By Nic Riemer and Monaheng Ntsekhe
Introduction
Cryptocurrency has continued to gain popularity over the years, attracting investors due to the large potential returns and financial autonomy. Institutional adoption by companies like Tesla and PayPal has further legitimised crypto as an investment. In addition, regulatory adoption and clarity like Markets in Crypto-Assets Regulation (MiCa) in the United Kingdom, the Virtual Assets Regulatory Authority (VARA) in Dubai and closer to home, the inclusion of crypto assets in FAIS and the requirement for all Financial Service Providers to have a CASP licence to provide crypto services is helping to provide clarity where previously there was none.
Inflation concerns post the Global pandemic led many to view Bitcoin as a hedge against currency devaluation. Additionally, the accessibility of crypto trading, 24/7 market availability, and the rise of decentralised finance (DeFi) have attracted a growing number of retail and institutional investors. As more businesses, governments, and individuals recognize the benefits of digital assets, cryptocurrency continues to establish itself as an asset class that should not be ignored.
The current market landscape
In 2024 the United States (US) Securities and Exchange Commission approved the listing of several Bitcoin and Ethereum ETFs, enabling much wider regulated access to the asset class by retail and institutional investors alike.
President Donald Trump's administration has adopted a considerably more supportive stance towards digital assets. Key developments have included the establishment of a US Strategic Bitcoin Reserve in March 2025, the signing of the GENIUS Act to introduce a federal regulatory framework for stablecoins, and continued efforts during 2026 to provide greater regulatory clarity and integrate digital assets into the traditional financial system.
While Bitcoin prices remain heavily influenced by interest rates, liquidity and broader investor risk appetite, the shift towards a more crypto-friendly US regulatory environment has become an important factor for investors monitoring the asset class.
What is the investment appeal?
Despite the volatility within the asset class, the following factors appeal to investors:
1. Diversification
- Cryptocurrencies offer investors a means to diversify portfolios beyond traditional assets like shares and bonds. Including crypto assets in a diversified portfolio can introduce exposure to a wider range of risk and return drivers, with the potential to enhance risk-adjusted returns.
2. Inflation hedge
- Assets like Bitcoin, with a capped supply of 21 million coins, are viewed by some as potential hedges against inflation. Unlike fiat currencies (traditional currencies), which can be devalued through excessive printing, Bitcoin's scarcity can help preserve value over time. Inflation stemming from Covid-19 relief packages and the printing of money during the global pandemic helped propel this view.
3. Accessibility and liquidity
- Cryptocurrencies are accessible to anyone with an internet connection, enabling global participation. The 24/7 nature of crypto markets allows for continuous buying and selling, and seamless transferability of funds across boarders enabling flexibility for investors. In the same breath, this also contributes to the high volatility and risk within the asset class.
4. Technological innovation
- The underlying blockchain technology of cryptocurrencies offers transparency, security, and decentralisation. Innovations such as smart contracts and DeFi platforms are transforming various industries by reducing costs and speed to market, and attracting investors interested in cutting-edge technologies.
5. Potential for high returns
- Early investors in cryptocurrencies like Bitcoin and Ethereum have realised substantial gains. While the market is volatile, the potential for significant returns continues to draw interest from a broad spectrum of investors.
What should you consider?
Like any investment, analysing the fundamentals is key to achieving success. Unlike shares, Crypto assets do not have financial statements to analyse; however, there are other metrics to keep in mind:
- The platform and the type of digital wallet used to buy, sell and custody crypto: The first analysis should be on the platform utilised. Is it a centralised or decentralised exchange as both have their pros and cons. Unfortunately, fraud has been a prevalent topic within the crypto space and making sure a reputable platform is used, is top priority.
- Utility and use case: The real-world application of a cryptocurrency is crucial in determining its long-term value. Things to consider: Does the project solve a real problem? Is it widely adopted or integrated into industries? Does it enable DeFi? For example, Ethereum provides smart contract functionality, making it foundational for many blockchain applications, whereas Bitcoin is seen by some as a digital gold and a store of value. Avoid getting swept up in the pump and dump meme coin frenzies, stick to coins that have a long-term use case and are backed by solid technology and reputation.
- Total supply and circulating supply: Some cryptocurrencies, like Bitcoin (21 million max supply), have limited availability, making them disinflationary. Others, like Dogecoin, have unlimited supply, affecting their long-term value. It is important to understand the supply of the crypto asset invested in, as the more limited the supply the greater potential of price appreciation over the long term.
- Adoption and real-world use: Are major companies using or investing in the project? Are institutional investors involved? Does the project have real-world adoption, like payments, DeFi, or gaming? These are key questions to ask, as this will assist in avoiding "memes" or "fad" coins and sticking to the crypto investments that have a future.
In closing
With the increase in popularity of cryptocurrencies, it's important to understand the asset class as an investor and gain exposure in the correct manner. Crypto has proved that it is here to stay and with it comes opportunities for investors to benefit. Like all investments, don't bet the house on a single asset class no matter how tempting, rather invest in a basket of assets. Stick to the fundamentals and stay the course with your investment strategy. Only change positions if fundamentals have changed, not heightened volatility.
