Cryptocurrency and Bitcoin.
You can barely browse the Internet these days without reading something about these exciting new concepts that have taken the world of finance and technology by storm.
In this video, Adam Day, a financial advisor here at Wealthquest, explains the two most important components of the cryptocurrency world.
One of them is the blockchain, which, as he explains it, “is the actual infrastructure and the technology that is behind the currencies.”
It is essentially a massive accounting ledger that securely records and verifies transactions. The beauty of the blockchain is that it can be used for many other things besides cryptocurrency.
Second, there are the cryptocurrencies themselves, which are the representation of value on the blockchain. The different cryptocurrencies like Bitcoin, Ethereum, and Dogecoin use the blockchain to keep track of the flow of their respective currencies.
Many people ask their financial advisors if they should invest in Bitcoin. Adam explains that it’s essentially impossible to get an objective value of Bitcoin because, unlike regular investments, there’s currently no cash flow or earnings to track.
Because almost nobody accepts it as a valid form of payment. For example, we can’t use it to buy groceries, pay our rent, or pay for a meal at a restaurant.
As a result, there’s very little transactional use of Bitcoin in everyday life.
Even though it has the potential to be very useful to society, at the moment Bitcoin is extremely speculative. Here at Wealthquest, Bitcoin is not part of our investment planning philosophy and we do not intend to have a stake in it.
Sometimes investment headlines can lead you to think that you’re missing out on something. But before you consider a new investment – it is important to evaluate your risk tolerance. Asking yourself honest questions about your personal Investment Risk Tolerance is a good first step.
Since knowledge is power, we encourage you to keep talking and learning about this fascinating new technology
Source: Wealthquest. Past performance is not indicative of future results. For informational purposes only. Not intended as legal or investment advice or a recommendation of any particular security or strategy. Information prepared from third-party sources is believed to be reliable though its accuracy is not guaranteed. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. For more information about Wealthquest, including our Form ADV Part 2A Brochure, please visit https://adviserinfo.sec.gov or contact us at 513-530-9700.