Cryptocurrency: a speculative tool, not a foundation for a financial strategy
With the rise in popularity of Bitcoin, Ethereum, and other cryptocurrencies, it’s common to hear statements like:
“I don’t want to invest in traditional funds or stocks; I prefer cryptocurrency.”
But despite the technological innovation it represents, cryptocurrency does not yet have a place as a central pillar of a retirement or financial security portfolio — for very concrete reasons.
1. Cryptocurrency is extremely volatile
Cryptos are known for their extreme volatility, making them a highly speculative asset. For example:
Bitcoin lost more than 75% of its value between November 2021 (US $68,000) and November 2022 (around US $16,000) before recovering.
This volatility can be appealing to a short-term investor but is dangerous for those who want to build long-term wealth, plan for retirement, or protect their family.
Source: CNBC, *Bitcoin lost more than 75% of its value during the 2022 crypto winter*, 2023
2. Cryptocurrency is neither regulated nor insured like traditional investments
Unlike stocks, ETFs, or bonds held through an RRSP or TFSA in Canada, cryptocurrencies are not protected by the Canadian Investor Protection Fund (CIPF). If a platform shuts down or gets hacked, your assets may be lost.
A well-known example:
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FTX, one of the largest cryptocurrency platforms, went bankrupt in 2022, leaving millions of investors — including many Canadians — with no recourse.
Source: Radio-Canada, *Collapse of FTX: Canadian investors left stranded*, 2022
Credible organizations such as the Autorité des marchés financiers du Québec (AMF), the Canadian Investment Regulatory Organization (CIRO), and even the International Monetary Fund (IMF) issue clear warnings:
“Crypto assets are highly risky and not suitable for all investors. It is not advisable to invest a significant portion of one’s savings in these products.”
Sources:
- AMF Québec, Cryptocurrency and high-risk investments, 2023
- FMI, Crypto assets and financial stability, 2022
- OCRI, Guidelines for Crypto Investing, 2023
The argument often made is that cryptocurrencies are “the gold of the future.” But as of today:
- Gold has historically low volatility, a negative correlation with stock markets, and real utility in industry and central banks.
- Cryptocurrencies have not yet proven they can fulfill that role.
A BlackRock report (2023) concludes that while cryptocurrencies are interesting as satellite assets, they are not yet considered stable stores of value.
Source: BlackRock Research, Digital Assets Outlook, 2023
Investing exclusively in cryptocurrency is like putting all your money into a single tech sector in the early 2000s. There is innovation, yes — but also the risk of a bubble, unfavorable regulation, or technological change.
A solid financial strategy includes:
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productive assets (stocks, bonds, real estate, ETFs);
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sectoral and geographical diversification;
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tax-efficient vehicles (TFSA, RRSP, RESP, etc.);
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risk management aligned with your time horizon and objectives.
Cryptocurrencies can be part of a portfolio… but in a moderate proportion (e.g., 2 to 5%) and never at the expense of financial security.
Cryptocurrency is not a financial strategy — it is one speculative asset among others.
It does not replace an emergency fund, a retirement plan, or family protection.
Saying “I prefer crypto” is like saying “I prefer the casino to a portfolio.”
It can pay off… or wipe everything out.
It’s better to build a solid, diversified, and sustainable plan in which crypto can play a controlled role — without ever betting everything on it.
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AMF Québec, *Cryptocurrency and investment risks*, 2023
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CNBC, Bitcoin plunges 75% during crypto winter, 2023
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FMI, Global Financial Stability Report – Crypto Risks, 2022
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BlackRock, Digital Assets Market Outlook, 2023
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OCRI, Crypto investing guidelines for Canadian investors, 2023
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Radio-Canada, *The FTX collapse explained*, 2022
