Is it too late to invest in crypto?

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Crypto Advice
Partner & Head of Tax
December 13, 2021
minute read

We look at how cryptocurrency works, its value as an investment, and whether or not it’s actually “too late” to invest in crypto

With all the buzz around it these days, it’s no surprise that cryptocurrency is becoming a popular investment. But while popular, you may have heard some people claiming that it’s already too late to invest in cryptocurrency.

Like all investments, this statement is something to take with a grain or two of salt.

With over 40 years’ experience in the industry, we’ve seen our fair share of changes—and this includes understanding how crypto can impact your financial planning. Contact one of our financial advisors to discuss your persoanl situation.

How cryptocurrency differs from other investments

If we’re trying to determine the answer to the question “is it too late to invest in crypto?”, we should probably start at the beginning.

As you’d be aware, cryptocurrency is a virtual type of currency. And, despite what news articles and blog header images tell us, it has no physical form. It’s 100% digital.

It’s underpinned by blockchain technology, making it extremely secure. This also means that each digital transaction is recorded indelibly as a digital record, and powerful cryptographic algorithms keep it safe from external threats.

As the world grows increasingly digital, it’s quickly becoming the newest investment option. And with good cause. Being completely virtual, it means your cryptocurrency assets are spread across a global network of computers. It’s not tied down to any one banking system—it’s completely decentralised. Being completely decentralised means it’s not at the whim of governments or the stock market.

However, as cryptocurrency is effectively its own entity, this means it’s not anchored to any physical asset. So its value is governed entirely by value placed on it by its users.

Some may argue that this makes it effectively worthless—while others see it as being limitless.

When did cryptocurrency growth kick in?

The idea of digital currency has been around since the 1980s. But it wasn’t until the late 1990s that cryptocurrency, as it’s now known, was defined. And then, it wasn’t until 2009 that it was turned into a reality, when Bitcoin burst into our collective consciousness

In its initial years, Bitcoin was only traded by a small, yet fervent, group of enthusiasts. It hadn’t gained much momentum, or even much value. In fact, one of the first purchases made with Bitcoin was for two pizzas—to the value of 10,000 bitcoin. A sum now worth in the hundreds of millions of dollars.

2011 saw the rise of alternative cryptocurrencies, or alt coins, cryptocurrencies that aimed to improve on the foundations laid by Bitcoin.

Ethereum was introduced to the market in 2016, and quickly became one of the key players behind Bitcoin.

Now, cryptocurrency is still on the up.

Why is there so much interest in cryptocurrency now?

What was once seen as a fringe investment, a digital asset for people that lived online, crypto has now become part of mainstream popular culture. However, experience has now proven that cryptocurrency has the power to grow. And with this growth comes volatility. But while it may be volatile, many consider it exciting.

So when looking to make an investment in crypto, it’s important to take a number of key factors into account.

Here’s a quick look at the pros and cons of investing in cryptocurrency.

The final word

So, is it too late to invest in crypto?

While no one can really answer this question for sure, let’s look at the facts.

Cryptocurrency is still in its infancy, but it’s seen some dizzying highs already. And while some people are saying that this can’t last, others say this is just the beginning. New forms of cryptocurrency are coming online all the time.

The technology on which it trades, blockchain, is a solid, secure technology, that’s becoming more and more prevalent in how we do business, and go about our everyday lives. So it’s likely that as blockchain becomes more prevalent, so will cryptocurrency. And as crypto becomes more and more popular, and more people get involved, crypto may become a more viable investment option.

So it’s up to you whether or not you invest in crypto. But at the moment, it doesn't look like it’s going anywhere any time soon.

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