Is It Too Late to Get Into Crypto?

On social media, there is an increasingly popular idea that the best days are behind for the crypto sector. Aside from the flash crash on Oct. 10, it seems that many investors are simply a bit bored due to the relative lack of volatility during the past 12 months or so. Others believe that the major financial institutions adopting key crypto assets like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) are a guarantee that the upside associated with crypto's roller-coaster-like performance is a thing of the past.

So, is it too late to get into crypto for someone who doesn't yet own any?

Image source: Getty Images.

Why it's not too late

One overriding fact that many investors seem to be losing sight of in this discussion is that the backdrop has changed dramatically in their favor during the past couple of years.

In 2025, exchange-traded funds (ETFs) for the largest assets like Bitcoin and Ethereum meant that regular investors have a simple and regulated way to get exposure to crypto via their brokerage or retirement accounts, and the ETFs also gave financial institutions a clean mandate to allocate funds to the sector. On Oct. 17, the Securities and Exchange Commission (SEC) gave the green light to a spot Solana (CRYPTO: SOL) ETF, indicating that the access routes to crypto are continuing to become wider and easier to traverse than ever before for the biggest assets.

In other words, large amounts of capital can now flow into crypto, which is going to keep exerting a positive pressure on price for as long as it continues.

But what about the talk that less volatility as a result of institutional participation means that crypto's returns will be lower forever?

The first thing to note is that investors aren't imagining anything; at least in the case of Bitcoin, volatility has indeed fallen as a result of the asset's institutionalization.

Nonetheless, let's keep volatility in context; look at this chart showing eight of the leading cryptocurrencies during the past 12 months:

SPY Total Return Level data by YCharts.

As you can see, all but one of the top-eight cryptocurrencies (not including stablecoins) by market cap substantially outperformed the stock market's returns during the past 12 months -- and the stock market has been having an unusually good run despite some serious hiccups along the way.

So even if crypto's volatility is declining a bit, it still can potentially deliver outsized returns. Overall, there isn't much reason to suspect that the process of value generation inside the sector is slowing down.

Be selective

It isn't too late to get into crypto.

But you will need to be disciplined, do your research, and be cautious about which assets you commit to. Straying outside of the top-15 assets by market cap (excluding stablecoins) is risky. And appreciate that higher risk does not guarantee an asset will yield higher returns.

Bitcoin belongs in every crypto portfolio as a hearty allocation, perhaps as much as 50%, and for many investors, it could be the only coin they hold. The idea is to accumulate it slowly via dollar-cost averaging (DCA) and then never sell until many years have passed and its scarcity has powered big returns. If you're just looking to get a small amount of exposure to crypto and you don't want to make a whole separate crypto portfolio, consider allocating between 1% and 5% of your portfolio's value to the coin over time via an ETF.

Ethereum, on the other hand, is the programmable smart contract network that has a deep decentralized finance (DeFi) ecosystem, including assets that handle real-world asset (RWA) tokenization, as well as the crypto sector's biggest single repository of stablecoins. If you don't know what those things are just yet, don't worry. Buying a small amount of the coin (1% of your overall portfolio) and then using it as a springboard to explore all of the different segments in its ecosystem (and to pay gas fees along the way) is a great way to learn, and I highly recommend doing it if you have any plans to invest in crypto over the long term.

In contrast, Solana is a competitor to Ethereum that offers much lower costs, faster transaction times, and higher throughput, with growing mainstream distribution. It's worth an equally sized allocation as Ethereum, and you're meant to hold it for exposure to growth in crypto applications which require fast speeds or inexpensive transactions at mass scale.

You could also get started in crypto by buying a few of the other major coins or some other altcoins rather than the three discussed above. But I don't recommend it until you're significantly more experienced in the sector. Some of the alternatives -- even some of the ones with billions and billions in market cap, like Dogecoin -- lack a strong investment thesis or have problematic connections to illegal activity.

Stick with the main pillars, and you will benefit as the crypto financial system grows for years to come.

Alex Carchidi has positions in Bitcoin, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.