In the first week of taking office, President Trump signed an executive order designed to support the US crypto industry and appointing senior officials who support crypto. More than anything, this move underscores his declared intention to make the USA the "crypto capital" of the world...and raises questions about the future -- and profitability -- of cryptocurrency.
What is cryptocurrency?
Cryptocurrency, also known as "crypto", is a digital currency that can be used to buy goods and services or as an investment. Cryptocurrencies are decentralized, meaning they are not controlled by a central bank or government.
How cryptocurrency works
At the core of cryptocurrency is the blockchain, a public and tamper-proof ledger that records all transactions.
When a person sends cryptocurrency to another, the transaction is grouped with others into a "block." This block is then verified by network participants, called miners (for Proof of Work systems like Bitcoin) or validators (for Proof of Stake systems like Ethereum 2.0).
Once verified, the block is added to the chain, making the transaction permanent and nearly impossible to alter.
Users store and access their cryptocurrencies through digital wallets, which contain cryptographic keys that allow them to send and receive funds.
Transactions are peer-to-peer (P2P), meaning they occur directly between users without banks or payment processors.
Cryptocurrencies can be used for various purposes, including online purchases, investments, and decentralized finance (DeFi) applications.
Is cryptocurrency a good investment?
Since taking office, the Trump administration has made several aggressive moves to promote cryptocurrency, including appointing a Crypto Task Force and investing in a strategic reserve of cryptocurrencies.
These moves have sent crypto prices soaring and led more people to wonder, "Is cryptocurrency a good investment?"
But is cryptocurrency a good investment? Here are some of the reasons to invest in crypto:
- Potentially High Returns: Some cryptocurrencies, like Bitcoin and Ethereum, have seen massive gains over time. Early investors have made significant profits.
- Decentralization & Independence: Crypto isn’t controlled by banks or governments, making it an alternative store of value (some call Bitcoin "digital gold").
- Diversification: Adding crypto to your portfolio can spread risk, as it doesn’t always move in sync with stocks or bonds.
- Innovation & Growth: Blockchain technology is advancing rapidly, leading to new opportunities in finance, gaming, and decentralized applications (DeFi, NFTs, Web3).
- Hedge Against Inflation: Some believe Bitcoin, with its fixed supply of 21 million coins, can protect against inflation.
That said, there are considerable risks in investing in cryptocurrency.
Why cryptocurrency is (potentially) bad to invest in:
- Extreme Volatility: Crypto prices can swing wildly. Bitcoin, for example, has crashed by over 50% multiple times.
- Regulatory Uncertainty: Governments are still figuring out how to regulate crypto, which can impact prices and usage.
- Security Risks: If you lose your private keys or get hacked, you may lose access to your funds permanently.
- Scams & Frauds: Rug pulls, Ponzi schemes, and fake projects are common in the crypto world.
- No Guarantees: Unlike stocks, which often generate revenue through business activities, many cryptocurrencies don’t produce cash flow, making their value highly speculative.
So…should I invest in crypto?
As explained above, crypto is a risky investment. But if you're risk-tolerant and can handle price swings, crypto may be a good addition to a diversified portfolio.
On the other hand, if you're looking for a safe, steady investment, traditional assets like stocks, bonds, or real estate may be better.
Since cryptocurrency doesn’t have the same long history of returns as other investments (like stocks), they are more of a gamble. Casino rules are the smartest approach: don’t invest more than you can afford to lose.
What cryptocurrency to invest in
To be clear: this is not investment advice. But if you are interested in investing in crypto, here are some popular cryptocurrency investment options:
1. Bitcoin (BTC)
Market cap: $1.6 trillion
Year-over-year return: 27%
Bitcoin (BTC) is the original cryptocurrency.
Bitcoin’s price has skyrocketed as it’s become a household name. In May 2016, you could buy one bitcoin for about $500. As of Mar. 4, 2025, a single bitcoin’s price was around $82,791. That’s a growth of 16,458%.
2. Ethereum (ETH)
Market cap: $248.9 billion
Year-over-year return: -41%
Both a cryptocurrency and a blockchain platform, Ethereum is a favorite of program developers because of its potential applications.
Ethereum has also experienced tremendous growth. From April 2016 to the end of March 2025, its price went from about $11 to around $2,064, increasing 18,664%.
3. Solana (SOL)
Market cap: $69.1 billion
Year-over-year return: 4%
Developed to help power decentralized finance (DeFi) uses, decentralized apps (DApps) and smart contracts, Solana runs on a unique hybrid proof-of-stake and proof-of-history mechanisms to process transactions quickly and securely. SOL, Solana’s native token, powers the platform.
When it launched in 2020, SOL’s price started at $0.77. By late March 2025, its price was around $136.12, a gain of 17,577%.
4. Dogecoin (DOGE)
Market cap: $28.3 billion
Year-over-year return: 17%
Dogecoin was famously started as a joke but rapidly evolved into a prominent cryptocurrency thanks to a dedicated community and creative memes. Unlike many other cryptos, there is no limit on the number of Dogecoins that can be created, which leaves the currency susceptible to devaluation as supply increases.
Dogecoin’s price in 2017 was $0.0002. By March 2025, its price was at $0.19, up 95,216%.
5. U.S. Dollar Coin (USDC)
Market cap: $56.3 billion
Year-over-year return: 0%
Like Tether, USD Coin (USDC) is a stablecoin, meaning it’s backed by U.S. dollars and aims for a 1 USD to 1 USDC ratio. USDC is powered by Ethereum, and you can use USD Coin to complete global transactions.
Information in this section was provided by Forbes.
Frequently asked questions about cryptocurrency
Will cryptocurrency crash?
Dips and peaks are a normal part of the economic cycle; every asset you can invest in will rise and fall depending on various factors. However, assets like the stock market and real estate are proven to rise over time. And while crypto has grown steadily despite setbacks, because it's a fairly new asset, there's no way to confidently predict how cryptocurrency may grow over the next 10, 20, 50 years.
Furthermore, crypto is volatile. We have seen Bitcoin drop more than 50% before, and it is possible that it will do so again in the future.
Are cryptocurrency gains taxable?
Yes. Cryptocurrency is classified as a capital asset, like stocks, rather than cash. If you sell crypto for a profit -- or even if you use it for a purchase and receive greater value than you paid for it -- you will need to report gains to the IRS.
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If cryptocurrency sounds like too big of a gamble for you, that's ok! As we teach in our Intentional Investing course, there are plenty of other ways to build wealth through investments with confidence.
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