Myth busting: Three things investors are still getting wrong about crypto

Cryptocurrencies have been around for over a decade but remain largely misunderstood by the investment community. In this article we dispel a few of the biggest myths surrounding crypto to help you assess the opportunities and risks.

Myth #1: “Investing in crypto is complicated and confusing.”

The prospect of dealing with digital wallets, private keys and unregulated crypto exchanges led many traditional investors to believe that investing in crypto was beyond them. The advent of crypto exchange-traded products (ETPs) in 2024 presents investors with a new avenue to access digital assets in a familiar investment vehicle.

With crypto ETPs, investing in digital assets such as Bitcoin has become as simple as buying shares of a stock. Investors can purchase Bitcoin and Ethereum ETPs through their regular brokerage accounts, just like any other security.  This eliminates the need to set up and manage cryptocurrency wallets on an exchange, making crypto accessible to a much wider audience. What’s more, these ETPs are regulated financial products, which provides an additional layer of security for investors. While there is certainly a lot of truth behind the old crypto adage, “Not your keys, not your crypto,” the popularity of crypto ETPs proves that self-custody doesn’t have to be the only way to own crypto exposure.

Myth #2: “It’s too late to invest in Bitcoin – I missed the run up.”

While Bitcoin has seen substantial price appreciation, the idea that it’s “too late” to invest is misguided. In reality, Bitcoin remains in the early stages of institutional and mainstream adoption, with significant potential for future growth.

At approximately $1.7 trillion, Bitcoin’s market capitalization is less than 9% of gold’s (~$19.4T) and an even smaller fraction of the stock, bond, and real estate markets. If Bitcoin continues gaining traction as a store of value, medium of exchange, or reserve asset, its market cap could expand significantly.

Bitcoin’s hard-capped supply of 21 million makes it inherently scarce—94% of all BTC has already been mined, and as much as 20% may be permanently lost. Meanwhile, Bitcoin’s issuance rate (block rewards) halves roughly every four years, meaning new supply is continually shrinking while demand grows, particularly from institutional investors.

The launch of BTC ETPs (exchange-traded products) just over a year ago has shattered records, with cumulative inflows exceeding $35 billion—the fastest-growing ETP launch in history. These products provide institutions and retail investors alike with regulated, seamless access to Bitcoin, accelerating mainstream adoption.

The recent US administration change has ushered in a markedly more favorable stance on digital assets. Policies that once hindered adoption are being reevaluated, opening the door for broader institutional participation. And, On March 2, 2025, the administration announced the creation of a crypto strategic reserve that would include five major coins—Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Solana (SOL), and Cardano (ADA). Additionally, 18 U.S. states are actively reviewing Bitcoin reserve adoption, while a total of 33 states are considering legislation to establish their own Bitcoin reserves. This underscores Bitcoin’s growing recognition as a legitimate financial asset.

Another major shift is the recent repeal of SAB 121, which removes a key regulatory hurdle and paves the way for banks to custody Bitcoin and digital assets. This could unlock significant institutional demand and further integrate Bitcoin into the financial system.

Bitcoin is still in the early innings of adoption. Its small market size relative to traditional assets, supply constraints, institutional momentum, and evolving regulatory landscape all suggest that the opportunity to invest is far from over. While past price appreciation is no guarantee of future returns, the narrative that Bitcoin’s best days are behind it ignores the broader macroeconomic and institutional trends at play.

Myth #3: “There are no fundamentals behind crypto.”

The claim that crypto lacks fundamentals stems from a misunderstanding of the digital asset space. It is true that there are millions of digital asset tokens in existence, with new ones being created around the clock. Many of these tokens are purely speculative, created for fun or as short-lived experiments with no underlying value proposition. However, dismissing the entire crypto ecosystem based on these examples ignores the small but significant subset of crypto projects and digital asset tokens that are deeply rooted in fundamentals.

For this opportunity set, we are talking about real teams building real solutions to real problems—often in ways that are only possible through blockchain technology. Tokens, in this context, serve as powerful incentive mechanisms that help bootstrap decentralized networks, align stakeholder interests, and facilitate governance and utility within an ecosystem. Just as equity ownership in a company provides financial incentives and voting rights, well-designed token economies create mechanisms for value accrual that can be analyzed and assessed.

When evaluating a digital asset investment, there are two critical factors to consider. First, the network, ecosystem, or application must generate real value for its stakeholders—whether by improving efficiency, reducing costs, enhancing security, or enabling entirely new business models. Second, the token must be designed in a way that allows value created within the network to flow back to the token itself. Without this, even the most promising projects will fail to translate their success into token appreciation.

These value accrual mechanisms can take many forms. Some tokens generate revenue from transaction fees, others distribute rewards to token holders, and some grant governance rights that influence the direction of a protocol or its treasury. The specifics vary, but the core principle remains: in a well-structured token economy, there must be a mechanism for value capture, just as in traditional financial markets.

Once identified, these fundamental drivers can be tracked, modeled, and analyzed using best-practice valuation frameworks borrowed from traditional finance. Intrinsic valuation models, such as discounted cash flow (DCF) or network adoption models, can be adapted to digital assets, while relative valuation approaches can compare tokens based on key performance metrics. These models not only help establish fair value estimates but can also be used to work backward and identify the assumptions necessary to justify a token’s current price.

At the end of the day, fundamentals exist in crypto just as they do in traditional finance. However, not all tokens have them—nor are they all meant to be invested in. For projects with real fundamentals, acquiring, verifying, and analyzing data can be more challenging than in traditional markets, but that doesn’t mean it’s impossible. With rigorous due diligence and the right analytical frameworks, investors can apply fundamental analysis to digital assets just as they would with equities, bonds, or other investment opportunities.