To crypto or not to crypto — a personal finance perspective

Daily Maverick

18-05-2025

From Pick n Pay to Trump, cryptocurrency is edging further into the mainstream, promising freedom from banks, big returns… and big risks. The question is: should it play a role in your personal finances?
In a recent Money Cents webinar, Business Maverick editor Neesa Moodley chatted to senior journalist Lindsey Schutters to address the question that won't go away: how does Bitcoin fit in your investment portfolio, and what do you need to know?
In 2014, Bitcoin made a fleeting appearance on South African airwaves. By 2016, you could buy a single bitcoin for R2,500 to R3,500. A decade later, amid global inflation shocks, rising interest rates and serial collapses in public trust, it now fetches nearly R1-million – and still evokes the same cocktail of suspicion, confusion and that nagging fear that the train has already left the station.
A sceptic's conversion
'If you'd asked me five years ago, I would've said: crypto? No way. I'm not touching it with a bargepole,' Moodley stated as the webinar began. Yet, as crypto coins have become increasingly mainstream and accepted, and the maturation of certain coins such as Bitcoin and Ethereum have increased, it could well be time to start looking more seriously at crypto.
Bitcoin's decoupling
Until recently, Bitcoin looked a lot like a glorified tech stock that often closely tracked the Nasdaq, while its volatility swung with every Fed rate announcement, with actual use cases still appearing more ideological than functional.
That changed this year.
'We had a big tech stock drop recently,' Schutters noted. 'And while all those dropped, Bitcoin actually went up.'
For Schutters, that's more than noise. It may mark Bitcoin's decoupling from tech equities – making it a viable hedge, rather than just a speculative bet.
'Smart investors spread their money across different things,' he explained. The key to diversification is being invested in assets that don't move in the same direction – so when other assets are crashing and Bitcoin is rising – that could help to keep your investment portfolio stable.
Hedging your bets
To be clear: no one's suggesting Bitcoin replace your retirement fund.'Think of it like gold,' Schutters advised. 'It should be a discretionary investment, rather than part of your core investment portfolio.'
Bitcoin's core strength isn't yield – it's scarcity. Only 21 million coins will ever be issued. Every four years, the reward for 'mining' new coins is halved. The most recent halving occurred in April 2024, cutting the per-block reward from 6.25 to 3.125 BTC. As more computing power is required to generate fewer coins, mining costs – and arguably, Bitcoin's price floor – rise accordingly.
'Bitcoin is deeply linked to energy,' Schutters explained. 'As it gets harder to create, and you have to spend more, it becomes more valuable per se.'
How and where to actually buy it
For South Africans, buying crypto still means navigating a dense web of apps, wallets and custodial risk. Schutters doesn't recommend Bitcoin ETFs or derivatives. 'That's trading on crypto – not actually interfacing with it.'
If you are investing in crypto for the first time, you can start with local, FSCA-compliant exchanges such as Luno, VALR, or Binance. Each allows you to convert rands into Bitcoin and other cryptocurrencies directly.
Choosing an exchange is only half the picture – you also need to understand wallets – digital accounts that store your coins. Hot wallets are connected to the internet (convenient, but vulnerable). Cold wallets – such as USB hardware devices – are offline and far safer, but only if you don't lose your password.
'There is no 'forgot password' option,' Schutters warned. 'If you lose your keys, that Bitcoin is gone.'
He cited the now-notorious case of James Howells in the UK, who lost access to more than $760-million in bitcoin after his hard drive was thrown away.
Still, beware the snake oil
For every legitimate crypto offering, there are dozens of scams.'There's a cottage industry of day-trading meme coins now,' Schutters said.
The FTX scandal is only the most infamous recent example. The exchange's founder, Sam Bankman-Fried, was convicted of fraud in 2023 for misappropriating billions in customer funds, many of whom believed their coins were safely in custody.
Schutters' recommendation is to rather stick to Bitcoin. Avoid flashy altcoins unless you know what you're doing. 'Especially if you're just starting out.'
Taxes, fees and real-world use
Crypto may be borderless, but it's not invisible. The South African Revenue Service (SARS) treats crypto as an intangible asset; this means all disposals – including trades, conversions, or off-ramping into rands – trigger taxable events.
Traders or individuals who frequently buy and sell crypto for short-term gains are taxed on their profits as regular income. Investors holding crypto for long-term appreciation are subject to capital gains tax, which is lower, but only applies to 40% of the gain (less your annual CGT exemption).
Transaction costs are another blind spot. Luno and VALR charge around 1.4% for instant EFTs, while card deposits can reach 3.9%. Binance has similarly tiered fees.
'What you see in your wallet isn't what you'll get,' Schutters said. 'A good rule of thumb is to skim 3% off for costs.'
Yet crypto is slowly becoming spendable. Pick n Pay now accepts bitcoin payments via the Lightning Network, a Layer 2 protocol that allows for fast retail transactions without congesting the main blockchain.
'It's kind of like tap-to-pay,' Schutters noted, though volatility still makes crypto an imperfect payment tool. Many merchants opt to settle in stablecoins like USDC, which are pegged to fiat currencies such as the US dollar.
Trump, strategic reserves and centralisation
Towards the end of the webinar, Moodley raised the global curveball: Donald Trump's plan to create a 'crypto strategic reserve' for the US, comprising stablecoins and potentially Bitcoin.
Schutters didn't mince his words. 'If institutions or governments control too much, it defeats the founding principles of crypto,' he said. 'You'd need more than 50% of the mining power to make changes to the blockchain – and that's the danger of centralised accumulation.'
The irony? A technology built to prevent systemic dominance could still end up captured by it.
'I'm committed to telling a balanced narrative so people are informed enough to make their own decisions,' said Schutters in closing.
In an ecosystem dominated by hype, misinformation and empty promises, that alone might be the rarest currency of all. DM