THE SANE PERSON'S GUIDE TO INVESTING IN CRYPTOCURRENCY

THERE HAVE ALWAYS been plenty of reasons for prudent investors to steer clear of the crypto markets.

- JEFF JOHN ROBERTS

Most obviously, there are the rampant, ongoing, and widely publicized scams. These contribute to bouts of wild volatility that have led the entire market to plummet more than 80% on numerous occasions. There is also crypto’s precarious legal status: The latest big rally, which saw Bitcoin hit $109,000 in January, fueled by President Trump’s promises of lighter regulation, underscores how an asset designed to exist outside government remains, ironically, highly subject to political whims.

But against all this, would-be investors must weigh an equally compelling factor: Bitcoin, the biggest digital currency, is one of the very best-performing assets of the past decade, easily eclipsing gold and the S&P. Its price has climbed from $325 in January 2015 to its peak early this year—a roughly 300-fold increase. (One way to silence someone who's boasting about their Nvidia stock? Tell them you bought Bitcoin 10 years ago.)

Despite Bitcoin’s repeated and spectacular crashes, its floor keeps rising. Each recent deflation of a bubble has reset that floor a little higher. Most recently, recession fears have undercut Trump-fueled exuberance and driven Bitcoin down from its six-figure highs—but as of mid-March, it was still well above $80,000.

So how should the casual investor navigate all this? Is there a rational way to get exposure to the upside without losing one’s shirt to the inescapable volatility?