Bitcoin. Ethereum. Litecoin. Ripple. These are just four of the
The answer to that question may vary per day, week, month, or year. These altcoins are classified as commodities, not currencies, by the Commodity Futures Trading Commission. Like all commodities, their value can quickly change.1
This spring, a bitcoin bubble popped
As 2017 unfolded, the value of a single bitcoin tripled, reaching more than $3,000 in May. Just weeks later, it was down to around $2,245, sliding roughly 25%. That tumble paled in comparison to the dive it took starting in late
Ethereum went on an even wilder ride
An ether was worth $8 when 2017 started. By June, its value was hovering near $400. In mid-July, the price slipped below $200.2
If bitcoin and
As the above examples show, money invested in these commodities can also easily be lost. Extreme volatility aside, ethical and moral issues are also complicating the acceptance of altcoins.
Cryptocurrency may be revolutionary, but it is also shadowy. In the opinion of the Securities and Exchange Commission, bitcoin and other little-regulated altcoins are ripe for criminal activity, particularly fraud and currency manipulation. The Treasury Department’s Financial Crimes Enforcement Network agrees.1
Cryptocurrencies have been linked to money laundering, a common practice of drug cartels. They are also convenient for online gambling operations. Does an investor really want to risk supporting these activities? Some analysts argue that these doings have been fundamental to the rise of bitcoin and ethereum.2
You may be curious to know how the Internal Revenue Service sees
As more and more businesses are taking digital currency payments, altcoins will remain economically viable. Analysts at Morgan Stanley, however, see the cryptocurrency rally slowing soon unless governments start to provide federal oversight for bitcoin and its ilk.3
If you are nearing retirement and marveling over the rise of bitcoin and
Altcoins are spicing up the investment world these days, but you may be better off with a plain vanilla portfolio.
Robert J. Tuzzo, CLU®, ChFC®, MSFS
Total Financial Concepts, Inc
106 Apple Street Suite 204
Tinton Falls, NJ 07724
Phone: 732-225-7404
1 - tinyurl.com/y8j7q8qy [6/5/17]
2 - marketwatch.com/story/ethereum-has-lost-175-billion-in-market-value-in-4-weeks-2017-07-11 [7/11/17]
3 - marketwatch.com/story/stay-away-from-bitcoin-its-complete-garbage-2017-06-15/ [6/15/17]
4 - cnbc.com/2016/10/24/safe-investing-strategies-for-the-us-election-and-uncertain-times.html [10/24/16]
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
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