At the time of writing, the price of bitcoin has shot back up somewhat to over $34,000. This isn’t as strong or as high as it was during the early portions of the month, but it’s refreshing to see that the world’s number one digital currency by market cap is potentially back on track and returning to form.
Bitcoin Has Been Getting Newfound Attention
While it’s too early to tell if bitcoin can return to its recent all-time high of more than $40,000, many affluent investors have had no choice but to take notice of the digital currency. They see it now on the same level as gold. They see the price spiking, and are quick to try it out for themselves, though according to some sources, that’s really all they’re doing… Just trying it out.
The fact remains that bitcoin is still quite volatile and vulnerable to price swings. We have witnessed this in just the last few days alone, and while the currency is getting larger everyday and attracting attention, it’s not necessarily “full-blown” attention. Rather, many legal offices, financial planners, trust officers and estate lawyers are now looking at bitcoin as something they need to test before they invest everything they have into the asset.
Joel Revill – chief executive of Two Ocean Trust – explained in a recent interview:
As bitcoin gains more mainstream adoption, participants are now more sophisticated investors. They want to treat it like any other asset. They want transparency, and they want to be able to plan around it.
John Willian is a retired partner of Goldman Sachs, one of the largest financial firms in the world. He stated that while he now has joined the ranks of viewing bitcoin as an alleged store of value, he has no doubt that its volatility is going to continue well into the future. He also says there are certain factors that have prevented bitcoin and crypto from becoming more mainstream and legitimate. He comments:
I still look at it as a venture style of investing. There had been some impediments. The trading tools weren’t sophisticated. There wasn’t transparency on fees. It was hard to know how custody works. These are things we typically take for granted.
Getting Things Ready for One’s Descendants
One of the most complicated things to do is to ensure that whatever bitcoin or crypto units you own are left behind to the right people. That’s why bitcoin has been making its way into estate planning over the past several years. Tom Olchon – a financial advisor with Evercore Wealth Management – says:
As the proliferation of the asset class grows, it is of huge importance to consider it within the estate planning context. You need to have a plan in place. There are several instances of people dying without anyone else having keys or access.