A wealth planner has warned that investing in cryptocurrencies might not be a very good idea. Instead, he advocated for investing in things like stock market, bonds and real estate.
While the prices of major cryptocurrencies surged this week including Bitcoin, Ether and XRP, a wealth planner has warned that investing in cryptocurrencies might not be a very good idea. “What we’re going to see, most likely, is, we’re going to see cryptocurrencies collapse,” Peter Mallouk, a certified financial planner and president of wealth management firm Creative Planning, told CNBC. He added that even when there are a plethora of virtual currencies that have emerged over time like Litecoin, Ethereum etc, “there’s no way that even a fraction of them can survive,” the news channel quoted him as saying. Instead, he advocated for investing in things like the stock market, bonds and real estate.
However, Peter Mallouk, the author of several books on investing and planning, does not completely disregard the possibility that some virtual currencies will survive. The issue, however, is that in the meantime, the cryptocurrencies will not reap any benefits and income. “Is it possible that maybe one or two will work out in the future? Sure it is … In the meantime, if you buy cryptocurrency, you get no income. It’s not a real investment. It’s speculation,” he said. Trading at over $8000 on Friday, the price of bitcoin rallied over 15% on Tuesday and crossed the $5,000 mark for the first time since mid-November, however, for a brief time. Ether and XRP also gained around 7%. But, even the current high is still well below the all-time peak of $20,000 that Bitcoin hit in December 2017.
Over time, many critics have come out against cryptocurrencies. Earlier, Joseph Stiglitz, an award-winning economist based in the US, explained the perils of virtual currencies and said that the world has already seen the havoc created by real estate in money laundering. “We know from the Paradise papers and Panama papers the extent of money laundering. The large percentage of global wealth that is in these dark havens,” he told CNBC in an interview just days after Facebook’s own cryptocurrency Libra was announced.