Boom or Bust: “What Do You Think of Bitcoin?

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If you’ve been breathing, then you’ve heard about bitcoin. Your Survival Guy is asked all the time, “What do you think of bitcoin?” Years ago, I was getting my hair cut and was asked about it. I said, “I don’t like it. I don’t see the value. I like the distributed ledger or blockchain technology, limited supply, blah, blah, blah.” It was trading at around $5,000. This week it hit $108,000. Thanks, Survival Guy.

I was asked the same question this week, and my answer was the same. I don’t like it. As I’ve written to you before, I don’t like the prediction business. I like being in the business of investing in stuff I understand. I’m fine if others make money faster than me. I know that gate swings both ways. I’ll remind everyone about the tortoise and the hare.

For you, my concern is in the power of time and money or compounding. Earning interest, being paid to invest. That’s quantitative. You can see the money coming into your account. Living and dying on prices is qualitative. Hoping someone will buy at a higher price isn’t investing. And when someone does buy, you no longer have your investment.

What I do like when it comes to tangible money is gold. Yes, I understand it doesn’t pay interest. But it has a track record as a truth teller about the malfeasance of government. It also brings smiles to the faces of loved ones who receive it as a gift this time of year. For as long as I’ve been working, I know I need to work to afford it. I don’t have that peace of mind with bitcoin.

There may be a case for bitcoin in portfolios. I know BlackRock is on board with an ETF offering via its iShares platform. Others are selling them, too. I also know they can charge fat fees, which is typically where the faith is placed, not necessarily in bitcoin. It’s all about fees, just like ESG was. Follow the money. I just don’t know about bitcoin’s value to you, the investor.  I’ll pass, thank you.

Action Line: If you’re comfortable investing in what you know, we may be sympatico. When you’re ready to talk, let’s talk. But only if you’re serious. You can email me at ejsmith@yoursurvivalguy.com. And feel free to email this to your know-it-all nephew.

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E.J. Smith - Your Survival Guy
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.