Bitcoin and related cryptocurrencies, which now number in the thousands, are the subject of much debate and fascination.
In its relatively short existence, Bitcoin has proved extraordinarily volatile, sometimes gaining or losing more than 40% in price in a month or two.
Even if cryptocurrencies such as Bitcoin or gold are held for decades, the owner will likely never receive more Bitcoin or gold, and unlike stocks and bonds, it is not clear that Bitcoin and other cryptocurrencies offers investors positive expected returns.
No government or issuing authority exists to oversee cryptocurrencies.
Many of us have forgotten or misplaced computer passwords from time to time and have had to contact the sponsor to restore access.
Gox, a Tokyo-based Bitcoin exchange launched in 2010, was at one time the world’s largest Bitcoin intermediary, handling more than 1 million accounts in 239 countries and more than 90% of global Bitcoin transactions in 2013.
The UK Financial Conduct Authority cited a number of concerns as it prohibited the sale of “cryptoasset” investment products to retail investors last year.
The financial services industry has a long tradition of innovation, and cryptocurrency and the technology surrounding it may someday prove to be an historic breakthrough.
Mark Sievers, president of Epsilon Financial Group, is a certified financial planner with a master’s in business administration from the University of California, Berkeley.
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