If you haven’t heard all the talk about investing in cryptocurrency, NFTs, and other digital assets, then you must have lived under a rock during the past few years! On a serious note, blockchain technologies and the development of many different types of digital currencies have taken the world by storm. Many believe that in the future, they will replace our current banking system and lead to the decentralization of money as a whole. 

However, as always, there are both optimists and skeptics with new developments and new technologies — people who believe cryptocurrencies are the future, and those who think it’s just some novel idea that likely won’t change anything on a large scale. If you lean towards the first group, then you’ve likely thought about investing some of your money into cryptocurrencies. 

Keep reading to learn more about the risks and rewards of investing in cryptocurrencies and whether it’s a good long-term investment or not. Let’s get started!

A Short Overview of Cryptocurrency

Let’s start with a short overview of what cryptocurrencies are for those of you that are still on the fence about whether you understand this term or not. All in all, crypto is a digital currency secured by cryptography, making it functionally impossible for any kind of counterfeit to occur. Essentially, the whole idea behind the cryptocurrency system is to decentralize the current monetary system, making transactions possible without the need for banks and only with the use of blockchain technology. Blockchain technology helps verify each transaction that occurs. 

The idea for a non-centralized payment system is what makes cryptocurrencies so popular, and it’s also why there are so many believers that it is the future of the “banking” sector. The fact that we can make payments to one another without any authority having control over the transactions is loved by many, as this means that it’s immune to interference from governments or any kinds of third-party manipulation.  

Cryptocurrency: Risk vs. Reward

There are many rewards investors can reap from putting money into cryptocurrencies. The most prominent ones include the potential to gain a lot in a short period of time, the fact that the initial investment can be as big or as small as you like, and that you can experiment quite a lot with the different coins. With that said, the cryptocurrency market is highly volatile — the prices of coins go up or down for many different reasons. Anything from Elon Musk Tweeting about Dogecoin to the implementation of the Metaverse can cause sudden fluctuations. 

The cryptocurrency market never stops. It’s 24/7, and changes are happening all the time. If you plan to invest your money, it might be a good idea to immerse yourself in that space by joining communities such as Reddit groups and Discord chats to get play-by-plays of fluctuations while they’re happening. 

Along with that, having the potential opportunity to earn a lot of money means that there’s also the chance to lose a lot. The chances of fraud are also not negligible; even though crypto relies on blockchain technology and the transactions cannot be fraudulent, there are still many ways to trick investors and get them to buy into coins that have no real purpose behind them, which will ultimately lead to the loss of money. In many places all over the world, the cryptocurrency market is not regulated in any way, which makes it a breeding ground not only for extreme volatility but also for fraud. 

The Risks of Investing in Crypto

Now, let’s take a more in-depth look at what truly awaits those investors who decide to believe in this futuristic idea and invest their hard-earned money into coins. 


If there were a list of the most volatile investment options in the world, then cryptocurrencies would likely land near the top. This financial asset goes through highs and lows for the most bizarre reasons; a single Tweet or news article may send the prices through the roof, or it might bring them down to the ground in a heartbeat. This makes investing in the crypto sort of like a poker game — knowledge may help you, but still, luck and surrounding circumstances matter more. 

Unregulated Trading Exchanges and Platforms 

Due to the booming popularity of cryptocurrencies, many trading platforms and exchanges now offer coins. This has led to it being extremely difficult to validate which platform is a good one and which one is fraudulent. Along with that, the lack of regulation has made the crypto market susceptible to scams and market manipulation.

Possibility of Hacking and Cybertheft

Cryptocurrencies are an excellent target for hackers as they rely entirely on their network and anonymity. Recently, more and more phishing attacks have been used so that hackers gain control over cryptocurrency trading platforms and wallets. This means that if you plan on investing in crypto, you have to ensure you’re as safe as possible when using the Internet. 

Potential Rewards of Investing in Crypto

All this talk of risks may have you thinking that everything surrounding crypto is hazardous; however, that’s not the case. There are many positives that can come with putting your money into cryptocurrencies, and here are two of them. 

Crypto Can Be Transformational for Our World

There’s a real chance for cryptocurrencies to change the way our world operates. And that likelihood is not small. This means that by being one of the first people to believe in the idea and genius behind blockchain technology and cryptocurrencies, you might grow your wealth in the future as the technology becomes integral to our daily lives. 

A Way to Store Value

Cryptocurrencies aren’t tied to any authority, and most are not available in unlimited supply, making them a decent long-term, reliable way to store value. Unlike flat money, they cannot be affected by inflation, the decisions of governments, or any other political body, which makes them a good option for people who fear hyperinflation or other disastrous situations.

Can Cryptocurrency Be a Long-Term Investment?

Whether or not you believe cryptocurrency is a great long-term investment largely depends on whether you consider blockchain technology as the future. Some people believe that Bitcoin might replace gold in the future, meaning that they also consider the coin a great way to store value over a long period of time. Ethereum, the second largest cryptocurrency, is also viewed by many as a groundbreaking technology with a vast potential to become a regular part of our daily lives, which is why many consider it to be the “silver” of cryptocurrencies. 

Overall, before you decide to invest in cryptocurrency long-term, you have to know what you’re putting your money into. That’s the only way to know whether you believe in the technology and are willing to risk losing money if your hypothesis doesn’t come true. 

Beware of FOMO When Investing in Crypto

Having said all of that, many people currently invest in crypto only because it’s modern and cool — it’s the investment that everyone is talking about right now. Cryptocurrency has gotten a lot of attention over the last few years, especially as Bitcoin climbed up in price. All over the news and on social media platforms, people (both experts and non-experts) were predicting how high it could get and were describing the new decentralized future that coins will bring us. 

This led to the notion that if you’re not investing in crypto, you’re almost destined to be poor in the future, as you will have missed investing in the next big thing. Many people invested due to the so-called FOMO (fear of missing out) and started to invest their money without doing enough research on what exactly they’re putting their hard-earned dollars into. 

To avoid making that same mistake, you must be aware of FOMO and know when to push against it. If you start succumbing to FOMO, try to remind yourself to take the time to research the cryptocurrency you want to invest in before making the decision. 

In Conclusion 

As with every other investment, putting your money into cryptocurrencies comes with both rewards and risks. It’s up to you to choose whether you want to take the risk and whether you believe enough in the technology to invest in it long-term.

To get more insight into your portfolio and your personal risk tolerance, contact us at Alpha Wealth Funds. We’re ready to help you grow your wealth and create a plan that protects your assets.


Please feel free to reach out to me on this or any of your investment needs or questions. I may not always have the answers at my fingertips, but I promise I will get them for you. Michael Torrence

Calendly link https://calendly.com/mt-awf/intro Work: 435.658.1934 Contact: 330.284.3211
Michael Torrence – Investment Advisor Representative: Michael was born and raised in Ohio and attended The Ohio State University. After College, he was commissioned as a 2ndLt in the United States Marine Corps. He attended his initial training in Quantico, Virginia, then graduated at the top of his Primary Aviator Class and was selected for the Strike (Jet) Platform.

Founded in 2010, our services include boutique hedge funds, separately managed accounts, financial planning, estate & trust services, private placements, and in-house concierge services for high net worth individuals, families, and businesses.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All investments involve risk including the loss of principal.