PE CAPITAL INVESTMENTS www.pecapital.org

by Eliseo "Jojo" Prisno

CRPC, MS Chartered Retirement Planning Counselor




The Bitcoin craze

Over the past several days, I have been asked a few times about Bitcoin and if it is a sound investment. I’ve shied away from commenting on cryptocurrencies because of the simple reason that I do not buy into the idea of an unregulated financial instrument. Period. Likewise, as a licensed Registered Investment Advisor, I can only advocate registered securities investments such as stocks, bonds, mutual funds and ETFs, structured products, insurance investments and proprietary investments that are SEC registered.

However, that doesn’t mean I cannot express an opinion on certain investments that everyone is talking about.

Digital signatures

So what is a crypto currency or simply Bitcoin? With paper money or what we generally call a “bill”, a government decides when to have it printed and how to get it distributed. Simply put, there is an authority behind its issuance which are mainly the government central banks.

In some instances, like the Euro, which is a multi-national currency, a central banking entity is created by the sponsoring nations to regulate its circulation. A private bank can issue its legal tender currency to some nations or independent city states like Hong Kong. In Hong Kong’s case, it is the HSBC (The Hong Kong and Shanghai Banking Corporation). HSBC is responsible for the controls of its issued bills in accordance with Hong Kong’s financial authority policies.

A crypto currency, on the other hand, is a digital financial instrument created to bypass any financial authority to create that semblance of “independence.” Its legal tender existence is verified through a “peer to peer” recognition using digital signatures, meaning independent computers will recognize the “legitimacy” of the digital ledger, which is what technically “Bitcoin” is, a digital financial ledger. Just like a paper bill, whoever is carrying it has the “authority” to use it as a legal tender instrument. In a digital ledger, whoever owns its digital signature has the authority to control its “legal” tender value.

Universal law

So what is this craze of Bitcoin sky high valuations all about? Right now there are only a few “digital ledgers” available for ownership and these ledgers, in most advocates’ perspectives, will be the basic structure to grow further the “independent” currency concept in the future, thus the very reason why there is a crazy demand on supply which currently is very limited. As in any auction trading, if the supply is limited and there’s a huge demand, the valuation shoots up. In Bitcoins’ case, too many demand that I cannot put any kind of logic on it.

As of this writing, it has passed $18,000 from about $4,000 less than four months ago. So why is everyone into it? In investing there is always this crowd mentality, where there's a tendency for groups of individuals to act together without a planned direction. The question, however is, is it sustainable? There are investments with a “cult” following like Tesla (TSLA) the electric car maker, an investment that I advocate, though its current fundamentals may not support its current valuation. I’m convinced that in the very near future the product it is currently producing will be sought by everyone and it will be the gold standard of the electric car category.


In Bitcoin’s case, I do not see the huge economic value of these ledgers except those who have dealings with the “dark web” or those that try to hide or launder their monies. The only large demand I see are from the rogue nations like North Korea or Iran who are economically sanctioned by the western economies.

Thus, this current “demand” is superficial or a mere novelty to get into the craze. The investment crowd is hedging on its speculative nature which for me is very dangerous. Any speculative investment which defies “gravity” does not mean it is exempt from the universal law. At some point it will wane on its weight, and when it falls, it will fall hard. Remember the “tulip” craze in Amsterdam a century ago? Bitcoin has the semblance.

So, as an investor what’s my advice on those who are already invested. As of this writing, Bitcoin pricing corrected before Christmas losing 1/3 of its value (from $19,000 down to $12,500) so I assume you’re still “whole” or maybe have made money when you bought it during the craze started four months ago (at $4,000). My advice is to GET OUT now or at least take out your principal. If what is left are mere profits, it’s not your hard earned money anymore so losing it wouldn’t hurt much. If the bull craze continues and it recovers, harvest the half and enjoy your profit.

However, if you plan to get in now think twice before doing it. If you really want to speculate, it should be some monies you’re willing to lose, or else look for other investments which have legitimate economic value.

ABOUT THE WRITER: Eliseo Jojo Prisno is a Chartered Retirement Planning Counselor (CRPC).He founded P/E Capital Investments in 2010, a State Registered Investment Advisory Firm (CRD# 172695). As the firm’s Managing Director and Senior Investment Advisor, he also manages a Fund of Funds investment program with Ameritas and runs an All-Equity Growth and Income customized portfolios in separate accounts via E*Trade Securities. If you have questions or desire a complimentary analysis of your investments or retirement readiness, email j.prisno@PEcapitalinvestments.com or call 1-888-929-2825. Visit our website www.pecapital.org and our Facebook Page.




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