Cryptocurrency has been around for a while now, and you or people around you may have seen it pay off in big ways. Maybe you’re in it for the long haul because you believe that’s where the future of money is going. That conviction isn’t wrong — but when most of your money relies on one asset that’s known for dramatic swings, the stakes get a lot higher than they need to be.
Going all-in on anything — crypto or otherwise — is a risk. It causes your portfolio to have a shaky base, and leaves your money potential up to chance rather than consistency and time-tested strategies.
The highs are real. So are the lows.
Crypto's volatility is part of what makes it exciting. The potential for big returns is exactly why so many people are drawn to it. But that same volatility cuts both ways — and when crypto is your only investment, every dip hits harder than it should.
Between 2021 and 2022, Bitcoin's value dropped by more than 60%. If that's your only asset, that's not just a portfolio problem — that's your emergency fund, your rent, your retirement all tied to one outcome. Without a financial foundation underneath you, there's nothing to catch you when the market swings the wrong way.
The case for diversification
Diversification isn’t a way of saying crypto is bad. It’s a way of making sure one bad year doesn’t wipe out everything you’ve worked hard for.
Instead of putting all your eggs in one basket, diversification help spread them across several. Your money gets distributed across different stocks, bonds, and ETFs — so when one part of the market takes a hit, the rest can help. Crypto can still have a seat at the table. It just doesn't have to be the whole table.
How to keep the upside without risking everything
You don’t have to choose between crypto and building long-term wealth. The two can coexist with the right balance.
- Start with a diversified base. An Acorns Invest account puts your money into an expert-built, diversified portfolio of ETFs across stocks and bonds. It's not flashy, and there's no dopamine hit — but it’s what can compound quietly in the background while you keep your eye on crypto.
- Keep investing consistently. Round-Ups® and Recurring Investments automatically get invested to your diversified portfolio, without you having to think about it. Let crypto be the exciting part. Let this be the part that builds your foundation.
- Treat crypto as a part of your portfolio, not your entire portfolio. A good rule of thumb from most financial experts is to keep high-risk assets to a manageable portion of your overall portfolio. That way, even if crypto has a rough year, the rest of your money is still working for you.
FAQ: Balancing Crypto and Traditional Investing
Can I still invest in crypto if I want a diversified portfolio?
Yes. You can actually do both with Acorns. You can add a Bitcoin-linked ETF to your already-diversified Acorns Invest portfolio — giving you exposure to crypto while keeping your financial foundation in stocks and bonds. Depending on your portfolio type, up to 5% of your investments can be allocated to a Bitcoin-linked ETF, so you get a piece of the action without betting everything on it.
What is the benefit of a diversified portfolio over crypto alone?
A diversified portfolio reduces the impact of volatility by spreading your money across different sectors and asset types. While a single asset like Bitcoin can move dramatically in a single day, a mix of stocks and bonds across thousands of companies rarely swings in such extreme unison — which gives your money a diversified approach to grow over the long term.
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For informational purposes only. Strategies and investments discussed may not be suitable for all investors. Contents of this article have been generalized and should not be considered investment advice, a recommendation, or be construed as an offer or solicitation to buy or sell an interest in any specific security. Information contained herein has been obtained from sources believed to be reliable; however, the accuracy cannot be guaranteed and is subject to change without notice. Investing involves risk, including the loss of principal. Please consider your objectives, risk tolerance, and all fees before making any investment decisions.
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