Bitcoins and Bubbles

Date: Jan 23, 2018

Bitcoins and Bubbles

First up let me say that I’m no expert on this or any other crypto currency but then really, who is? That said, as a professional adviser I can’t really offer advice on this but I do have opinions. The first is the most obvious……steer clear! Apart from those people who are invested and who clearly believe the ride has no end, I don’t know anyone who believes this has but one outcome ie bubble meets brick wall equals splat!. The amazing thing is that I know some of the “Believers” and if I’d suggested to them 6 months ago to put their hard earned on black at the casino or punt on a “sure thing” at the track they’d have been shocked at the thought let alone done anything about it. And yet here we are….. the thing is when I ask these people to tell me what they’ve invested in they don’t actually know. I’ve put it to them that perhaps they’re just investing in a number in the hope that the number goes up which of course they scoff at muttering something about blockchain but in the end they really have no idea. From an investment perspective this is a major problem. Investing 101 – understand the (underlying) investment. With all conventional investments there is a “something” that underpins the “thing” ie gold futures or even CFD’s are driven by the demand and therefore the price of the physical “thing”. Bitcoin has no underlying asset or if it does, it has no use other than to sidestep accountability. The phrase “he can’t even rub two Bitcoins together” comes to mind (think about that….of course he cant). Sure it’s now being traded on the Chicago futures exchange but that’s just capitalism at work. Believe me if there’s a buck to be made you’ll always find a capitalist lurking somewhere in the background but that doesn’t necessarily legitimise things. And so we find these “Believers” who are historically cautious people, investing in a virtual “something” that doesn’t exist that was created by a “someone” nobody can find, in an unregulated environment. If that’s not a recipe for disaster what is?

Related Tag: Super Specialist Gold Coast