in our free newsletter.

Thousands benefit from our email every week.

If you want to know whether to invest in cryptocurrency, there are four questions you need to ask yourself

  • Do you have a diversified portfolio already?
  • How much money are you comfortable putting into riskier investments?
  • Are there other big bets you want to make?
  • Are you comfortable if the value goes to zero?

If these questions seem intangible or confusing – don't worry, all be will explained as you read on.

Do you have a diversified portfolio already?

Businessman checking reported profits on the paper and laptop.
suphakit73 / Shutterstock

Unless you have an ironclad pension, you need to take care of your retirement savings yourself. The best way to do that is to invest regularly in a portfolio of low-cost, diversified investments that will grow alongside the market over time.

Think of something like your traditional Wealthsimple Invest TFSA or RRSP account: It’s got exposure to multiple countries, multiple industries and multiple different types of investments, built right in for a low annual cost. Sure, it’s not going to quadruple in the next month, but you’re also not going to lose 85% of the value if a single stock — or cryptocurrency — tanks tomorrow.

This is where the bulk of your investments should be, and that applies to anyone — but it doesn’t mean there’s no room for other options.

With Qtrade Direct Investing™, you can build, evaluate and test your portfolio using analyst research and tools that feature their most advanced risk analysis and portfolio-building technology.

Now get up to $150 sign-up bonus until June 30, 2023 with promo code BONUS150.

Division of Credential Qtrade Securities Inc.

Get Started

How much money are you comfortable putting into riskier investments?

Canadian dollar with notepad pen and calculator
RomanR / Shutterstock

Cryptocurrency is one of the best examples of a risky investment. There are no real “market fundamentals” that underpin, say, a dividend-paying bank stock.

Is a concept like “underlying market fundamentals” debatable with any hot investment? Sure, but with corporate stocks you can at least follow their announcements or read earnings reports.

So before you decide to buy cryptocurrency, you should figure out how much money you’re comfortable putting into something that is, by definition, riskier than average.

One of the easiest ways is to do this is to think in terms of percentages. Determine a percentage — say 10% — that you’re comfortable putting into investments that are outside your usual risk tolerance.

So if you had $10,000 to invest today, that would mean putting $9,000 into your diversified long-term portfolio and then allowing yourself $1,000 to invest in whatever you want cryptocurrencies included.

One great way to allocate that 10% is through Wealthsimple Trade, which gives you access to individual stocks, ETFs and, yes, cryptocurrencies. You’ll even get a $10 bonus when you open your account and invest at least $100.

Are there other big bets you want to make?

Young smiling happy couple talking at home in the kitchen with laptop
fizkes / Shutterstock

Remember that any money you invest in one place is money you’re not investing somewhere else. This is one of those investing principles that are as important as they are obvious.

Are there any other big swings you want to take? Maybe an IPO you’ve heard is coming up, or a company you’ve done a lot of research on that you really believe has a bright future. If you’ve got $1,000 to spend on your big investment bets, maybe you only want to put $500 of it into Bitcoin and $500 into something else.

It’s not diversifying in the classic sense, but think of it like shopping for a treat for yourself. Do you want the $1,000 pair of shoes or a $500 sweater and a $500 bag?

Don't let your portfolio get dragged down by commission fees. Wealthsimple Trade lets you trade for $0 commission, and for a limited time, you can get two free stocks for signing up and funding your account. Will you get Apple stock? How about Air Canada?

Get your free stocks

Are you comfortable if the value goes to zero?

Compassionate elderly woman supporting upset stressed mature husband.
fizkes / Shutterstock

The recent hype around Bitcoin has centered on its big gains. That’s understandable — it was at about $12,000 for the bulk of July 2020, and at last check, in April 2021, it’s sitting at more than $68,000. It’s OK to be impressed and intrigued by that.

But risky investments like crypto are just that: risky. There’s no guarantee that Bitcoin will stay this high. Anyone who tells you otherwise is trying to sell you something.

It has gone way down before and it could go way down again.

Which is why you must ask yourself, “ If most or all of the value of these investments disappeared, would I be comfortable and — more importantly — financially secure?”

If the answer is yes, you’ll be able to weather the inevitable swings in value. If the answer is no, then you shouldn’t make the investment.

And if the answer is yes but becomes no at some point, that’s when you know it’s time to sell. If you had put $1,000 into Bitcoin back when it was sitting at $40, and managed to hold it till now, you’d have close to a million dollars. If that’s more money than you’d be willing to say goodbye to tomorrow, then you should sell some of the investment and put the proceeds into something more stable.

Yes or no? Should I invest in Bitcoin?

Angry man talking on phone.
fizkes / Shutterstock

There really is no one-size-fits-all answer to “Should I invest in cryptocurrency?” But hopefully you now have the tools to answer it for yourself.

And if you do, then maybe it’s time to open a Wealthsimple Trade account and make an investment with no guilt or apprehension whatsoever.

Invest with ease

From new investors to experts, Qtrade Direct Investing™ offers an intuitive experience with features including in-depth research and powerful tools.

Recognized by The Globe and Mail as a top-ranked broker for the 4th year in a row, you can count on Canada’s best online trading support for friendly and responsive client service and online self-help.

Get started today with no minimum investment and now get up to $150 sign-up bonus until June 30, 2023 with promo code BONUS150.

Division of Credential Qtrade Securities Inc.

What to Read Next


The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.