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Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.

This week’s episode starts with a discussion about cryptocurrencies coming to Fidelity 401(k) plans.

Then we pivot to this week’s money question from a listener’s voicemail. Here it is:

“Hey, this is Ben from Memphis. I just wanted to know what is the best cryptocurrency to invest in right now? Thanks.”

Check out this episode on any of these platforms:

Our take

Fidelity, the largest 401(k) provider, recently announced that some participants will soon be able to invest in Bitcoin through their 401(k) accounts. But that doesn’t mean the cryptocurrency is coming to your retirement account. If you can invest in a 401(k) through your employer, it will have to sign on first. And even if it does, Fidelity won’t let you invest more than 20% of your contributions into Bitcoin, and your employer could set an even lower limit.

This is all to say: Temper your expectations and try to see past the hype. (Note that Fidelity is one of NerdWallet’s partners, but that doesn’t affect how we talk about it.)

While cryptocurrencies — including Bitcoin — are the investment du jour, think hard about whether it’s right for you. These tend to be volatile investments. But if you are set on investing in cryptocurrency, dig into what you want out of the investment to determine which crypto might be the best for you right now. Are you interested in the underlying technology that supports crypto? Do you want to diversify your portfolio? Or are you just looking for a short-term investment? Answer these questions before choosing one crypto to invest in.

Once you’ve determined which crypto checks your boxes, know how to go about actually investing in it. That usually means using a cryptocurrency exchange. These platforms work similarly to an online broker: You make an account, put some money in, then buy the cryptocurrency that you want. There are a number of cryptocurrency exchanges, so shop around to find the best one for your needs.

Our tips

  • Learn crypto basics: Understand what crypto is before you buy it.
  • Get comfortable with volatility: There’s no guarantee that any single crypto asset will gain value over time.
  • Don’t overdo it: Crypto should at best be a small part of your overall investment portfolio.

Have a money question? Text or call us at 901-730-6373. Or you can email us at To hear previous episodes, go to the podcast homepage.

Episode transcript

Liz Weston: This time, we’re talking about crypto. Welcome to the NerdWallet Smart Money podcast, where we answer your personal finance questions and help you feel a little smarter about what you do with your money. I’m Liz Weston.

Sara Rathner: And I’m Sara Rathner, filling in for Sean Pyles. Let the Nerds answer your money questions. You can call or text us at 901-730-6373. That’s 901-730-NERD. Or email us at

Liz: Follow us wherever you get your podcast to get new episodes delivered to your devices every Monday. And if you like what you hear, please leave us a review and tell your friends.

In this episode, we’ll tackle a listener’s question about which cryptocurrency is “the best.” But first, in our This Week in Your Money segment, Sara and I are talking about Fidelity’s recent announcement that it’s going to offer crypto in its 401(k)s.

Sara: First, some disclaimers. We are not investment professionals, and we won’t tell you what to do with your money. Also, Fidelity is one of NerdWallet’s partners, but that doesn’t affect how we talk about it.

But, wow, this is big news.

Liz: Yeah, it really was. Fidelity is the largest 401(k) provider. It has over 20 million participants. And it’s the first to add crypto, which it says it’s going to do by the middle of this year.

Sara: Unless the Department of Labor steps in and then stops it.

Liz: Well, we’ll talk about that in a minute.

Sara: There are multiple filters, so to speak, that this news has to pass through before it gets to you, the individual worker, who is saving for your retirement, who’s listening to this podcast.

First, your employer has to offer a 401(k), which many don’t. It’s not something that especially smaller companies offer their employees. I read somewhere that roughly half of American workers don’t have access to a 401(k) through their employers.

Filter No. 2: Fidelity has to be your 401(k) provider. And not every company uses Fidelity.

Then, filter No. 3 is your employer has to actually add that to the provisions of your plan. Every employer works with these different 401(k) providers to pick and choose what offerings they provide to their employees.

Liz: The other filter you mentioned was the Labor Department. They came through, and they were not happy about this.

Sara: That could provide a little bit of tasty drama to make this news a little bit more exciting.

One other thing to think about is right now Fidelity has stated that they won’t let you invest more than 20% of your contributions into crypto. And then your employer can set a lower amount. So that’s the last of the filters: Even if you’ve made it through all the other filters, your employer might say, “Well, no more than 10%.”

So we already, in doing this, have cut out a lot of workers, so it really depends. Obviously, if it’s something you’re interested in and your employer does not seem interested in it, maybe you can talk to your benefits person at work and say, “Hey, could this be an option for us?”We live in a time where employees are exercising their rights and talking back. So why not use this as a time to do that as well, right, and get the benefits that you want at your company?

Liz: But let’s talk about how much of your portfolio. If you go through all these filters, and it is an option for you, and let’s say your employer decides to let you put as much as 20% in, is that a good idea, Sara?

Sara: As always, my answer to a lot of these questions is, “It depends.”

Liz: Yes.

Sara: Because it depends on you and your retirement time horizon, and your appetite for risk, and your ability to sleep at night if the value of your 401(k) just drops really dramatically, like a roller coaster. That is a highly individual decision.

But what I can say is some rules of thumb that, at NerdWallet, we recommend: No more than 10% of your total investment portfolio be in so-called alternative investments, like cryptocurrency. So think about the whole universe of all of your investment accounts, not just a 401(k), but you might also have an IRA or another type of retirement account separately. And you might also have taxable brokerage accounts that you also invest in. So think about your total portfolio, and then consider how your retirement contributions fit in with all of that.

Liz: I think this could be another step toward mainstreaming cryptocurrency. However, right now, they’re only offering one cryptocurrency, and that’s Bitcoin. So, that’s probably the one that most people know, but is this going to be the cryptocurrency that survives the long run? We don’t know. There’s lots of different cryptocurrencies. They have a lot of different purposes and a lot of different reasons to invest in them or not.

This is something that you really want to be careful with, because you’re concentrating your risk. Crypto is risky by itself, and then if you’re just buying one cryptocurrency, that’s concentrating the risk even further. So in some ways, I’m excited about this. It’s kind of cool. In other ways, it’s like, I could really see this going south.

Sara: Yeah, I mean, on the one hand, it does make investing in crypto administratively easier on the individual. Employer-sponsored retirement plans are often people’s first forays into investing. So this could make it easier to understand for a lot of people.

Because investing in crypto — yes, you could just do it from your phone, a couple taps in, and suddenly you’ve bought crypto — but it can be very intimidating. So this might lower that barrier for a lot of people.

Liz: It could be a way to just get a taste of this. But I just was talking to a young friend who was really worried about the stock market. And she was like, “OK, I’m going to sell some of my stocks and get crypto instead.” It’s like, “No, no, no, no, no.” If you’re worried about the volatility of the stock market, just wait. See what happens with your crypto.

We have a long history with stocks. We understand that a diversified mixture of stocks is going to do pretty well over the long term. We don’t have that assurance with cryptocurrency. We don’t know which one’s going to prevail or which one’s going to go for the long run. So if you’re talking about ups and downs, and you’re worried about that, crypto is not the way to go. If, however, you want to just take a taste, have a little bit, that makes more sense.

Sara: You hear the phrase “speculative investment” a lot when you ask people about crypto. It’s still very much thought to be that. It’s still very much thought to be kind of on par with gambling, whereas investing in general gets this bad rap of being like gambling. But because we have decades — and in some cases, over a hundred years — of data about how companies have performed, it’s less like gambling if you are thoughtful about it.

Liz: And diversified

Sara: And diversified, yes.

Liz: You can invest in companies that are investing in blockchain, which is the technology behind crypto. And that’s another way to get a little piece of this.

So there’s a lot of different ways to do it. You don’t have to feel railroaded or feel like you’re going to have to do this, even if it comes to your 401(k). And as we’ve said, it might not necessarily do that.

Sara: Yeah. And I would say, with crypto, in terms of the mentality of the whole culture around it, there is this obsession with the FOMO, the fear of missing out.

Liz: Yes.

Sara: Anytime there is that urgency that you have to act now or you’re going to miss out, honestly, that kind of makes my skin crawl a little bit when it comes to investing, because it’s a long-term proposition, potentially, when you’re investing.

Typically, we don’t recommend any money that you need in the next five years or so to be invested, because you need that money liquid. You need it accessible to you without taking on any sort of financial penalty for pulling that money out. But when you’re investing for the long term, it’s not about “I have to do this now, or else I’m going to miss out.” It’s OK. You can take your time. Put a little bit of money away every month into different things, and just see where it goes. You don’t have to freak out and act now. This is not an as-seen-on-TV advertisement. This is your money, and this is your life, and you should be very thoughtful with both of those things.

Liz: We have a lot of information here at NerdWallet to help you educate yourself about cryptocurrency and blockchain technology if you’re interested in it. So come to the site, we’ll have some links in our show notes.

Before we move on to this episode’s money question segment, we have a call out for all the parents that listen to Smart Money. We’re working on a new series about the cost of child care. And we want to know: How are you paying for child care? Where does it fit in your budget? And have you had to make other sacrifices to make these costs work? Call in to our hotline at 901-730-6373, or email a voice memo to, and tell us how you’re making child care costs work for you and your family.

Sara: All right, now let’s get to this episode’s money question.

Liz: All right, sounds good.

Listener: Hey, this is Ben from Memphis. I just wanted to know what is the best cryptocurrency to invest in right now? Thanks.

Sara: To help us answer our listener’s question, on this episode of the podcast, we are joined by NerdWallet crypto writer Andy Rosen. Welcome to the podcast, Andy.

Andy Rosen: Thanks for having me.

Liz: OK, before we start, we need to mention that we are not financial or investment advisors, and because everybody’s financial situation is different, this information is not personalized.

But, Andy, you’ve been explaining cryptocurrency to your mother, to your aunts, to your uncles, so we figure you probably can explain it to us. Let’s start with the basics and tell us: What is cryptocurrency?

Andy: So, cryptocurrency can be a lot of different things. But there’s one thing that you should remember when you’re thinking about cryptocurrency and what makes it different. Essentially, cryptocurrency is based on a technology called blockchain, which allows you to own a digital file and makes it hard to recreate or use without the permission of the person who owns it.

A lot of products are being built on this technology. What you’ve probably seen is Bitcoin, which is the largest and really the first cryptocurrency, and that was invented to make peer-to-peer payments possible. However, most of the time, Bitcoin and a lot of the other popular cryptocurrencies are used less as a medium of exchange and more as an investment or a store of value, because people are buying it for its growth potential.

Sara: So you mentioned Bitcoin, which is one form of cryptocurrency, but there are a lot of others. So how would you answer Ben’s question? What’s the best crypto?

Andy: Well, the answer to that question, like almost anything in investing, is going to depend on what your goals are. Before you do anything with investing, you should be able to really easily answer the question: Why do you want to invest in this? That goes for stocks, bonds, anything. And it definitely goes for cryptocurrency.

So think about it. Are you interested in the technology of cryptocurrency? That might point you in one direction. Are you looking to diversify your portfolio, because you have a lot of traditional investments and you’re interested in crypto’s role in your portfolio? Are you looking to just be a day trader and speculate on short-term price movements? However you answer those questions is going to help inform which might be the best cryptocurrency for you.

It’s also worth noting that cryptocurrencies are not all the same. You’ve probably heard of Bitcoin and Ethereum. These are the biggest ones. But there’s more than 18,000 cryptocurrencies that are traded in some places. So you really want to vet these and make sure that the one you’re buying is the one that aligns with your financial situation.

It may have something to do with the field you’re working in or the field you’re interested in. So people have used the technology that supports crypto on things like finance, gaming, art, law. So it’s going to come down to learning about the field, making an informed decision about why you think a cryptocurrency is going to increase in value.

Liz: OK, nuts and bolts: How does somebody go about investing in crypto?

Andy: Well, there are a lot of ways to get cryptocurrency. You could, as we discussed before, receive it as payment for something. But for the most part, if you’re a total beginner and you’ve never experienced cryptocurrency before, the simplest way is going to be going to a centralized exchange, like a stock brokerage. A lot of stock brokerages are now selling cryptocurrency along with stocks.

But there are also a lot of dedicated spaces where you can buy cryptocurrency, and are really just cryptocurrency exchanges. And if you go to NerdWallet, we have reviewed many of these, and you can compare them and decide which one works for you. There’s a lot of differences between how they work, but we lay it all out for you there.

What you do there is, essentially, it’s just like buying something, right? You fund your account, you carry out a transaction, and then you own cryptocurrency. But the real hard part, I think, is not buying it. These businesses that sell it have made it pretty easy to buy now. The hard part is deciding what you want and what you intend to do with it.

Liz: OK. I had a friend who lost his password, and so I’ve been a little bit twitchy about using an exchange. So I was thinking there might be even easier ways to invest, like with ETFs or mutual funds. Or are those not a good way to go?

Andy: Well, you won’t be able to invest directly in cryptocurrency through an ETF or a mutual fund, because that is not something that’s regulatorily allowed right now.

There are some ETFs that just trade in Bitcoin futures, a sort of derivative of Bitcoin. But if you want a diversified portfolio, where someone else has picked out a bunch of cryptos for you that they think have promise — someone who’s an expert — there are relatively few options available. And that’s because of regulatory requirements around what funds have to do to hold cryptocurrency. There are ways to do this, but they’re not very simple.

If you’re interested in exposure to the cryptocurrency field — say you’re interested in this technology, but you’re just not ready to go into crypto — there are ETFs that are focused on the economy around cryptocurrency. They might invest in publicly traded companies that own cryptocurrency or that have other lines of business that are related to cryptocurrency. You can look into those. But for the most part, if you want to own a selection of different cryptocurrencies, you’re going to have to buy cryptocurrency.

Sara: So something to think about — besides not losing your password for your crypto wallet, because you could lose a lot of money that way, so don’t do that — but another risk is the fact that crypto has a reputation for being pretty volatile in terms of its value. So what causes the big ups and downs we see over sometimes relatively short periods of time with cryptocurrency?

Andy: There are a lot of factors contributing to crypto’s volatility. And there are two that I think are particularly important. I think the first thing to remember is that crypto is a new and relatively untested part of the financial world. And when you’re thinking about stock prices, for instance, there are sometimes decades worth of data on a company or on a sector that tell us kind of where we are in the cycle and what’s likely to happen, and how long you might wait for your investments to be kind of at their full potential.

Right now, no one really knows where crypto is in its cycle. It’s only been a couple years since this has been a popular thing, and there’s really not a lot of data about how crypto will react to other economic factors like inflation, for instance.

So investors’ confidence tends to bounce around as they try to reckon with factors that might play into the value of their investments. For instance, when Russia invaded Ukraine, crypto prices fell along with the rest of the market, because people thought the conflict would hurt the economy. Then it shot back up as people thought Russians and Ukrainians might turn to crypto to move money around. Now it’s been bouncing around. So no one really knows what this is going to mean. So I think you really don’t have the history there to give you a real sense of confidence about what might happen next.

I think the second major factor is that cryptocurrencies are an investment in their underlying technology. The thing that I talked about before — it’s called blockchain — it makes owning something digital more secure. And even though blockchain is really interesting and exciting to a lot of people, it’s not something that’s got broad adoption. It’s not like there’s a lot of things that you can pick up today and experience blockchain technology.

People are still building the products that you’re going to wind up using if it does become popular. So by nature, cryptocurrency is a speculative investment, speculating in the future of this technology, and it’s kind of like investing in a company that hasn’t yet turned a profit.

Liz: It sounds a lot like the early days of the internet, when there were a bunch of companies that were super popular that now are no longer around. So we don’t really know which form of blockchain, which form of cryptocurrency, is really going to stay the distance.

Andy: Right. I mean, there’s two fundamental questions. One is: Is blockchain technology going to create the kind of wealth that its supporters think it will? And that is possible, but by no means guaranteed. The other one is: Is the technology that is supported by the particular cryptocurrency that interests you going to be successful within that field? And that’s a whole other question. So you have two layers of risk here that might not be true in a more established sector.

Sara: We touched a little bit, and we joked a little bit, about losing your password when you have crypto. It’s not funny as a joke, because you can lose millions of dollars this way. So when somebody’s thinking about investing in crypto, or even if somebody has already started investing in crypto, what should they consider when it comes to storing the crypto that they have and keeping it secure?

Andy: So, if you have millions of dollars in crypto, then God bless you. I will say this: It’s a very complicated question about how to store crypto, but I’ll just go over a couple of the basics. You’re going to want to do a lot more research about this before you make a final decision, especially if you do have a lot of value tied up in crypto.

Essentially, the way that crypto works is that you control crypto through what is called a private key. Essentially, it’s like a password, but it has some differences, and it allows you to establish ownership. So if you want to spend it or sell it or transfer it, you need that key to say, “This is mine.” If you don’t have that key, you cannot claim your crypto. It still exists, but you’ll never get it. It’s basically gone.

There are several products available, usually called digital wallets, crypto wallets, that allow you to store these private keys securely. You want to think about whether you want to store it online — which is a little less secure, but more convenient and easier — or store it offline. You can actually store it on a physical device.

Those are some of the questions you’re going to want to consider. It’s going to depend on how often you intend to use it and move it around, and also what you think your security risk profile is. We have a handful of articles around how to store crypto and how to think about the question of where to store it, so you can check those out on NerdWallet.

Liz: You mentioned that different cryptos were essentially created to solve different problems. Can you give us an example of that?

Andy: Sure. So I mentioned Bitcoin previously, where Bitcoin is essentially made to be a medium of exchange. Essentially, I pay you a Bitcoin, and you give me a product. It’s supposed to be like money.

The second-most popular cryptocurrency, which you’ve probably heard about, is Ethereum. Ethereum was created as a way to program something that’s called smart contracts. And that might sound a little technical, but essentially that executes automatically when some condition is met. So, for instance, you could store value in a smart contract until a given period of time is passed and then release it — like maybe to the heirs of an estate, or something like that.

I mean, something like this has the potential to cut out a lot of middle men in lucrative industries, which you can see how that might create some value. Now, because of that, there’s a lot of people trying to solve this problem of how to make smart contracts that work really well. And there’s some interesting competitors out there that think they can do a better job. Cardano and Solana are Ethereum competitors.

So if you’re thinking about investing in something, it’s a good example of how you might think it through: Why do you think Cardano, Solana, Ethereum or any of their other many competitors are better than the other people trying to solve this question? What did they do that makes you think they’re the best? This can take some technical analysis, but if you can at least articulate an argument for why you think your investment is better, that will be a great start for you.

Sara: How might you think about how crypto would fit in with your overall investment portfolio or your investment strategy?

Andy: So it’s just important to remember that cryptocurrencies are risky investments, and they should be part of an overall portfolio that has some diversification in it. One rule of thumb is that you shouldn’t invest more than 10% of your portfolio in risky assets such as cryptocurrency.

Liz: Well, thanks for joining us, Andy. This was super helpful.

Andy: Thanks for having me.

Liz: All right. And let’s get to our takeaway tips, and I will start us off. First, learn crypto basics. Understand what crypto is before you buy it.

Sara: Next, get comfortable with volatility. There’s no guarantee that any single crypto asset will gain value over time.

Liz: Finally, don’t overdo it. Crypto should be, at best, a small part of your overall investment portfolio.

Sara: And that’s all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at 901-730-6373. That’s 901-730-NERD. You can also email us at Also, visit for more information on this episode. And remember to subscribe, rate and review us wherever you’re getting this podcast.

Liz: And here’s our brief disclaimer, thoughtfully crafted by NerdWallet’s legal team. Your questions are answered by knowledgeable and talented finance writers, but we are not financial or investment advisors. This Nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

Sara: And with that said, until next time, turn to the Nerds.

Guest Nerd Andy Rosen owned Bitcoin, Ethereum, Solana and Cardano at the time of publication.

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