Bridgeriver Advisors LLC - December 2021

Bridgeriver Advisors LLC - December 2021

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DECEMBER 2021

Curious About Crypto? 2 Ways to Enter the Crypto Market — Without Buying Crypto Directly

My clients often ask me my opinion on new investment opportunities available to them, such as cryptocurrency, and I’m not the only one experiencing a rise in crypto curiosity. In fact, over 81% of financial advisors have received questions about crypto in 2020, which is up 76% from 2019, according to a survey conducted by Bitwise Asset Management and ETF trends. Unfortunately, the custodian I use to manage my clients’ money does not yet allow me to hold cryptocurrency for my clients. Thus, I cannot buy crypto directly for my clients — that doesn’t mean you can’t take advantage of crypto in other ways, however, and let me explain why. I believe crypto is here to stay, at least for a long, long time. Why? Well, cryptocurrency is not managed by any single government. That might lead you to believe it’s unsafe, but it’s surprisingly safe due to its unique system of “checks and balances,” i.e., the blockchain technology.

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You might hear that crypto is gaining popularity because it overcomes the pitfalls of regular banking, and that’s true in a few ways. As you can imagine, hosting people’s money is a lot of work for a banker. As a human being, you might be tempted to charge high transaction fees and request extra time to move money around. Automated blockchain technology allows you to keep transaction fees very low and make every transaction near instantaneous. There are some significant risks with trading cryptocurrency directly. While crypto has outperformed the market by any metric you want to pick, it’s also volatile. Also, you cannot do chargebacks (so don’t send crypto to anyone you don’t know!). Fortunately, there are great ways to benefit from the cryptocurrency market without buying various currencies directly. One way that’s drawn a lot of media attention is a cryptocurrency ETF, which is an EFT that specializes in businesses that trade in cryptocurrencies. Another way might be to buy into a company that went public about 1–2 months ago called Coinbase (COIN). They’re a popular cryptocurrency trading site that buys and sells many kinds of cryptocurrencies. Buying individual stocks involves risk so please do your own research to know if Coinbase makes sense for you.

Imagine you’re the “bank” during a game of family Monopoly. To prevent sneaky grandma from using her typical underhanded tactics of shortchanging you, the bank, you might write a list of every single money transaction ever made during the game. The list can be seen publicly and cannot be changed or edited once an entry is made, and every 10 minutes, you check your list to ensure everyone’s money is in the correct places for the correct amount. Blockchain technology works just like your Monopoly transaction list, except the money is exchanged like digital files, and no human operates the list. Also, even if a hacker got into one >Page 1 Page 2 Page 3 Page 4

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