TIME to buy the cryptocurrency dip? Many think so, after watching others seemingly reap instant rewards as Bitcoin surged in December and January amid optimism over “pro-crypto” US President Donald Trump.
February’s slide and March’s side-winding wiggles are no matter to crypto bulls – they envision a massive surge ahead. Tempted to follow? Slow down. Ask yourself: “Why should I own it?”
Here is a clear-eyed look at the pluses and minuses.
It is not just America. Singapore has lured crypto firms for years, dishing out 13 new crypto operating licences last year. The Monetary Authority of Singapore’s Project Guardian and Global Layer One programmes are paving the way for more. The Singapore Exchange’s “Bitcoin perpetual futures” – targeted at professional traders – will debut later this year.
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Singapore is not alone. Virtually every global financial hub vies to be crypto’s capital. Hong Kong has over 1,100 crypto-tilted fintech firms, up five-fold from 2017. Britain’s Labour government aims to bolster London’s status. Switzerland’s 2021 crypto framework fostered a booming startup landscape. Japanese regulators mull crypto tax reform and Japanese Bitcoin ETF (exchange-traded fund) approval, while its central bank plans cryptocurrency XRP integration.
But what is the case for you to own crypto? Some say it diversifies, guarding against risks to normal currencies or assets. Or hedging inflation. Since Bitcoin supply is capped at a now-approaching 21 million, bulls believe it cannot be endlessly devalued like US or Singapore dollars. Plus, many Bitcoins are lost, likely forever, reducing total supply.
Yet this simply ignores that crypto supply, overall, is completely infinite. Think Ethereum, Dogecoin, XRP, Trump’s new coin – and more to come. They all defray demand, raising questions about which will survive long term. Trump’s “Memecoin” nosedived after its launch, illustrating crypto’s fickleness. It is also why his talk of including several coins beyond Bitcoin in America’s reserve helped trigger falling prices.
Still, many bulls simply tout giant gains. Since 2010, Bitcoin soared 159 per cent annualised through 2024’s close. It rose 136 per cent in 2024. It climbed 19 per cent from America’s election through March despite recent volatility. Explosive!
But huge surges pair with deep crashes. In rolling 12-month spans this decade, Bitcoin returns ranged from 2,151 per cent to minus 81 per cent. It unpredictably booms and bombs.
In just one decade, Bitcoin has seen multiple stock crashes the size of the one in 1929-1932 that resulted in the Great Depression. Poor timing can sink you.
What drives these swings? Not fundamentals – crypto has none. No industrial uses, profits, sales or yield. The industry is rife with fraud, money laundering and theft – as February’s Bybit hack, crypto’s largest ever, showed.
The Singapore Police Force says that crypto underpinned a quarter of the city’s S$1.1 billion scam losses in 2025. And that says nothing of America’s famous FTX fraud.
Also, most “coins” are vastly too volatile to be actual currencies. Yes, there are stablecoins – those pegged to a major currency – which overall swing less.
But “stable” isn’t always so stable and regulatory haze abounds; the Monetary Authority of Singapore is currently assessing how stablecoins should be classified on bank balance sheets, for example.
Inflation hedge? No. The 64 per cent Bitcoin drop in 2022 came as Singapore’s inflation galloped to 7.5 per cent year on year and America’s hit 9.1 per cent. Bitcoin failed its only inflation hedging test.
So, what explains crypto’s swings? Others’ demand shifts, full stop. Pure sentiment swings.
Can you time crypto investors’ mood swings? I cannot. And if not, can you really hang on long term if Bitcoin nosedives again?
Many newborn Bitcoin bulls are learning this lesson after piling in early in 2025 only to see a steep slide immediately thereafter. Will spring bring a rebound? Or a bigger bust? Who knows! Can you really know now?
Emotions do not help. With volatile assets, investors often buy after big gains – like in 2024 – on fear of missing out. When prices fall, they sell from fear of holding on, locking in losses.
I have watched investors repeat this human folly in volatile commodities and stocks for 50 years. Crypto is stock market volatility on serious steroids. Can you really stomach all that?
The writer is the founder, executive chairman and co-chief investment officer of Fisher Investments, an independent investment adviser serving both individual and institutional investors globally
