Crypto
What Bitcoin and other crypto assets are, what drives them, why drawdowns of 70–90% are common and how to size a crypto position sensibly.
Crypto assets are digital assets recorded on public blockchains. Bitcoin aims to be scarce digital money with a fixed supply of 21 million coins; Ethereum and Solana are platforms on which other applications are built.
What drives crypto
Adoption, global liquidity and risk appetite above all. Regulation, spot ETFs, institutional buyers and Bitcoin's four-year issuance cycle also shape prices. There are no earnings or coupons, so valuation is much harder than for stocks or bonds.
Extreme risk, extreme trends
Crypto has produced some of the largest gains of any asset class — and drawdowns of 70% to more than 90%. Smaller coins are riskier still and many have disappeared entirely.
How to invest
Through regulated exchanges or, increasingly, exchange-traded products. Self-custody with a hardware wallet removes exchange risk but makes you responsible for your keys.
Role in a portfolio
Position size is everything. A small allocation can add meaningful upside while keeping the downside bearable. Because crypto trends so strongly, a rule for when to step aside can matter more here than in any other asset class.
Markets in this asset class
Put it into practice: a free account unlocks equity curves and signals for six core markets and the full glossary.
🔒 Open free accountEducational content, not investment advice. Disclaimer.