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Bitcoin FOMO

October 6, 2021
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Welp, I’ve done it…I’ve gone down the bitcoin and cryptocurrency rabbit hole. Earlier this summer I wrote a post specifically about bitcoin and touched on some very basic concepts and thoughts. (Side note, to illustrate the volatility point from that article, the price of bitcoin at the time of that post was $38,000. Since then, bitcoin’s price went down to $29,000, up to $52,000, and now resides around $43,000 – all in four months.) Since my first post, I have really taken time to dig in and learn not just about bitcoin, but cryptocurrency in general. I still have a lot to learn, but what I have learned so far is very intriguing. I’m certainly not a bitcoin maximalist, someone who believes that bitcoin is the cure for all the world’s problems, but I do believe in the blockchain and bitcoin as a disruptive technology.

 

Am I Missing the Boat on Bitcoin?

Bitcoin has been in the news again lately, though for a slightly different reason this time. Earlier in the year, it made headlines for its swift price rise. Now regulatory concerns – both in China and in the US – dominate the bitcoin headlines. Still, many ask if they are missing out by not investing in bitcoin. They hear stories of people retiring early because of their investment in bitcoin and wonder if they “missed the boat.”

 

Focusing on the Minutia

I like to compete in triathlons, and we tend to be a “type A” bunch. In some ways, we must be when it comes to training for the three different disciplines of swimming, biking, and running. We are always looking for small gains, whether it is a faster way to put on shoes during a transition, making sure we have the most aerodynamic position on the bike or the most aerodynamic helmet. However, it is easy to get caught up in the minutia and forget that the most important part of competing in a triathlon is consistency in your training. It does me no good to have the most aerodynamic bike or helmet if I do not consistently train for months leading up to my race.

 

This leads me to the most important takeaway from my research into bitcoin investing for you as an investor. Right now, just like worrying about the most aerodynamic bike or helmet, I feel that worrying about missing out on bitcoin is the minutia of building a portfolio and saving for your future goals. I believe building a solid portfolio with a mix of stocks and bonds is generally all you need to reach your financial goals. You do not need to invest in bitcoin. Taking a bet on bitcoin is not going to fix a lack of savings or a spending problem but placing too much faith in bitcoin to fix your problem could make them worse.

 

Work on What You Can Control

The most important thing you can do for your financial future is to focus on the behaviors you can control, like how much you are saving, not spending beyond your means, and building a low-cost investment portfolio. I do believe that if you are in a younger generation, it is important to understand bitcoin and cryptocurrencies because I do think they will play a larger and larger role in our society over time. But that is a different use case than a pure investment vehicle.

I have said many times, money is a tool. It is there to support the financial and lifestyle goals of the future you envision for yourself and your family. If you are interested in investing in bitcoin, ask yourself how exactly does introducing bitcoin into your portfolio fit into your goals? Perhaps it is simply a matter of believing in the disruptive nature of the technology and you want to be a part of that…I can certainly understand that sentiment. However, it is important to not get caught up in the “FOMO” (fear of missing out) of bitcoin when you can probably accomplish the ideal vision of your future without investing in bitcoin.

 

Can Bitcoin Find a Place in Your Financial Plan?

Finally, our industry loves disclaimers, so when talking about something as speculative and volatile as bitcoin, I must give one, so I am going to try and make it useful. My goal in writing this post or any other post about bitcoin or cryptocurrency is not to make a recommendation for everyone to purchase bitcoin in their portfolio or buy into the digital asset “revolution.” In fact, for most of you, it probably does not make sense to purchase bitcoin because of its current volatility. It would be a violation of my fiduciary duty if I were to force my own beliefs, about bitcoin or any other investment, into your portfolio.

 

My point in writing these posts is to make sure I am not violating my fiduciary duty to clients. In just over ten years, the crypto asset space has grown to a two trillion-dollar market, and it is my fiduciary duty to constantly evaluate the changing investment landscape so we can educate our clients on the options available to them and where they might…or just as importantly, might not fit, into their financial plan. With all that said, if you are interested in investing in bitcoin, I am happy to discuss whether it fits into your financial goals and the various ways to invest in this space.

 

Mark Brinser

Mark Brinser
mbrinser@MyStewardshipAdvisor.com ‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‎‏‏‎ ‏‏‎ ‎‎‏‏‎ ‎‏‏‎T: 717.492.4787 F: 717.283.4049