Bitcoin has become a popular topic of conversation among financial advisors lately. The cryptocurrency has seen a surge in popularity and value, making it an attractive investment for many.
However, there are a few things to consider before investing in Bitcoin.
First, it’s important to understand what Bitcoin is and how it works. Bitcoin is a digital or virtual currency that uses peer-to-peer technology to facilitate instant payments.
Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.
This limited supply has helped drive up the price of Bitcoin, as demand has outstripped supply. The price of Bitcoin reached an all-time high of over $19,000 in December 2017, but has since fallen to around $3,500 as of March 2019.
Despite this volatility, the overall trend seems to be positive, with steady growth over the past few years.
Another thing to consider is how you would purchase Bitcoin. There are a few different ways to do this, but the most common is through an exchange.
You can set up an account on an exchange and then buy Bitcoin using traditional fiat currency (like USD or EUR) or another cryptocurrency. Once you own Bitcoin, you can store it in a digital wallet on your computer or phone.
So, should financial advisors invest in Bitcoin? There’s no easy answer to this question. On the one hand, the limited supply and increasing demand could lead to continued price appreciation.
On the other hand, Bitcoin is still a relatively new and volatile asset, so there is potential for substantial losses as well. Ultimately, it’s up to each individual financial advisor to decide whether or not investing in Bitcoin is right for them and their clients.