**Crypto Investing: What You Need to Know Before You Jump In**

We’ve been holding onto some Bitcoin for a while now, but we don’t talk about it much. Why? Because crypto is risky. Like, lose-your-money-in-a-heartbeat risky. Until recently, it felt more like gambling than investing. But something is changing—big institutions and regulators are starting to take crypto seriously. And when they start paying attention, we do too.

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### Crypto: Is It Really an Asset Class?

Let’s be clear—calling crypto an “asset class” is still a stretch. Most traditional assets (like stocks or real estate) have well-known ways to figure out what they’re worth. Crypto? Not so much. It’s mostly based on hype and speculation. People say things like, “You just don’t get how smart this tech is,” or “This time it’s different.” Spoiler: It’s never different.

Experienced investors always begin by asking: is this even something worth investing in at all? Most retail investors underperform the market—badly. In 2023, the average investor lagged behind the S&P 500 by 5.5%. And that’s during a bull market! Now imagine betting on something like crypto, where half of all tokens ever created have completely failed.

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### What Crypto Should You Own?

If you’re going to invest in crypto, start with the biggest names. Right now, the total value of all cryptocurrencies is about $4 trillion. That’s small compared to the $54 trillion market cap of the S&P 500. Over half of that $4 trillion belongs to Bitcoin. Add in Ethereum and a few others, and you’ve covered most of the market.

But be careful—some big names come with big red flags. Take Tether, for example. It’s a “stablecoin” that’s supposed to be backed by U.S. dollars. But they’ve been fined before for not having enough money in reserve, and they still haven’t been properly audited for the $165 billion they claim to have. Until they get audited, Tether is too risky.

If you want to invest broadly in crypto without touching Tether, consider the Grayscale Digital Large Cap Fund (GDLC). It includes Bitcoin and Ethereum but skips Tether. It’s a good starting point for getting exposure without going all-in on risky assets.

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### Where Should You Keep Your Crypto?

For most people, using a crypto ETF (Exchange-Traded Fund) is the safest choice. These are managed by big firms that are regulated and audited. If something goes wrong, you’re more likely to be protected.

If you decide to hold crypto yourself, use a trusted, publicly traded platform like Coinbase. They’re audited and used by institutions, which is a good sign. They also store 98% of their customers’ crypto in cold storage (offline), which adds an extra layer of security.

Cold storage can be a good option if you really know what you’re doing—but it also brings more complexity. If you’re not comfortable with that, just make sure your account has strong passwords, two-factor authentication (2FA), and avoid clicking suspicious links.

Most importantly: never tell anyone what crypto you own or where you keep it.

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### How Much Crypto Should You Own?

This depends on your overall financial picture. If you’re just throwing your tax return into Dogecoin because of FOMO, you’re probably going to learn some hard lessons fast.

A better approach is to look at your total net worth and break it down by asset type—stocks, bonds, real estate, etc. Then decide how much should go into “alternative assets” like crypto.

A general rule: keep alternatives at 10% or less of your total portfolio. That’s our strategy. We split that 10% across wine, gold, art, and Bitcoin evenly.

Pick alternatives that match your interests and lifestyle. If you love wine or art, those can be fun to invest in. Gold is a classic diversifier. Bitcoin? Maybe—but don’t let it be your entire alternatives allocation unless you really believe in it and understand the risks.

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### Will We Buy More Crypto?

Maybe—but not when prices are peaking and hype is high. We’ll wait for more research from institutions about how much crypto people should own in a balanced portfolio.

Crypto is still very new. We don’t have decades of data like we do with stocks or bonds. That makes it hard to say how crypto fits into long-term investment strategies.

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### What About Crypto Stocks?

Some people get crypto exposure by buying stocks of companies involved in the space—like MicroStrategy or Circle (which recently went public). Be cautious here—some of these companies have questionable track records or shaky business models.

One company we do like is Coinbase (COIN). It’s publicly traded, used by institutions, and has strong security practices. It’s a good way to bet on the growth of institutional crypto adoption without buying crypto directly.

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### Final Thoughts

People tend to either love or hate crypto. Some think it’s worthless junk; others think Bitcoin will hit millions per coin someday. The truth is probably somewhere in between.

Institutions are slowly getting involved, and that’s a good sign for long-term investors looking for stability and legitimacy in the space.

Until then, stick with smart investing habits:

– Think about crypto as part of your overall asset mix.
– Use regulated platforms or ETFs.
– Don’t chase hype.
– Set clear limits on how much you invest.
– Keep your security tight.

Crypto might be part of the future—but only if it grows up first.