How Bitcoin is penetrating RIA portfolios by looking riskier to ignore than embrace
Dangers remain but security, acceptability and upside all seem to have evolved just in the past few months, experts say
No One in Particular
Sure invest in Bitcoins if you consider it a venture investment…how many advisors have clients big enough and diversified enough where a venture allocation makes sense? And, for those which may warrant a venture allocation- diversification within the venture allocation is paramount otherwise you are rolling the dice. Anyone who has researched and invested in theses types of 'opportunities’ knows that. It may have merit…who knows just like any other venture investment- but really folks when your client has $1M or less do you really think this is a prudent, un diversified investment?
The Bull
When you find something that is going to change the world, at the very least significantly impact banking and finance, you have to wonder if you are doing your clients a disservice by not helping them acquire bitcoin. If their risk profile allows for extra risk, then at the very least consider the merits versus the risk. As a technology it’s gained some serious traction in the past 5 years. Since December 2013, the number of unique wallets has gone from 1.5m to over 8m. That’s incredible growth in the face of lower valuations, regulatory hurdles, government indecision, and complete failures such as Mt. Gox. Mt Gox by the way, wasn’t a case of “hacked” funds being lost. It was a case of co-mingling operating funds with client funds and essentially running on fractional reserves. Risk in this space has diminished considerably and companies like Coinbase may even be preparing for 9 figure funding rounds. There is still time to get in on this and price is historically low compared to the all time highs of last year.
guest
I invested in bitcoin as a teenager … the best investment I ever made and ever will make. There really is no comparison when you multiply your money by 100 in a year, unless you are a VC and can get equity in a company before it goes public. If a publicy traded ETF for bitcoin is ever traded, it will make us early bitcoin adopters look like VC’s who got shares of a company very early before the IPO, and we were able to do it without being an almighty accredited investor.
When considering the volatility of bitcoin now, imagine a graph showing the value of a very successful company from the moment it was created to a point in time when the IPO was first considered. Surely it is not a perfectly straight line. I imagine that it would look somewhat like bitcoins price graph over the last 5 years, where the media-induced price spikes in bitcoin are similar to additional rounds of VC funding for the company.
Just something to think about (:
Related Moves
Wealthfront cedes to four years of investors clamoring for crypto by taking on expensive third-party vendor that Betterment rules out
The Redwood City, Calif., robo-advisor turned a hard 'no' into a soft 'yes' by dealing with Grayscale and its 200 basis-point-plus fees, which its robo rival in NYC -- also without a crypto path -- finds ludicrous.
August 14, 2021 at 2:20 AM
Fidelity Investments applies its proven Peter Jubber to its unproven bitcoin unit and its launch of Fidelity Digital Funds signals it's all in on blockchain currency
By launching Fidelity Digital Funds under an 18-year seasoned exec, the Boston giant is signalling no let-up by putting something scarcer than capital into the crypto-pot -- its seasoned talent
September 9, 2020 at 2:20 AM
Gold Bullion International
Asset Manager for RIAs
Top Executive: Savneet Singh
