Ford says she had a year-old client recently come to her with a plan to liquidate a majority of her retirement savings and invest the proceeds, after taxes and penalties, in bitcoin.
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Anyone contemplating such a move should be debt-free; have an appropriate amount of emergency savings; be on track with financial goals such as retirement or college savings; and have a healthy cash flow. Ups and downs Bitcoin, which goes back to a blueprint, has a history of price swings related to security breaches, hacking and regulatory scrutiny and action.
In earlyit plunged again when Tokyo-based Mt. Gox, one of the biggest bitcoin-trading platforms at that time, filed for bankruptcy protection after being beset by security breaches, theft and shutdowns. Advisers point to regulatory uncertainty as another risk factor.
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Government authorities could restrict or control the use and sale of bitcoin or other digital currencies. Regulatory approval of cryptocurrency investment funds could bring legitimacy to the asset, or rejections could shake investor confidence. From the Archives Bitcoin pioneered the cryptocurrency movement, but after eight years, it still struggles to find mainstream acceptance.
Paul Vigna joins Tanya Rivero to discuss. Bloomberg Originally published April 12, Similarly, the price of bitcoin and another popular cryptocurrency, ether, tumbled in late July after the SEC indicated in a report on a specific coin offering, called DAO, that U. The virtual currency recovered, then faltered again when South Korea said it would ban raising money through all forms of virtual currencies.
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But some regulators appear to be embracing cryptocurrencies. Tracking risks As for the few investments that attempt to track the price of cryptocurrencies, they carry two risks: The Bitcoin Investment Trust from Grayscale Investments, for example, trades at a substantial premium to the price of its bitcoin investments.
Advisers say darker threats lurk as well. Those characteristics make the currency efficient and transferable, she says, but they also mean it could be used on the black market or for money laundering and other illegal activities, which could expose investors to losses.
There have already been several costly thefts of the currency. She can be reached at daisy. Click to Read Story Arnold Schwarzenegger Recalls His Best and Worst Financial Bets The actor and former governor says success has less to do with writing checks and more to do with investing his time and effort in getting ahead.