Bitcoin surges past $50,000 for the first time
Call for more debate about the cryptocurrency to help educate investors on the level of risk involved.
16th February 2021 15:50
by Myron Jobson from interactive investor
Call for more debate about the cryptocurrency to help educate investors on the level of risk involved.
Bitcoin has hit another milestone, surging past $50,000 for the first time.
Commenting, Myron Jobson, Personal Finance Campaigner, interactive investor, says: “We need to talk about bitcoin to help educate investors on the level of risk involved as the first and best-known cryptocurrency smashes through another psychological milestone level.
“The noise around bitcoin, further fuelled by Elon Musk’s Tesla’s decision to buy $1.5 billion in the cryptocurrency and accept it as payment earlier in the month, has been too loud to ignore.
“The worry is, at a time where the investment industry has seen an influx of people investing for the first time, novice investors will get swept up in ‘bitcoin mania’ and invest in the coin without fully appreciating the risks. Bitcoin remains a high-risk investment and the price swings have historically been too wild for many investors to stomach.
“The ascendency of cryptoassets such as bitcoin hasn’t escaped the attention of the City watchdog, which issued a warning to investors of the risks of investments advertising high returns based on such products in January. People should keep this in mind before investing in the cryptocurrency with fear of missing out.”
Dzmitry Lipski, Head of Funds Research, interactive investor, says: “Bitcoin is increasingly becoming a mainstream investment attracting institutional investment. We still do not think it has a place within our customers’ portfolios.
“We have been following bitcoin since 2011 and entirely understand its attractions in the eyes of its proponents: we share their concerns over monetary debasement, inflation and financial repression. However, the history of non-governmental ‘token-based’ currencies does not give us confidence in its long-term popularity.
“This time might be different but for us that is insufficient comfort to deploy our customer’s capital in something that has a fundamental worth of zero.
“When it comes to ESG considerations, bitcoin is nothing short of an environmental disaster a recent analysis by the University of Cambridge suggests. No investor who upholds ESG principles should own it under any circumstances.”
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