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Q&A: Should I invest in Bitcoin?

April 3, 2021 | Investing

Today, we’re sitting down with LifeGuide Partner and Chief Investment Officer, Zak Lutz, to answer some of the most frequently asked questions we receive. This is the third part in our six-part Q&A series.

Q: Should I invest in Bitcoin?

 

A: Bitcoin has been in the news sporadically for several years now. Whenever the price of Bitcoin jumps, it catches the headlines and captures people’s interest. Bitcoin, a cryptocurrency, is ultimately one of many different currencies throughout the world. And the value of currencies is always changing.

While it tends to carry some mystique, Bitcoin is essentially the same as any other currency in that it does not have intrinsic value. Bitcoin, like all currency, doesn’t actually produce anything—you can’t eat it, you can’t make something out of it, and it’s not productive like a company or real estate.

This, along with its relatively short track record, makes Bitcoin difficult to correctly value. Its value tends to be based mainly on fear or speculation.

Bottom line: Currently, from an investment perspective, we don’t give Bitcoin much merit. We are keeping our eye on it, though. (This is not to say that Bitcoin will go up or down in value—no one really knows.)

 


 

The information provided does not constitute investment advice and it should not be relied on as such. It does not take into account any investor’s particular investment objectives, strategies, tax status, or investment horizon. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information, and “LifeGuide Financial Advisors, LLC” shall have no liability for decisions based on such information. View and opinions are subject to change at any time based on market and other conditions. Investing involves risk including the risk of loss of principal. Past performance is not indicative of future results. Index returns are unmanaged and do not reflect the deduction of any fees or expenses. Index returns reflect all items of income, gain and loss, and the reinvestment of dividends and other income. Diversification does not ensure a profit or guarantee against loss.
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