DEFINING TERMS : Just to start,I find the term cryptocurrency to be a misnomer. These things aren't currencies because they can't be widely exchanged for products and services in the real world.

But even if they were currencies, it wouldn't make sense for ordinary people to invest in them.

Major corporations hedge against fluctuations in currency values, but most of us invest in assets that at least have the potential of producing income and cash flow - assets that can be purchased with currency.

Then we get to the central claim for the new E.T.F.s - that they are helping to create '' an asset class,'' one that ''protects you'' in times of uncertainty, much as gold did '' for thousands of years,'' in the words of Laurence D.Fink, the chairman of BlackRock. This comparison, I think, is strained. 

Gold has a historical cachet, has actually served as money, is still held by central banks, has commercial uses in jewelry and industry and has an important cultural role in countries like India and Pakistan. Bitcoin has none of those attributes.

But in one sense I agree with the comparison. Gold is not an important part of a modern diversified investment portfolio, which contains stocks, bonds and cash.

Small amounts of gold may not hurt you much, but they won't help much either, numerous studies have shown. The stock market has done better over the long run than gold as an inflation hedge. Nobody needs gold as an investment now.

That's true of Bitcoin, too, which, in its brief life since its inception during the financial crisis of 2008-9, has not been an effective inflation hedge.

But it's different from Gold. Bitcoin has added considerable risk to the portfolio of those who have held it.

A Morningstar study last year by Madeline Hume found that as little as a 2 percent holding of Bitcoin can transform a conservative stock-bond portfolio into a far-riskier one.

Investors may be tempted by Bitcoin when its price is rising, but beware :

'' Compared with other assets, though, Bitcoin's volatility is more kerosene than kindling,'' the report said.

Fear of missing out isn't a great reason for investing in Bitcoin, which is still highly speculative.

This Master Precis publishing continues into the future. The World Students Society thanks Jeff Sommer.


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