For those interested in Crypto, Neil hasn’t been able to wrap his brain around it and so has asked me (Olivia) to research it. So far, I’ve done about 35 hours of research.

I understand the draw of a decentralized currency that isn’t influenced by government policy. I can also see it becoming popular as an internet-based currency. There is a lot of debate on whether Cryptocurrency and Bitcoin specifically, was created to be a currency or an investment. Many say that the main purpose of crypto is to be a “safe” investment that maintains its value when the economy is bad and the stock markets are dropping.

However, there are a lot of unknowns about crypto as a whole. Because it is unregulated and decentralized, it’s next to impossible to detect or trace illegal activity, and the rules around it will likely change quickly as it becomes more mainstream. As it stands, crypto is taxed like a stock, or sometimes like a foreign currency, but it’s not highly regulated yet. However, I expect that to change as more people adopt it. Also, because its value isn’t tied to any physical asset, it is based solely on supply and demand and is therefore very volatile and holds the risk of dropping quickly and significantly. A lot of crypto is also held by a small number of people or companies, so if they suddenly decide to sell their holdings, the individual investor is blindsided by the drop in value.

We don’t know enough to recommend or not recommend crypto investments. We’re happy to ride along and learn from your experience with it. However, we would offer one word of advice: if you are going to go outside of the typical architecture of finance, go outside of it. Rather than place your crypto investments in a registered plan, really learn about the crypto field by managing it yourself. We would love to hear about what you discover.

Some of our clients who were interested in crypto have used Coinbase and found it helpful.

As always, we love the discussion and look forward to hearing from you.