Crypto Investing: What You Need to Know
Cryptocurrency offers the potential for outsized returns, but comes with extreme volatility and risk. This calculator helps you model different scenarios so you can make informed decisions about how much to allocate and what outcomes to expect.
Why dollar-cost averaging matters for crypto
DCA means investing a fixed amount at regular intervals regardless of price. In crypto, this is especially important because the volatility is extreme. Buying $200/month means you automatically buy more when prices are low and less when prices are high. Over time, this typically results in a lower average cost per coin than trying to time the market.
How much crypto should you own?
Most financial advisors suggest limiting crypto to 1-5% of your total portfolio. More aggressive investors might go up to 10-20%. The right amount depends on your risk tolerance, time horizon, and whether you can emotionally handle watching your investment drop 50-80% without panic selling — because that will happen at some point.
Bitcoin vs Ethereum vs altcoins
Bitcoin is the most established cryptocurrency with the largest market cap and most institutional adoption. Ethereum powers smart contracts and DeFi. Altcoins offer higher potential upside but also much higher risk — many go to zero. A common allocation is 60% BTC, 30% ETH, 10% altcoins, which is what we show above.