[shimon]

No, these numbers do in fact suggest the crypto market is extremely volatile. Many, many people who invest regularly in stocks should not invest in cryptocurrency because it is too volatile.

People/companies that are able to understand and accept the risk that comes from speculating on cryptocurrencies should consider doing so, because it is possible to make a profit, perhaps a significant one.

But if you're looking at the past and saying "wow, I should buy BTC because it made 1000% last year - it can't lose!" then you're ignoring a quite serious risk that volatile growth could change into volatile collapse in the future.

[DennisP]

They're volatile, but they have low correlation with other asset classes. You can put a small portion of your assets in crypto and lower the overall risk of your portfolio.

They also have very high Sharpe ratios (the ratio between returns and volatility), though given crypto's short history we shouldn't trust that too much.

https://www.bletchleyindexes.com/blog/idx_perf_post

[base698]

I always read these posts as all or nothing, so forgive me if that's not what you mean. Why not take a smaller chunk of a portfolio, say 2%, and invest in crypto?

That way you can get potentially huge gains with little at risk.

[csomar]

See Shimon comment. Economists/Traders/Finance guys have this concept that: Every stock/asset/price is equal. It is the volatility that matters.

Traders don't look for "potential growth". In their frame of reference, that potential of growth is already "priced in".

Now if you disagree with that, it is another story.

Edit: replied to the wrong guy.