4 – Bitcoin is volatile
You know this by now, but it’s worth repeating. There’s plenty of money to be made here, but there’s also plenty to be lost. The Financial Conduct Authority reminded UK investors earlier this year of the potential to “lose all their money” invested in the asset.
Trading in Bitcoin is, for now at least, pure speculation. It serves little material function and
offers no income. With little in the way of fundamentals behind it, its price is susceptible to all kinds of influences. A tweet from Elon Musk can be as powerful as a national clampdown.
No doubt the currency will rebound from its current nadirs – no doubt too this won’t be the last time it stings investors.
Five year performance
(%) As at 30 Jun
Past performance is not a reliable indicator of future returns
Source: Refinitiv, returns in US dollar terms as at 30.6.21
Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to a Fidelity adviser or an authorised financial adviser of your choice.