The Problem with Bitcoin - David Semmens, Wealthify CIO
- 24.05.2021 01:20 pm
David Semmens, CIO at Wealthify commented:
“The surging popularity of Bitcoin and other cryptocurrencies in recent months has greatly concerned Wealthify. Beginner investors have been enticed by upward spikes, perhaps not fully appreciating the risks associated.
“With the value of Bitcoin having almost halved in pound terms since its mid-April 2021 peak, some might be tempted to buy. But with such a volatile investment, there’s no telling where it could go next. The main problem with Bitcoin is that it remains difficult to value intrinsically; unlike equities and bonds, there are no underlying cashflows or assets backing it. Bitcoin also remains vulnerable to regulatory agency attention, which could increase further given recent price momentum was exaggerated by social media commentary.
“Those looking to grow their money with less risk involved should diversify their investments, focusing on the long-term. At Wealthify, our team of experts make all the investing decisions for our customers; monitoring the markets every day to look after their investment and making the best decisions for the long-term health of their plans.
“That said, the past year has certainly taught us that we need to be prepared for the unexpected, so savers should always balance access to emergency cash with putting money away for the longer term. Before investing, it’s important to have an appropriate rainy day fund, which is usually at least three months of outgoings.”