“It is seen as a legitimate investment and there is also now a lot of research by VanEck around different outcomes based on the allocation of cryptocurrency in an investment strategy,” he said.

“Although cryptocurrency does have low correlation to traditional asset classes, VanEck research does claim that if you were to allocate 6 per cent of a portfolio to Bitcoin and Ethereum with a 70/30 split, you can achieve a great sharp ratio of 1.43 with volatility of 0.89 and compounded annual growth rates of 1.32, which are great results for a small exposure to the overall portfolio.”

Tom Bennett, head of operations at Swyftx, said there is a risk-adjusted way to get outsized returns with cryptocurrency compared to more traditional investments.

“The main thing is people do see it as a hedge against traditional markets or traditional market events that you'd see in the performance of traditional markets,” he said.

“Some people are in it for a shorter-term investment horizon, but I think even just looking at the ASX 200 in the first quarter of this calendar year, it's about three per cent returns which is not necessarily a bad performance.”

He added that if you compare that to the cryptocurrency industry as a whole, or Bitcoin specifically, it was about 60 per cent returns, and it supports the strategy that it is a good way to diversify when traditional markets may not be performing particularly strongly.

“The crypto market can be performing in a different way, and particularly outperforming those traditional markets, and as a way to hedge against traditional market performance, it is worth caveating,” he said.

Bennett added that cryptocurrency, and Bitcoin in particular, was born out of the last financial crisis in 2008 off the back of the GFC, and similar circumstances have not existed since its inception.

“I think that would be a really good test for cryptocurrency to better understand how correlated or uncorrelated it is to traditional markets,” he said.

“But I think realistically, what we've seen so far does show that it is, to a level, uncorrelated to what the traditional financial markets are doing in terms of performance.”