Bitcoin… or may we suggest a better alternative?

Bitcoin. It’s a subject that being discussed around the water cooler and on morning runs everywhere at the moment and yes it’s coming up in many conversations we’re having with friends, clients and people in the street, especially self-managed super fund holders.

We understand its attractiveness as the first decentralised digital currency, after all, there’s no central bank or government controlling it, which allows individuals to transfer money without a third party or financial institution. It’s been linked to the dark web with good reason but for those who’ve bought into this crypto currency, it’s been a rollercoaster, and will continue to be one.

In December Bitcoin became the largest bubble in the history of the world. Less than a week later the value of Bitcoin plummeted by 29% in just four days. It’s quite frankly a yo-yo and our best piece of advice is to invest speculate only what you can afford to lose.

It doesn’t sit well with Blue Chip’s core investment philosophy, which we’ve written about previously. Essentially there are four types of investment:

• Property
• Shares
• Loans
• Speculation

And guess where Bitcoin and other crypto currencies sit… the category we don’t recommend: Speculation. We’ve written in detail about the Four Types of Investment and those of a speculative nature include art and wine. The idea is to buy a collector’s item in the hope that you can sell for a profit at some stage in the future.

However, if you are prepared to lose whatever you choose to invest speculate in Bitcoin or similar you may consider some alternatives: 2up on Anzac Day, a bet on the gee-gees or a lottery ticket.

Our recommendation? Why not give to a charity of your choice? You know there will be real benefit from your considered thoughtfulness – and of course it’s likely to be tax deductible! That’s a win all round if you ask us.

If you are looking to seriously invest, get in touch with our team who will guide you to long term investments in quality growth assets. Give us a call on 02 8188 0148 (Sydney) or 0414 583 558 (Kingscliff) to arrange a consultation.

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