Everyone has an opinion on Bitcoin. Your colleague got rich. Your uncle lost everything. You read it will hit a million. You read it's a scam.
The reality, as usual, sits somewhere in the middle. And before you put a single cent into crypto, there are things you need to know — things nobody will tell you when they're trying to sell you something.
What crypto actually is, without the jargon
A cryptocurrency is digital money that operates on a decentralised network — meaning no central bank or government controls it. Bitcoin was the first, created in 2009 by someone using the pseudonym Satoshi Nakamoto.
Its value doesn't come from any underlying physical asset. It comes from trust, programmed scarcity (only 21 million bitcoins will ever exist), and perceived utility.
That doesn't make it useless. But it makes it radically different from a stock or a property.
The volatility is real — with numbers
Bitcoin reached nearly $69,000 in November 2021. By June 2022, it was below $18,000. A drop of 74% in seven months.
If you had €10,000 invested at the peak, you had €2,600 seven months later.
This doesn't happen once. It happens regularly. Bitcoin has dropped more than 50% at least five times in its history.
The golden rule
Only invest in crypto money you are willing to lose entirely — 100%.
This isn't pessimism. It's the only mental framework that protects you from catastrophic decisions. If you invest €500 and lose it all, your financial life doesn't change. If you invest your emergency savings and the market collapses, the impact can be devastating.
Many experts suggest crypto should represent no more than 5% of your total portfolio. Some say 1–2%. Never more than 10% — unless you are consciously accepting high speculative risk.
Bitcoin and Ethereum: the base, if you invest at all
Thousands of cryptocurrencies exist. The vast majority are high-risk speculative bets or outright schemes. If you want sector exposure, start with the two that have the longest track record and widest adoption:
- Bitcoin (BTC): the digital store of value. Crypto's "gold". Supply capped at 21 million units.
- Ethereum (ETH): a programmable network that runs smart contracts and decentralised applications. More technical, more complex — but with real utility and growing adoption.
Avoid coins created 6 months ago, promoted by influencers, or promising guaranteed returns. They are almost always traps.
The most common mistakes — and how to avoid them
FOMO: buying when everyone is talking about it
When Bitcoin is on the evening news and your barber says he bought in, the peak has already passed or is near. Smart money enters when nobody cares — not when everyone is euphoric.
Leverage: borrowing money to invest in crypto
It's the fastest way to lose everything. Don't do it. Ever.
Leaving everything on an exchange
Exchanges like Binance or Coinbase are convenient, but historic collapses have happened — like FTX in 2022, which left hundreds of thousands of people locked out of their funds. If you hold significant amounts, consider a hardware wallet — a physical device that stores your private keys offline.
How to store crypto safely
The best-known hardware wallets are Ledger and Trezor. They cost between €60 and €150. If you hold more than €1,000 in crypto, the cost is easily justified.
The most important phrase in crypto: not your keys, not your coins. If you don't control the private keys, you don't own the coins.
My honest position
I hold a small allocation in Bitcoin. It's not the foundation of my financial strategy — that's built on global index ETFs. Bitcoin is a speculative bet that may go well or badly. I know that. And I don't put more into it than I can afford to lose.
This is the only sensible approach for the vast majority of people.
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