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Crypto

Crypto assets are digital tokens or network assets. Some are used to pay network fees, some claim utility, and many trade mainly on expectations.

What it is

Crypto is not one asset class with one rulebook. Bitcoin, stablecoins, governance tokens, and NFTs have different mechanics and risks.

Returns usually come from price appreciation, yield programs, staking rewards, or network adoption, but none are guaranteed.

Prices can be extremely volatile. Custody mistakes, exchange failure, scams, smart contract bugs, and regulation can cause permanent losses.

Do not treat social media excitement as research. If you cannot explain the asset and custody risk, the position is too large.

Crypto may fit only a limited, high-risk part of a portfolio after emergency savings and core investments are handled.

Volatility risk: large price drops can happen quickly.
Custody risk: lost keys, hacked wallets, or failed exchanges can mean permanent loss.
Cash-flow risk: many tokens do not produce earnings, so valuation is harder.

Token: A digital asset issued or tracked on a blockchain network.
Wallet: Software or hardware used to control crypto addresses and keys.
Exchange: A platform where users buy, sell, or hold crypto assets.
Stablecoin: A token designed to track another asset, often the U.S. dollar, with its own reserve and issuer risks.

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What makes many crypto assets different from stocks or bonds?

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