After all, that same bitcoin that was worth $124,000 in early October last year was worth about $66,000 in late February 2026, a 46 percent decrease in value. One reason for that volatility is that unlike stock prices, which generally rise and fall based on company performance, crypto prices have a tendency to soar or plummet based purely on speculation, social media hype, or even a single influential tweet.
What’s more, many of the early investors who had stored their bitcoins on the Mt. Gox exchange either had them stolen during a security breach in 2011 or had to line up as creditors when the exchange filed for bankruptcy in 2014. Some 880,000 bitcoins, worth about 60 billion today, were reportedly lost or stolen in those episodes—and many victims are still trying to recover their funds.
“When it comes to crypto, the volatility is generally a fairly well-known trait,” says Molly White, a prominent crypto critic and author of the Citation Needed newsletter. “But I think people often don’t anticipate that in some of these cases, not only might your crypto assets go to zero, but you could lose access to those tokens entirely because it’s very common for crypto platforms to go bust, or to run off with all the assets in an exit scam, or to be hacked by outside groups.”
Crypto investors may also be surprised to learn that crypto assets are typically not protected by federal insurance programs like FDIC and SIPC, which protect bank deposits and stock investments from bank and brokerage failures. That’s because crypto has fallen into a regulatory gray area, says White: “At the current moment, at least in the U.S., there isn’t much oversight.”
But whether you see cryptocurrencies as a potential path to riches or a wildly speculative gamble, one thing has become clear in recent years: Cryptocurrency is becoming impossible to avoid. Crypto is increasingly being embraced by traditional financial institutions, and can now be bought and sold by ordinary individual investors using traditional investment tools such as exchange-traded funds (ETFs) and index mutual funds from major firms such as Fidelity and Charles Schwab. Crypto assets have even crept their way into 401(k) provider and pension fund portfolios, meaning some investors may have retirement savings invested in crypto and not even realize it. And new financial regulations and federal laws like the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act of 2025 are further embedding crypto in the mainstream financial system.
That means crypto could affect your finances whether or not you choose to invest in it directly. So a basic understanding of crypto is an essential element of financial literacy, knowledge that every consumer should have.
This article—the first in a three-part series meant to deliver just that—is a primer on cryptocurrencies, how they work, and how they’ve evolved over time. Part two is a practical user’s guide for anyone considering investing in cryptocurrency, as well as a clear-eyed view of the risks. And part three explores why crypto is so influential and controversial, and examines the evolving regulatory framework around crypto and why it matters to everyday consumers.