Bitcoin Is Digital Gold, Says Founder Bona Fide Wealth

Bitcoin, the largest crypto asset by market cap. (Photo; Doc. Pexels)

JAKARTA - Bitcoin, the world's most popular cryptocurrency, is now in the spotlight after the emergence of a new investment product called exchange-trained funds (ETFs) spot bitcoin. bitcoin's ETFs is a financial instrument that follows bitcoin prices in the spot market, thus allowing investors to buy and sell bitcoin without having to own or store it directly.

Recently, Douglas Boneparth, president and founder of Bona Fide Wealth, a New York-based financial planning company. In the "Bloomberg ETF IQ" event aired on January 18, 2024, Boneparth spoke with Eric Balchunas, senior analyst at ETF Bloomberg, about his views on bitcoin and ETFs spot bitcoin.

According to Boneparth, bitcoin can be seen as digital gold, which is an asset that has intrinsic value due to scarcity and its nature that does not depend on the central authority. He said:

"I see it in the simplest form as digital gold, as a storage of digital value. Although the storage of value and price movements of bitcoin may not always be in line, it is also space for alternative investment in a portfolio. I think clients are always looking for things that are not correlated or have the ability to produce alpha. To some extent, these are things that clients will always be interested in."

Boneparth also admits that the ETFs spot bitcoin is an attractive investment product, because it provides convenience and efficiency for investors who want to participate in the crypto market. However, he added that this product has not been in much demand by the generation of 'baby boomers', namely the age group that was born between 1946 and 1964.

"I really wanted to see some people, especially baby boomers, who weren't interested in moving money to the exchange to buy cryptocurrencies to get positions there. I mostly worked with people in their 30s until the late 30s and we had had conversations and counseling about cryptocurrencies and bitcoins, long before any product offers."

One of the reasons why baby boomers are less interested in bitcoin is because they prefer more stable and trusted assets, such as stocks, bonds, and property. In addition, they are also concerned about the risks of security, regulation, and volatility associated with crypto.

On the other hand, Boneparth considers that genuine crypto companies, such as Bitwise, may have advantages over established financial trading companies, such as Blackrock and Fidelity, in providing bitcoin spot ETFs. This is because genuine crypto companies better understand and support the development of blockchain and crypto technology, which is the basis for bitcoin

"It's something they have an advantage over big stores like Blackrock or Fidelity and I know their crypto table is strong enough and they have a lot of smart people. They are the same. So we'll see if it makes sense to choose the original over one of the big players."

However, Boneparth also reminded that investing in bitcoin and ETFs spot bitcoin is not without risk. He advised investors to do research and education before deciding to enter the crypto market. He also emphasized the importance of portfolio diversification and asset allocations that match their respective risk profiles and investment objectives.

Bitcoin and other cryptocurrencies are still a new phenomenon in the financial world, which offers opportunities and challenges to investors. For those who want to invest in crypto, it is important to understand the characteristics, risks, and potential of these assets. In addition, it is also important to choose the right investment products, such as bitcoin spot ETFs, which can provide access, efficiency, and transparency for investors.