Important information: The value of investments and the income from them can go down as well as up, so you may get back less than you invest.

CRYPTO’S been doing that thing it does when it’s not rising - it’s been falling, hard. So hard that the combined crypto market shed $1.4 trillion last week.

Many people insist now’s a “buying opportunity”. These aren’t just the devotees - according to a LinkedIn poll we launched this week, 61% of you thought that crypto-in-chief Bitcoin would “recover soon”.


Why the optimism? In a somewhat less scientific poll of 100 crypto investors I just made up in my head, the results went like this:

70 said “it just, um, will”.

25 used the following phrases: “collapse of the global monetary regime”, “decentralised revolution”, “fiat” and “Elon Musk”.

5 will take you through the long-term investment potential of something known as the “blockchain”.

There’s a lot here but little substance. Those 70 you can ignore. You should never invest in something you don’t understand.

The 25 are trickier. These are the spiritual offspring of Bitcoin’s founding father, a shadowy “may-or-may-not-have-ever-existed” figure known as Satoshi Nakamoto. They’ve been raised on a diet of Fight Club and dank memes to believe Bitcoin is the decentralised currency that’ll bring down Wall Street and restore order to the galaxy.

Maybe it will? Maybe..? I don’t know. Pass.

Those last five, I’d listen to. There’s more to this “blockchain” business than meets the eye.

The blockchain is essentially a free database that keeps a decentralised record of transactions. It’s best known in conjunction with crypto, but blockchain has other uses too. It’s at the heart of all this talk of a virtual future and the next iteration of the internet, “web3”. Metaverses, NFTs (non-fungible tokens) and digital currencies - there’s a blockchain behind every one of them.

So, if this really is the future, what’s stopping me from investing?

The first reason is practical. Remember my first rule (and Warren Buffett’s): don’t invest in something you don’t understand. Even if there is something in all this, I have no idea what *it* is. Is it Bitcoin? Is it Ethereum?

If this has all got a very early-noughties feel to it, there was a difference then between investing in Facebook and MySpace.

The second reason is boring but I stick by it: risk.

Crypto is super risky. Even if people tell you Bitcoin’s the new gold or is good at diversifying, recent falls remind you that crypto is still, ultimately, an ultra-speculative asset.

That brings me to my second rule of investing: know thyself. Or, more specifically, know thy risk appetite. Maybe some people can stomach massive falls on their portfolio, but I’m not one of them.

Investing, for most people, is the compromise between fulfilling their financial objectives and being able to sleep at night. Yes, I can see the potential, but can I stomach the inevitable risk crypto entails?

Personally, no.

Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. Overseas investments will be affected by movements in currency exchange rates. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.

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