Bitcoin, Blockchain, and Values-Based Investing
Since its inception, Sovereign Financial has encouraged clients to align their investments with their values because investment is an act of ownership. We believe it is wise to own companies that fill a need in society, produce a sustainable profit, generate a positive return, and bless humanity and the world through their products and processes.
The same is true for fixed income investing, as it lends money to companies, groups, or governments that should generate a positive outcome for stakeholders. For instance, municipal bonds can build roads and bridges, and corporate bonds can provide capital for a business to expand. Historically, Sovereign Financial has invested in equity and fixed income securities because we are able to align your values with these investments with a high degree of confidence. Every day, our team rigorously and diligently considers your values and portfolio in light of the ever-evolving investing landscape.
What makes a good investment?
Recently, cryptocurrency has taken the media by storm, popularized by figures such as Elon Musk and Mark Cuban. Cryptocurrency is traded and stored using blockchains—highly sophisticated, interconnected, secure, decentralized, and transparent networks that function as ledgers for transaction records. Cryptocurrency, namely Bitcoin, promises a final form use as a legitimate currency. In theory, it would function as money without the red tape of governmental oversight, making international transactions easy and efficient. Since the beginning of the year, businesses such as PayPal and the Dallas Mavericks have begun to integrate cryptocurrency into their payment structures. However, at present, most people treat cryptocurrency as an investment alternative to stocks and bonds.
If you are considering buying cryptocurrency, here are some questions worth asking:
Why do you want to buy crypto?
Do you view this as an investment, speculation, or currency?
Are you aware of the volatility and risks associated with cryptocurrency?
Comments from high profile figures in recent days have swung certain cryptos up or down ten percent in a day.
What role will this play in your portfolio?
Is your financial success dependent upon a certain outcome, or is this a small piece of your diversified approach?
Have you researched the specific use-cases for the cryptocurrency you are considering?
For instance, is it promising a cutting-edge technology, or is it just following social media trends?
Are there values-based considerations that may be important to you?
For instance, Tesla has reversed its decision to accept Bitcoin as payment due to environmental concerns with mining and transaction validation.
At the end of the day, we firmly believe in values-aligned solutions employed with a long-term approach in a globally diversified strategy. There is no reason cryptocurrency could not comprise a portion of your portfolio, as long as you are fully aware of the potential for risk, downside, and impact.