The answer isn’t black and white—but for young investors who approach it with realistic expectations, sound risk management, and a long-term view, crypto can still play a strategic role in a diversified portfolio.

Where Is Crypto in 2025?

Cryptocurrency has matured significantly since the speculative mania of 2017–2021. While Bitcoin and Ethereumremain dominant, the broader market has evolved:

• Regulation is now clearer in Australia, with ASIC and the ATO tightening compliance rules and increasing consumer protections.

• Institutional adoption continues, with major financial firms offering crypto-backed ETFs and custody services.

• Use cases have expanded beyond speculation, including decentralised finance (DeFi), stablecoins, digital ID verification, and blockchain-based gaming.

However, volatility remains high. Bitcoin may no longer swing 40% in a week, but double-digit monthly changes are still common—making it unsuitable as a core savings vehicle.

Should Young Investors Still Care?

1. High Risk, High Reward

Cryptocurrency is inherently volatile. Price movements can be wild, and projects can fail. But for young investors with long time horizons, this risk can be manageable—especially if crypto makes up only a small portion (e.g. 1–5%) of their total portfolio.

2. Diversification Potential

Crypto isn’t directly correlated with traditional asset classes like equities or real estate. While it can crash during market selloffs, it also has periods of uncorrelated or inverse behaviour—offering diversification benefits when used strategically.

3. Learning Opportunity

Investing in crypto often sparks broader financial curiosity. Concepts like decentralisation, scarcity, tokenomics, and blockchain-based governance can deepen your understanding of how financial systems work—making you a more informed investor overall.

What Are the Risks?

1. Volatility

Crypto remains among the most volatile asset classes. Even the most established coins can lose 50% of their value in a year. This is not an asset class for your emergency savings or rent money.

2. Security and Scams

Crypto wallets, exchanges, and tokens can be vulnerable to hacks, scams, or rug pulls. In 2023 alone, over US$1.7 billionwas lost to crypto-related exploits worldwide. Stick to well-established platforms, enable two-factor authentication, and consider cold storage if holding large amounts.

3. Regulatory Uncertainty

Although regulation is progressing, it's still evolving. Changes in taxation, exchange access, or international compliance laws could affect how crypto is traded, taxed, or held in the future.

How to Invest in Crypto (Responsibly)

If you’re considering crypto in 2025, approach it like any other high-risk asset class:

1. Use Reputable Exchanges
   Stick with regulated Australian platforms like Swyftx, CoinSpot, or Independent Reserve.

2. Diversify Within Crypto
   Don’t go all-in on a single coin. Bitcoin and Ethereum are more established, while altcoins carry higher potential—and higher risk.

3. Stick to a Small Allocation
   Crypto should complement, not dominate, your portfolio. Consider limiting it to 1–5% of your investments unless you have deep knowledge and a high risk appetite.

4. Use Dollar-Cost Averaging (DCA)
   Instead of trying to time the market, invest small amounts regularly over time to reduce the impact of volatility.

5. Understand the Tax Implications
   The ATO treats crypto as an asset, meaning capital gains tax applies. Keep records of every transaction—even swaps between coins.

Final Thoughts

Cryptocurrency is no longer the “wild west,” but it’s still not for the faint-hearted. For young investors, it can serve as a high-risk, high-growth satellite allocation—one that may pay off over decades but should never come at the expense of core investments like superannuation, diversified ETFs, or emergency savings.

In short: crypto might still be worth considering in 2025, but only if you understand the risks, invest responsibly, and see it as one part of a broader strategy—not a get-rich-quick scheme.