5 questions to consider before you choose high-risk crypto investments

5 questions to consider before you choose high-risk crypto investments

Published: June 1, 2026 by Jennifer Armstrong

Cryptoassets may not be regulated financial products so please be aware that trading them carries a considerable amount of risk for your capital. Cryptocurrencies are also not covered by existing consumer protection laws and are not suitable for the majority of investors.

Research shows a growing number of people are interested in investing in cryptoassets. However, as a high-risk investment, they’re not appropriate for everyone.

According to a survey carried out by Aviva (26 August 2025), 1 in 5 UK adults, the equivalent of 11.6 million people, have invested in crypto, and 27% said they could consider it as part of their retirement plan.

As cryptoassets can experience extreme volatility and lack the regulatory protection of traditional investments, they are typically considered very high risk. These five questions could help you assess whether they would be an appropriate investment for you.

1. Why are you interested in investing in cryptoassets?

Understanding why you’re interested in cryptoassets is important.

Crypto has featured heavily in the headlines over the last few years, and it can seem as though everyone has invested in the assets. As a result, the fear of missing out (FOMO) might be a motivating factor for some investors.

FOMO and other forms of financial bias could drive you to make decisions that aren’t right for you. Remember that, while cryptoassets may be suitable for other people, their circumstances and goals could be very different to yours. Instead of looking at how other people are investing, focus on your long-term goals and what’s appropriate for them.

43% of survey participants told Aviva they were motivated to invest in crypto because of the higher potential returns. While potentially higher returns are attractive, remember they are typically associated with higher risk.

2. Do you have an emergency fund?

Before you start investing, it’s often wise to take steps to improve your financial resilience in case you face an unexpected shock.

One option is to create an emergency fund. Usually, you’d place your emergency fund in an easily accessible cash account, so it’s available should you need it. It’s often recommended that you hold around six months of essential expenses in this account to cover your short-term needs if your income stops or you face an unexpected bill.

This is particularly important if you’re investing in volatile assets. If you sold assets during a downturn, you could lose money and miss out on the potential recovery.

3. How risky are your current investments?

Review your investments as a whole alongside your risk profile – for example, how diversified are your investments? If the majority of your investments are low-risk, you might be in a better position to invest a small amount in a higher-risk opportunity. In contrast, if you’re already exposed to high-risk investments, taking further risk to invest in crypto might not be right for you. Your financial planner can help you assess how a high-risk investment may fit into your wider strategy.

4. What is your capacity for loss?

As cryptoassets are a high-risk investment, you may want to consider what impact losing all or a portion of your money could have on your immediate finances. If you’re worried it could affect your financial security, it’s potentially a sign that high-risk investments are not right for you.

Your reasons for investing are also likely to play a role in your capacity for loss, so having a clear goal is important.

For example, if you’re investing to build a sum you can use to update your home, you might be more willing to risk losing the money than if your retirement depended on it.

5. Are you emotionally prepared for volatility?

Volatility can be nerve-racking. Seeing the value of your assets fall could make it tempting to take action rather than stick to your strategy, which might turn paper losses into real ones.

Consider how stressful you’d find extreme market movements and how you’re likely to respond when assessing if crypto is right for you. If you prefer stability, other assets might be better suited to your attitude to risk.

We could work with you to create an investment strategy

As your financial planner, we could help you create an investment strategy that’s aligned with your goals and risk profile. Please get in touch to arrange a meeting with a member of our team.

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Medical & General Financial Solutions Ltd