By late 2017, Grant Sabatier was a crypto millionaire.
Sabatier, the author of “Financial Freedom” and co-founder of BankBonus.com, was hoping that would be his last word on the topic.
For one, bitcoin has been on a tear: A single coin recently traded for more than $57,000.
And as crypto prices have risen, so has public awareness, Sabatier points out.
But though cryptocurrencies have blown up in price and prominence, Sabatier doesn’t think that they should occupy a prominent place in your portfolio.
Sabatier’s main concern with cryptocurrencies is the lack of history that can clue investors in to how the asset will behave.
Because those more established assets deliver consistent returns, long-term investors would be wise to allocate the vast majority of their portfolios to diversified, low-cost funds that track them, he says.
“My big problem is with people investing large portions of their portfolio in crypto, which is more of a short-term gamble,” he says.
Because crypto prices aren’t tied to fundamentals and instead move purely based on investor speculation, any investment in digital currency is bound to be an extremely volatile one.
“People who have read Satoshi’s bitcoin paper and have studied what the blockchain is outside of Twitter may understand the underlying technology and want to make a bet on the future,” he says.
Sabatier says that cryptocurrencies, and especially the blockchain technology that they run on could very well be the way of the future.
government to make it illegal to transact in crypto or to slap a 70% tax rate on them for them to become essentially useless,” he says, pointing out that the SEC recently put the approval of a bitcoin ETF on hold.
In the meantime, Sabatier acknowledges that there’s plenty of money to made in the short-term trading coins.
The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy.
The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts.