If you are curious about Bitcoin and have 15 minutes do watch Professor Roubini’s Bloomberg video. Currently, I share his caution around Bitcoin.
His analysis reports that:
- Bitcoin is not a currency. It is not a unit of account. It is not a scalable means of payment. It is not a stable source of value.
- Bitcoin is not an asset. An asset produces an income or has utility. Bitcoin has neither.
- Bitcoin has no value and, in fact, has a negative value if you factor in the electricity costs it takes to mine it.
- Transaction costs are high. Not even Bitcoin conferences accept it for payment.
- Governments will not let Bitcoin become the next Swiss bank account for terrorists, money launderers or human traffickers.
- Bitcoin is not a hedge against inflation or negative markets. It went down 50% during Covid’s March and is rising out of step from traditional inflation safe havens like TIPS and gold.
I 
worry that the massive upswing in Bitcoin’s value is driven by speculation. And true long-term investing does not line up with speculation. My perspective may change. And, if it does I will be forthright about it.
As my office mate Chris often says: “The longer I’m in this business, the more absolutely certain I become that you should never be dogmatic”. Or, more seriously said: in investing you need principles to keep you off the shoals and avoid the traps. But you must also retain flexibility because nature abhors inflexibility. Inflexibility becomes dogma and dogma is the kiss of death in investing.
As always give me a call if you have any questions.
This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see a professional advisor for individual financial advice based on your personal circumstances. Assante Capital Management Ltd. is a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada.
