Five things to consider about Bitcoin

Wealth-Management-Advisor
Wealth-Management-Advisor

Article by Phil

It looks like Bitcoin is not going to go away. Earlier this year its global market value hit $1 trillion for the first time (although it has since fallen below $600bn). In addition, research has shown that an increasing number of UK investors either hold or want to hold Bitcoin as an investment, despite what their Wealth Management Adviser might think.

So, what do you need to know and consider:

  1. It is extremely volatile – the volatility of Bitcoin is up to 85%. In context that makes it five times more volatile than FTSE shares. In other words, Bitcoin has crashed five times more deeply than say the FTSE market last year at the height of the pandemic. So, you need to be prepared for wild fluctuations in value.
  1. Because it’s so volatile you cannot forecast it. So, you must ignore speculators who say there are trends to follow, There aren’t any. You’ll either win or lose.
  1. Only go for Bitcoin itself. Bitcoin is the biggest cryptocurrency by far and on that measure potentially the most “Stable” if there is such a thing.
  1. You should treat Bitcoin as an asset rather a currency because of its volatility. It’s like buying single company shares, the value could go up or down.

Stay safe.

In the latest news from the FCA, the worlds biggest trader Binance has been refused permissions to trade in the UK and has been ordered to display a notice to that effect on its UK website. We’ve reported on this before but the FCA has now imposed the ban retrospectively from 30th June 2021. The reason for the ban is that FCA believes that the Binance business was essentially unable to be regulated because of its complicated international ownership structure.

Please be aware, this article DOES NOT CONSTITUTE ADVICE in any way shape or form. Bitcoin is unregulated. We would never recommend any investments being held in cryptocurrencies of any kind.

(The figures are taken from an original article by Charlie Parker of Albemarle Street Partners published in Money Marketing 5/8/21)

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