January 22, 2024

I am often asked about Crypto currencies and if I recommend purchasing them. Admittedly, this topic is relatively new in the financial world and opinions about crypto, its uses and most importantly, its value vary widely. I have a current opinion on it that is subject to change in the future since the Crypto space is evolving rapidly, but I cannot recommend that anyone purchase Crypto currency.

Crypto currency is the rage for all of the enormous possibilities that people see in it. I see some exciting things in that space as well, and I can foresee a possible future where the underlying technology of crypto currency known as “Blockchain”, plays an important role in the financial world. That being said, I do not see any reason to invest in any if the individual Crypto currencies at this time. First, I do not believe that Crypto is an asset. An asset by definition has to have reliable future cash flows. None of the Crypto currencies have reliable future cash flows. Crypto is also not a currency since currencies by definition, need to be a store of value and a medium of exchange. Yes, some merchants do accept crypto as a medium of exchange in order to appear trendy but they typically just convert it right back into dollars. It also does not act as a store of value since it has been quite volatile. Therefore, Crypto is not an asset and it is not really a currency. It is at best, a speculative investment. At worst, it is a fad that will eventually sputter out like other fads. In the past, other fads have run their course and when the last person holding the item pays top dollar and there are no more interested buyers, that person ends up losing. I fear this will be the case with Crypto. Even the recent news of new Crypto ETF’s coming to market do not change my view or make me more optimistic about Crypto.

All of this of course hasn’t even scratched the surface of other very large issues facing Crypto, such as the large scandals in the space, regulatory issues or the fact that I see no incentive whatsoever for governments to adopt/endorse any particular currency at this time for many different reasons. All of this makes crypto a non-investable item for me.

This material is provided as a courtesy and for educational purposes only. Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.

Crypto Currency/Bitcoin is highly volatile, can become illiquid at any time, and is for investors with a high-risk tolerance. Investors in crypto could lose the entire value of their investment. Bitcoin exchange traded funds (“ETFs”) are highly volatile and is for investors with a high-risk tolerance. Bitcoin ETFs involve risk and are not suitable for all investors.