posted on February 15th 2018 in Fort Worth CFP Team Posts with 0 Comments /

In 2009 with the emergence of Bitcoin, the legitimacy of cryptocurrency was scrutinized and hosted polarizing opinions on whether investing in this highly-complicated digital asset was really…well, an asset to begin with. At its birth, Bitcoin attracted more hobbyists than traditional investors and had a slow and varied upbringing in the market. Fast forward to almost a decade later, cryptocurrency has once again become a hot topic as Bitcoin hits record values.

While those first investors scramble to find where they stored their private key to their Bitcoin wallets, many are now seeking advice on whether cryptocurrency should be considered a safe investment option or if they should steer clear of it.

In the aftermath of one of the globe’s largest cyber-heists, using caution when approaching cryptocurrency is an understatement. While hacks have been part of the history of cryptocurrency, the recent hack of Tokyo-based cryptocurrency exchange, Coincheck, has sounded the alarms. Coincheck was reportedly relieved of over $530 million in digital currency by hackers. This has understandably raised significant concerns about the regulations or lack thereof surrounding the management of digital funds.

The Securities and Exchange Commission suspended Bitcoin trading in December and recently urged fund sponsors to refrain from initiating registration of funds poised to be invested in cryptocurrencies. In response, Partner and Chief Investment Officer of our Dallas-Fort Worth office, Joshua Wilson, was asked to breakdown the vulnerabilities of incorporating digital currency into investment portfolios. While cryptocurrency is still an asset growing into itself and its function in an evolving marketplace is not yet clear, Joshua pointed out three key issues that pose a significant threat to potential investors:


With any investment product, it is our fiduciary responsibility to provide advice that is suitable and tailored to each client. However, Bitcoin and other cryptocurrency investment products are either not regulated at all, or have very little oversight guiding the handling of these investments. What this ultimately means is that as of right now, there is no answer to the question of how we can determine who we should recommend these types of funds to.


Risk assessment is also a critical part of any investment recommendation. Seeing that cryptocurrency is a relatively young and complicated asset, fund sponsors cannot accurately disclose the risk surrounding this type of digital investment. Thus far, cryptocurrency has been expressed as a volatile commodity with liquidity concerns. Without being able to consider the potential hazards accurately, the investor is inherently at risk.


Cyber security is the clear and present danger after the recent hacks but it shouldn’t be ignored as an ongoing-threat. The current markets and exchanges are varied and for the most part unregulated. Safeguards need to be implemented in order to defend against market manipulation and fraud.

As an industry leader and educator, WorthPointe advisors are particularly conscientious about the investment products and strategies that we recommend. The re-emergence of cryptocurrency in the marketplace is an exciting frontier and as we learn more about how these funds develop, we intend to keep you apprised. To learn more about Joshua and his specialization in tactical investment strategies across various market conditions, continue to his bio page for more details.

about the author: Joshua I. Wilson CMT

Josh-Wilson CMTJoshua I. Wilson, CMT®, AIF® is a partner and wealth manager who has managed over $2B for TD Ameritrade. Joshua led the national training and development program for all of TDA’s new advisors and managers, won a national coaching award. Joshua gave his graduation speech at Brown University. Joshua is a Chartered Market Technician® (CMT®) and a Accredited Investment Fiduciary® (AIF®).

Learn more and/or Contact Joshua

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