Bitcoin rose more than three per cent to register a record high of US$123,000 on Monday.Dado Ruvic/Reuters
With bitcoin hitting record highs this year amid optimism over “pro-crypto” U.S. President Donald Trump, many want to dive in lest they miss bitcoin’s seemingly instant rewards. Do you feel tempted? If so, ask yourself: “Why should I own crypto?” Here is a clear-eyed look at the pluses and minuses
Crypto bulls dismiss bitcoin’s early-2025 plunge as a temporary blip, with the subsequent rebound portending even bigger gains ahead. Yes, Mr. Trump’s pro-crypto posturing is a potential bullish feature – perhaps via several U.S. congressional proposals of crypto-friendly legislation. Mr. Trump has already established America’s “Strategic Bitcoin Reserve” and “Digital Asset Stockpile.” U.S. regulators have dropped investigations into Coinbase, the country’s largest crypto exchange. Mr. Trump’s “memecoin” investor dinner – a prize for the biggest buyers of his memecoin – spurred endless headline hype. All hopeful.
It isn’t just America. Canada pioneered the world’s first bitcoin ETF in 2021 and helps set global standards by providing clear tax and investing guidelines to bolster crypto confidence and innovation.
Nor is Canada alone. Virtually every global financial hub vies to be crypto’s capital. Hong Kong has over 1,100 crypto-tilted fintech firms, up five-fold from 2017. Britain’s Labour government aims to bolster London’s status. Switzerland’s 2021 crypto framework fostered a booming startup landscape. Japanese officials are mulling crypto regulatory reform.
Opinion: America is the buck-wild cryptoland now. Canada will have to live with that
Moreover, some publicly traded firms are increasingly adding bitcoin to their holdings. While that is worth watching, as it potentially facilitates crypto infecting stocks, these so-called “crypto treasury firms” total an estimated 135 in all, and most are so small they aren’t even in major indexes. Plus, one single firm, MicroStrategy, accounts for over half of corporate bitcoin purchases.
Regardless of all that, what is the case for you to own crypto? Some say it diversifies, guarding against risks to normal currencies or assets – a “safe haven” amid tariff fears and more. Or hedges inflation. Since bitcoin supply is capped, bulls believe it can’t be endlessly devalued like normal currencies. Many bitcoins are also lost, likely forever, reducing total supply.
Yet this ignores that crypto supply, overall, is fully infinite. Think ethereum, dogecoin, XRP, Trump’s memecoin and more ahead, potentially infinitely if demand rises. All raise questions about which ones survive long-term. Mr. Trump’s memecoin has nosedived since inception, illustrating crypto’s fickleness.
Still, most bulls tout giant gains. Since 2010, bitcoin soared 159 per cent annualized through 2024’s close! It rose 122 per cent in 2024. It climbed 69.2 per cent from the most recent U.S. election through July 11 despite 2025’s wild volatility. Explosive!
But huge surges pair with deep crashes – as 2025 has already shown. In rolling 12-month spans this decade, bitcoin returns ranged from 2,347 per cent to minus-83 per cent. It unpredictably booms and bombs.
Bitcoin first topped US$100 on April 1, 2013 and peaked days later. A 71-per-cent swoon ensued. Later in 2013, it topped US$1,100. Within roughly 21 months it dropped 84 per cent. 2018 repeated that. The extant boom follows 2021 – 2023’s -77-per-cent plunge. That is several times the 1929–1932-sized stock market crashes in just one decade. Even early-2025’s relatively “small” drop was 28.1 per cent. Poor timing can sink you.
What drives these swings? Not fundamentals – crypto has none. No industrial uses, profits, sales or yield. The industry is rife with crime and scams – as you have seen with multiple Canadian cases in 2025 alone. July’s global OmegaPro scam in the U.S. is merely the latest. And that says nothing of February’s Bybit hack, crypto’s largest ever, or America’s infamous FTX fraud.
Also, most “coins” are vastly too volatile to be actual currencies. Yes, there are stablecoins – those pegged to a major currency – which generally swing less. But “stable” isn’t always so stable and much is shrouded in a regulatory haze. For example, the Canadian Securities Administrators defines stablecoins as securities – confusingly diverging from the U.S. and much of the world, which deems them digital payment assets. Who knows if the CSA or others blink first (or ever)?
Opinion: Canada was once a global leader in crypto. It can be one again
Inflation hedge? No. The 64-per-cent bitcoin drop in 2022 came as Canadian inflation galloped to 8.1 per cent year over year and America’s hit 9.1 per cent. Bitcoin failed its only inflation-edging test.
So, what explains crypto’s swings? Others’ demand shifts, full stop. Pure sentiment. Can you time their pure sentiment mood swings? I can’t. If not, can you hang on long term if bitcoin nosedives again ... and again?
Emotions don’t help. With volatile assets, investors often buy after big gains – like now – on fear of missing out. When prices fall, they sell from fear of holding on, locking in losses.
I have watched investors repeat this folly in volatile commodities and stocks for 50 years. Crypto is stock market volatility on super-steroids. Can you personally stomach all that?