Bitcoin, Solana, Ethereum. How to Explain Cryptocurrencies to Clients

Bitcoin, Solana, Ethereum. These names are familiar, but what do they actually mean as investments, and how should advisors explain them to clients?

Unlike dollars, euros and yen, which are all cash at the end of the day, digital currencies serve very different purposes both in the real world and in portfolios. Some are more speculative, while others function more like technology investments, and understanding those differences is essential for guiding clients in a world that’s being reshaped by decentralized financial systems. “Digital assets are not a one-size-fits-all investment,” said Kevin Feig, CFP and founder of Walk You To Wealth. “Bitcoin has a 21 million supply cap, making it more similar to a collectible from an investment perspective. Ethereum, however, is more like the Android or Apple App Store.”

How Do You Like Your Stake?

Bitcoin is often described as a store of value, but it’s more speculative than safe-haven. Gold, after all, has tangible uses: jewelry, electronics, even spacecraft. Bitcoin’s value is largely belief-driven, said Campbell Harvey, Duke University professor and Research Affiliates partner. “Any asset that has a 70% to 80% annualized volatility — like five times that of the stock market, five times that of gold — is going to be a risky store of value and is hardly a safe haven asset,” he told Advisor Upside. He added that crypto tech is evolving, so the Bitcoin of today may look very different in the future.

Other major cryptocurrencies, like Ethereum and Solana, are better understood as tech platforms. Their customizable blockchains enable fast, low-cost transactions and support decentralized financial systems that banks and businesses are building toward. Examples include:

• Robinhood, Fidelity and PayPal have launched their own dollar-backed stable coins on the Ethereum blockchain. 
• The predictions market platform Polymarket is built on a system that coincides with Ethereum.
• Shopify uses Solana Pay to let vendors accept crypto payments in the form of SOL tokens or stablecoins instead of going through a credit card processor.

Ethereum and Solana also allow staking, which Feig compares to traditional bonds or CDs. “You’re pledging your tokens to help the network run efficiently, and in return you get rewards, similar to an interest or dividend payment,” he said.

Where Does This Leave Portfolios? Crypto adoption among advisors hit an all-time high last year: 32% reported allocating to crypto products, up from 22% in 2024, mostly through ETFs, according to a Bitwise report. Harvey emphasized diversification. “Even within the crypto space, you should be diversified: some Bitcoin, some Ether, some Sol, and maybe a few others,” he said.