Op-Ed by Bill Taylor/Fintek Capital
Bitcoin (Cryptos) too risky for investors? Bitcoin volatility way too much for the investing public? The SEC needs to regulate (but doesn’t know how yet) the trading of bitcoin? OMG, the investing public could lose money in bitcoin? Certainly the investing public would be much safer on a fully regulated exchange (NYSE) putting their hard earned money into a blue chip company like………GE? General Electric? Or not.
In case you haven’t noticed, bitcoin and GE have much in common. Bitcoin has dropped over 50% this year. So has GE. Bitcoin doesn’t pay a dividend. GE doesn’t either anymore (OK, only a miserly penny). Regulators are investigating bitcoin trading irregularities. Federal prosecutors are looking into criminal activity at GE (something about…..oh, some accounting issues). Now GE has a leg up on the legal front because the SEC is also looking into some other things at GE. So, on that front, GE is up 2 to 1 on bad legal news. So, as you clearly see, bitcoin and GE have much in common. BUT, the SEC has watched out for investors so they won’t lose money in bitcoin.
Now, one HUGE difference between the two is that while investors patiently(?) wait for the U.S. regulators to allow bitcoin ETFs, and access to other crypto products, bitcoin has increased 50%, 100%, 1000% and even more (depending on your entry point). Wow, would have loved to been able to have that opportunity. Oh, GE? Yeah well, ask your investment advisor or broker. Those really safe blue chips are just not as risk free as one would think.
So, as investors are beginning to realize, the regulators sometimes restrict the opportunity to participate in new innovative technology (and profit potential) all the while protecting you by only allowing investments in fully regulated products. But, in any event, if investors had bought either bitcoin or GE early this year the commonality is pretty clear. Both bitcoin and GE lost over 50%.
Bill Taylor is Managing Partner at Fintek Capital & a frequent FintekNews contributor