The crypto market is highly volatile and fulfilling. In terms of trading, two days in crypto are equivalent to two months in stocks. Crypto is a fast-paced, breadth-taking market, where you experience different feelings during a single day. There are days when Bitcoin declines 20%. When that happens, crypto holders just stay quiet and wait. It happened many times before and it will happen many more in the future. It's part of the game for a nascent asset class, which no one knows how to value correctly. If the S&P 500 declines 7% in a single day, the market stops trading and the Fed will approve a multi-billion liquidity package the next day to stop the bleeding...
Crypto is based on the blockchain. It's a new way of living and doing business. It's not a new product or service but a complete redesign. Crypto represents a whole new way of doing things and the future will go through it. But, in the meantime, no one knows its value. Much because it changes every day. Unlike a traditional stock, which can be valued based on the expected future cash flows, crypto doesn't deliver any cash flows to the holders. These holders have no voting or ownership rights. They expect to profit from the increase in usage of crypto, which turns it more valuable. Like a growth stock, a crypto token derives most of its value from stories and feelings about its future and potential. To some extent, part of the value comes from sentiment, which changes quickly, and then imparts wild price changes.
Despite the volatility, I think crypto, as a market, is here to stay. There are many ifs but the largest projects will survive and thrive over time. It's not only about Bitcoin, but also about Ethereum, Solana, Cardano, Avalanche, Chainlink, among many others. These are very sound projects that are growing fast and that will likely see its usage increase exponentially. As the value of the tokens increases with usage, many of these tokens will see prices rise substantially. At this point, according to CoinMarketCap, total market capitalisation amounts to \$2.3 trillion with more than 15,000 cryptos listed in exchanges. Bitcoin has a market cap of \$927 billion and represents 40% of the market. To put things in perspective, the market cap of Bitcoin is similar to that of Tesla and the total market cap is on par with Microsoft. As a whole, the crypto market is still very small when compared with the stock market. Crypto needs to grow to attract more institutional investors but also needs institutional investors to grow. Thus, the market needs time for a catch-up. For now, given its small size, it is exposed to some price manipulation. Some so-called whales are able to drive prices their way, at times. The same applies to brokers, if they wish to. But, this manipulation power, let's call it that way, will tend to disappear as the market grows.
Anyway, from the perspective of a small, retail investor, crypto is attractive, no matter its weaknesses and challenges. A diversified exposure over a prolonged period is what is needed to reduce the variability of returns. Over a period of two to three years, any shocks will look small and it wouldn't matter anymore that Bitcoin once declined 20% in one day. And remember that you don't need to put your house at stake. Just dedicate a share of the equity part of your portfolio to crypto.