Crypto investing for the masses is one step closer

However, their prices remain volatile, with swings of more than 10 per cent for bitcoin in a single day not uncommon.

Andrew Hewison, a financial planner and managing director of Hewison Private Wealth, says regardless of whether you believe cryptocurrencies are a good investment, what is not up for debate is their unpredictability.

Those investing in crypto should only invest what they can afford to lose, Hewison says.

“From an asset allocation perspective [crypto] sits firmly in the high-risk area of an investor’s portfolio and would be categorised in the ‘alternative’ asset class,” he says.

“Diversification is key. I would advise ensuring that your goals and objectives can be satisfied from the core nucleus of your portfolio, over and above the sum you choose to invest in crypto ETFs,” Hewison says.

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Leonard Gennusa, a financial planner with Fitzpatricks Private Wealth, says crypto prices have experienced much wider fluctuations than traditional assets, such as stocks and bonds – including some dramatic short-term drops.

“The sudden price movements can encourage impulsive buying or selling,” he says.

However, crypto enthusiasts say prices tend to move independently of other asset classes, helping to further diversify an investment portfolio.

Financial planners at Fitzpatricks Private Wealth do not recommend crypto as an investment for their clients.

Still, Gennusa recognises that some clients have a higher tolerance for risk, and are looking for opportunistic investments on the speculative end of the spectrum.

“We recommend anyone considering any investment should consider all their needs and objectives before they commit to any investment,” he says.