Bitcoin: Coming to a 401(k) plan near you?
Our 2018 report on Bitcoin (BTC), and the conclusions therefrom, remain relevant today. In short, the prudence in adding Bitcoin to a retirement plan is questionable, at best. Please see our past Retirement Times article on BTC discussing the cryptocurrency and its supporting technology. Greater media coverage has caused BTC interest to grow exponentially, as has its meteoric rise in price.
Currency, let alone cryptocurrency, lacks intrinsic value, and does not provide dividends or income. The absence of intrinsic value, dividends, or income makes currency a less than ideal investment option because price becomes more a function of supply verses demand. Thus currencies are difficult to value and develop a long-range return forecast. Newer currencies like BTC contain elements of speculation because their approaches, adoption and technology are unproven. This can lead to tremendous volatility (see this discussion in our previous article), making them risky options for even the most sophisticated investors. U.S. Department of Treasury Secretary Janet Yellen recently issued a warning, stating that “(BTC) is a highly speculative asset, and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer.”
