, decentralized finance, tokenized real assets, and long-term growth opportunities. As the sector evolves, it continues to open new doors for wealth building. With growing regulatory clarity and institutional adoption, cryptocurrency is maturing into a credible piece of a modern investment strategy worth considering, even in small doses. [3]

Why Skepticism Persists

Of course, the hesitation you may feel isn’t without reason. At Envision Wealth Planners, we work with seasoned investors who seek prudent financial advice for high earners to avoid both missing opportunities and making costly mistakes. That’s why we’re not quick to support an idea without first addressing the skepticism it deserves.

The fact remains that cryptocurrencies are notorious for extreme price swings that can wipe out value overnight. This makes them intrinsically far less stable than traditional assets. These currencies lack fundamental value, instead relying on speculation and sentiment, which makes them difficult to evaluate through the same lens you’d use for other investments. Add in a shifting regulatory landscape, unclear tax treatment, and well-documented security breaches—from exchange hacks to scams—and the risks can’t be denied. [3]

Taking a shrewd approach makes sense.

Looking Ahead: The Next Chapter for Crypto

The future of cryptocurrency is still unfolding, but one thing is clear: the market is becoming more and more difficult to dismiss. Bitcoin and Ethereum ETFs have grown too big to ignore, greater regulatory clarity is on the rise, and all signs point to crypto moving into the mainstream. According to Coinbase CEO Brian Armstrong, institutional investors, including funds, endowments, and even governments, are expected to increase their exposure, with bold predictions that many in the know believe are deserving of attention. That kind of participation adds legitimacy and stability to a market once seen as speculative. [4]

Bitcoin’s historical performance has outpaced many traditional assets, offering the potential for outsized returns. Beyond price appreciation, crypto opens doors to innovation, from tokenization of real-world assets to faster, lower-cost global transactions. For business owners, that can mean new efficiencies, fresh opportunities, and access to entirely new markets. While no one knows if digital currency will ever become a widely accepted form of payment, adoption would almost certainly boost its value. [1]

The digital currency and blockchain space may remain volatile, but its trajectory suggests deeper integration with the global economy. It’s reasonable to conclude that savvy investors won’t opt out completely for long.

Why Your Advisor’s Perspective Matters

Cryptocurrency has come a long way from its early days, but it remains a complex and evolving space. Seeking guidance from a fiduciary financial advisor who is both knowledgeable and open to the conversation is an important step. The truth is, many advisors still shy away from crypto, whether due to regulatory uncertainty, skepticism, or personal bias, which can leave investors without the support they need. 

If you’re exploring whether digital assets have a place in your portfolio, consider making it part of a larger planning discussion with your advisor. With the right perspective, crypto can be evaluated alongside all your other goals.

Sources:

1. https://www.investopedia.com/articles/forex/121815/bitcoins-price-history.asp
2. https://www.investopedia.com/tech/what-happens-bitcoin-after-21-million-mined/
3. https://www.investopedia.com/terms/c/cryptocurrency.asp
4. https://www.thestreet.com/crypto/investing/coinbase-ceo-predicts-1m-for-bitcoin-more-bullish-than-ever

 

About the Author

Sean Gerlin, CFP®, CPWA®, ChFC®, CLU®, is the Founder and Principal of Envision Wealth Planners, a fee-only financial advisory firm based in the greater Orlando area. Sean specializes in helping high-income families, business owners, and commercial real estate executives align their wealth with their values through a comprehensive Financial Life Planning approach. Learn more about them at envisionplanners.com. 

The information presented is based on sources believed to be reliable and accurate at the time of publication. This material is for educational purposes only and does not necessarily reflect the views of the author, presenter, or affiliated organizations. It should not be construed as investment, tax, legal, or other professional advice. Always consult a qualified professional regarding your specific situation before making any decisions.

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