December 9, 2025
I’m just your average Gen X’er who still enjoys rocking a good flannel and bragging about how I survived the Y2K panic, the dot-com bubble, and the housing crash….but investing in cryptocurrency? I thought if I ignored it long enough, it would just fade away like all the other “investing” fads (some of us had friends who were betting on Beanie Babies).
Fast-forward to now, and my Gen Z son is out here dropping lines like “HODL your Bitcoin or FOMO into $TROLL”. So, with an ounce of curiosity to spare, join me in a quick review of the basics of investing in cryptocurrency. At the very least, you can “vibe with” the zoomers when they are sharing investment strategies at your next family gathering during the holidays!
What is It?
Cryptocurrency is digital currency that’s bought, sold and stored electronically. It can be used as an alternative payment method or held as an investment. The underlying technology is blockchain — a decentralized, shared ledger that records transactions and tracks asset ownership using cryptography and consensus protocols, providing robust protection against fraud.
Because cryptocurrency doesn’t rely on banks, governments or other authorities to process or verify transactions, it offers several significant benefits. These include speedier transactions, lower cost, higher security and greater privacy than traditional currencies.
Which One Should You Choose?
There are thousands of cryptocurrencies to choose from — including bitcoin, ether (on the ethereum platform), litecoin and dogecoin, to name a few. As with other investments, research their track records, the reputations of the teams behind them and the exchanges they’re listed on. Some platforms provide additional benefits, which may enhance a cryptocurrency’s value. For example, ethereum and certain other platforms support “smart contracts,” which facilitate secure, efficient transactions without the need for an intermediary.
It’s also important to consider your goals for the investment. Are you looking for it to appreciate in value? Will you use the cryptocurrency to conduct transactions? Are you hoping to generate income? Some cryptocurrencies allow “staking” — locking in your investment for a fixed period of time to help support the operation of the underlying blockchain — in exchange for more cryptocurrency. It’s a little like earning interest on a CD.
Where Can You Buy It?
There are several ways to invest in cryptocurrency, including through:
Cryptocurrency exchanges generally are easy to use and offer the widest selection. But they can be a bit riskier because the volume of funds and assets that flow through them makes them desirable targets for hackers. Other options include decentralized exchanges and peer-to-peer transactions, which may offer lower costs and greater security. However, these exchanges typically are less user friendly. Whichever option you choose, be sure to familiarize yourself with their fee structures.
How Should You Store Your Cryptocurrency?
Technically, your cryptocurrency resides on the blockchain, but access to it requires a “public key” and a “private key.” Think of the public key like a bank account number and the private key like the password you use to access your bank account online. Data on the blockchain is anonymous, so your private key is the only proof of ownership you have. Lose it, and you lose your cryptocurrency. To safeguard your cryptocurrency, therefore, you need a crypto “wallet,” and there are several options to choose from.
Custodial wallets are managed by the exchange or other platform where you purchase cryptocurrency. There’s no need to keep track of your private keys, but if there’s a security breach or a hacker obtains your login credentials, your cryptocurrency may be at risk. Non-custodial wallets offer greater protection against hackers, but they require you to take responsibility for storing your keys. Options include hardware wallets, such as PIN-protected USB drives, and online wallets. Hardware wallets are least accessible to hackers but can be lost or misplaced. Online wallets provide easy access via the cloud, but are generally riskier.
Handle With Care
Cryptocurrency can be an attractive investment, but given the risk, it should account for only a small portion of most portfolios. In addition to the risks previously described, there are also tax issues to consider. For example, certain blockchain events may trigger taxable income even if you haven’t engaged in any cryptocurrency transactions.
© 2025
Hobe & Lucas Certified Public Accountants, Inc. is a full-service accounting and business consulting firm dedicated to providing clients with exceptional value.
Upload 8879 Make A Payment
Advisory Services offered through Avantax Planning Partners, Inc., a registered investment adviser. Securities may be offered through Cetera Wealth Services, LLC, member FINRA/SIPC. Additional advisory services may be offered through Cetera Investment Advisers LLC. Cetera named entities and Avantax Planning Partners, Inc. are affiliated. 3390 Asbury Rd, Dubuque, IA 52002. 563-582-2855.
Check your Financial Professionals registration status on https://brokercheck.finra.org/ and/or https://adviserinfo.sec.gov/.
Cetera named entities and Avantax Planning Partners, Inc. are independent of and unrelated to Hobe & Lucas Certified Public Accountants, Inc.
