Financial Advisors: Here’s Why We Tell Middle-Class Clients To Avoid Crypto Completely
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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For the average middle-class investor, crypto’s wild price swings and lack of safety nets can not only dent a portfolio, but they can also derail an entire financial future. Advisors say cryptocurrency actively undermines financial plans if you don’t have a wealth buffer to protect you.
Here’s why experts urge middle-income clients to avoid crypto altogether, and what to focus on instead.
Crypto Doesn’t Belong in the Average Household’s Financial Plan
To put it bluntly, “Crypto investments are fundamentally misaligned with the financial realities of middle-class households,” said Chad D. Cummings, Esq., CPA and CEO at Cummings & Cummings Law. Without large savings cushions or multiple income streams, the average investor can’t afford the steep and sudden losses that crypto markets regularly inflict.
Boris Castillo, a CFA, CFP and the founder and wealth manager of Amenity Wealth, agreed, adding that crypto does not provide “demonstrable data showing some consistency in return patterns relative to other assets.”
In fact, Cummings warned that “crypto disrupts rather than supports a balanced financial plan,” and urged typical middle-class families to allocate their income toward debt reduction, tax-advantaged retirement accounts, emergency funds and home equity. “Diverting funds to crypto undermines all of these priorities,” he said.
Crypto’s Risk Far Exceeds Its Reward
Castillo warned that crypto’s volatility, lack of inherent value and absence of safety nets “make it too risky to be anything but a speculative asset.” Unlike traditional assets, most cryptocurrencies have no tangible backing or legal recourse if they collapse.
Therefore, any loss could be catastrophic if an investor has no emergency funds, he stressed.
Additionally, unlike other kinds of investments, Cummings pointed out that “crypto does not produce dividends, interest or contractual cash flow. It consumes attention and increases exposure to unregulated platforms, irreversible hacks and catastrophic volatility.”
Scams, Hype and FOMO Lead To Costly Mistakes
Both experts noted the powerful pull of social media and hype as major drivers of crypto losses. Many middle-class investors, they say, fall victim to FOMO, scams and exaggerated success stories that obscure how few people actually profit.
“The advent of AI has also bolstered investment in cryptocurrencies. Clients see the return and hear the non-stop hype, while ignoring the volatility and not-as-recent history,” Castillo noted.
Cummings agreed that a lot of the hype makes it look as though crypto gains “are fast, easy and inevitable because the talking heads and crypto bros parrot this incessantly.” The truth is that most reported gains “are unrealized, exaggerated or inaccessible due to lockups and slippage,” he said.
Losses Can Set Families Back for Years
When middle-income investors lose money in crypto, the damage can extend beyond the portfolio. Cummings said, “The greatest risk is not price collapse … it is delayed financial recovery. A middle-class investor who loses $10,000 in crypto may require years to rebuild that capital.”
During that time, they could miss compound interest, employer 401(k) matching or Roth IRA eligibility, he explained. “Crypto loss is not temporary; it reorders the client’s entire financial trajectory.”
Regulation and Protection Are Still Lacking
Unlike traditional investments, crypto operates in largely unregulated territory, meaning investors have no safety net if things go wrong. Both experts stressed that until there’s insured custody, federal oversight and transparency, the risks will outweigh any potential gains.
“It’s the wild west,” Castillo said, “There is no recourse for loss, other than a carryforward if it’s in a taxable account.”
In contrast, index funds and U.S. Treasuries operate within a regulatory framework that enforces custody, disclosure and investor protections, Cummings pointed out. “Crypto exchanges often falsify volumes, manipulate spreads and impose unilateral withdrawal restrictions,” he warned.
He has counseled clients who lost over half their net worths to failed exchanges, “rug-pulls” (a scam in which the creators of a cryptocurrency suddenly withdraw all the funds and abandon the project) or unauthorized trades.
Safer, Proven Alternatives Build Wealth Instead
Avoiding crypto doesn’t mean missing out on investment gains. Cummings urges clients to focus on steady, regulated investments that deliver compound growth and tangible returns.
“Clients build wealth through disciplined savings, consistent equity exposure and tax efficiency. Crypto contributes none of those,” Cummings said.
He recommended “boring but powerful alternatives” such as total market index funds, I-Bonds and structured CDs.
Could Crypto Ever Be Safe for the Middle Class?
The likelihood of crypto ever becoming a safe option for the middle class depends upon could whether regulation, transparency and stability improve, and even then, it’s a long shot.
“Some type of alternative currency could be a safe or practical investment for the middle class, but it would need the tacit or explicit support of the central banks — they hold all of the money,” Castillo said.
Cummings said that crypto could become viable in the future, but “that certainly won’t happen in Trump 2.0. Until that exists, middle-class investors are swimming with sharks without a cage.”
For crypto to serve the middle class, Cummings said it must evolve into a regulated product with enforceable investor rights, “not a speculative free-for-all governed by TikTok sentiment.”
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