Is Now the Time to Invest in Crypto?

Following sharp rallies, evolving regulation, and political backing – the crypto market is transforming

The digital asset market has undergone a dramatic shift over the past year. The “crypto winter” of 2022 now feels like a distant memory. In its place, Bitcoin has surged past the $100,000 mark, major financial institutions are opening their doors to digital investments, and new U.S. legislation aims to redefine the rules of the game. While crypto assets were long considered speculative fringe investments, they are now a central part of the conversation about modern portfolio construction.

Regulation and Institutions: The Financial Establishment Embraces Crypto
The most notable shift is the transition of crypto assets from the regulatory periphery to the heart of the financial system. The U.S. Securities and Exchange Commission (SEC) has begun overseeing Bitcoin- and Ethereum-based ETFs, granting these assets formal recognition as regulated investment vehicles. Coinbase, once viewed as a disruptive startup, has now been added to the S&P 500 index – a symbolic but powerful milestone. Meanwhile, Circle, the company behind the stablecoin USDC, completed a full public listing.

The U.S. federal government is also signaling a change in direction. The current Trump administration has expressed explicit support for blockchain technologies, and the Department of Labor has repealed the 2022 guidance that had restricted crypto holdings in 401(k) retirement plans. These steps reflect a broader shift in perception, positioning crypto as a legitimate component of long-term investment strategies.

Bitcoin as an Hourglass: Supply Constraints Meet Rising Demand
As of June 2025, Bitcoin is trading near $100,000. Experts believe there is still room for growth. With a maximum supply capped at 21 million coins – and over 19 million already mined – rising demand from institutional and retail investors creates a deflationary mechanism that supports price appreciation. From an economic standpoint, Bitcoin functions as a store of value, unlike stocks that are valued based on cash flows or business fundamentals. As such, its price is largely driven by market sentiment.

A Gradual Exposure Model: Calculated Risk, Not a Gamble
Veteran financial advisor Ric Edelman argues that even conservative investors can consider measured exposure to digital assets as part of a risk-diversified portfolio strategy. According to him, allocating just 1% of a balanced portfolio (60% stocks, 40% bonds) to crypto is unlikely to harm long-term returns even if the value drops to zero: the average return would decrease from 7% to 6.9%. Conversely, if Bitcoin skyrockets to $1 million, returns could increase to 7.4% – without systemic risk.

To illustrate: a 3% Bitcoin allocation could reduce portfolio returns from 7% to 6.8% in a worst-case scenario, but push them up to 8.2% in a bullish case. A 5% allocation could yield a 9% return in a high-growth scenario, compared to 6.7% in a loss. These figures underscore how modest exposure can have a significant upside impact – within clearly defined risk boundaries.

Stablecoins and ETFs: An Accessible Path for the Cautious Investor
One of the preferred entry points for investors today is through SEC-approved Bitcoin-based exchange-traded funds (ETFs). These funds offer exposure to the crypto market without the technical risks of self-custody or key loss. They also reduce the risk of fraud, which remains a concern in the crypto space. Already, more than 10 crypto ETFs are active in the U.S. market, managing billions of dollars in assets – a scale that simply did not exist just two years ago.

Not for Everyone: Volatility, Regulation, and Emotional Capital
Despite growing popularity, not all financial advisors recommend crypto for every client. Niladri Mukherjee, Chief Investment Officer at TIAA, cautions that valuation models for crypto remain underdeveloped, and global regulation is still evolving. Many investors underestimate the extreme volatility of the market – a trait that often triggers panic selling when prices are low.

Certified financial planner Trent Porter recommends capping crypto exposure at 5% of the portfolio, tailored to each investor’s risk tolerance – and no more. He emphasizes that even as regulation improves, market risk remains elevated.

Looking Ahead: Maturing Regulation, New Entrants, and a Cautious Approach
The crypto market of 2025 is fundamentally different from that of 2020. The shift from the margins to the financial mainstream presents enormous potential – but also demands caution. Against a backdrop of regulatory development, technological innovation, and institutional support, the market may be entering a new stage of maturity.

Still, investing in digital assets is not without risk – especially given political headwinds, global market dynamics, and structural uncertainty. Investors must carefully assess their exposure, understand the risks, and act based on knowledge and strategy – not fleeting euphoria.