Some financial experts are not bullish on cryptocurrency as an investment. They wonder: Is it really the next big thing, or will it run its course? In fact, they urge clients not to waste their hard-earned money on bitcoin.
And what about blockchain, the technology behind bitcoin? Right now a variety of companies are trying to find new ways to utilize blockchain technology.
For investors, the question to ask is: Do you look for companies developing new uses for blockchain, or will this become the next dot-com bubble?
While many financial experts have mixed views on both issues, billionaire investor Warren Buffett recently told CNBC that the craze over bitcoin and other cryptocurrencies won’t end well.
“In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” Buffett, the chairman and CEO of Berkshire Hathaway, told CNBC.
Buffett said he would not take a short position on bitcoin futures. “We don’t own any; we’re not short any; we’ll never have a position in them,” he said.
We spoke with several members of the CNBC Digital Financial Advisor Council and had them weigh in on the cryptocurrency craze and the investment opportunity with blockchain technology.
“It’s the wild, wild west,” said Ron Carson, founder and CEO of Carson Wealth Management Group. “But trying to pick a cryptocurrency today is a fool’s game. Unless you’re in gambling mode, I wouldn’t put any money into cryptocurrency right now.”
However, Carson does see opportunity in blockchain technology.
“Blockchain will enable peer-to-peer exchange of value and services. This thing is real,” he said. “It’s going to transform our economy.”
Cathy Curtis, founder and owner of Curtis Financial Planning, and Carolyn McClanahan, founder and director of financial planning at Life Planning Partners, are both hearing from clients about bitcoin investing opportunities.
“I do speak with clients about cryptocurrency and bitcoin,” Curtis said. “It seems to be sort of a generational thing.
“Right now I’m saying, ‘If you want to dabble in it, go ahead,'” she added. “But I don’t see the value in it.”
While Curtis admits she doesn’t see a real positive in bitcoin investments, she is bullish when it comes to blockchain technology. “It’s less hackable, and it can be applied to so many other industries,” she said.
“Our clients ask us about bitcoin more out of a curiosity; they are generally not risk seekers,” said McClanahan of Life Planning Partners. Plus, she tells them if they want to invest in bitcoins now “for fun,” it’s fine. “But don’t put a lot [of money] in now, because you have missed the boat,” she said.
McClanahan said she explains to clients that blockchain technology “is going to be huge.”
“Blockchain technology is going to be able to do a lot of great things, so it makes sense to consider that as an investment opportunity,” she said. “But we will do that through a diversified portfolio.”