Bitcoin is likely to record its worst monthly performance since May, but the CEO of a global financial giant says you should 'ignore the crypto deniers' if you want to seriously build your wealth for the long term.
The warning comes from Nigel Green of deVere Group during a cryptocurrency slump that has triggered the world's largest digital asset to lose 17% during the last month of the year, which puts it on track for its worst performance since May, when it lost 35%. Other cryptocurrencies have also fallen during this period.
"The Bitcoin bashers, the crypto cynics, the digital deniers are out in force at the moment, trotting out the same old arguments about cryptocurrencies," says deVere Group founder and CEO, Nigel Green.
"However, investors who are focused on building their wealth for the long-term should ignore their rants. Instead, they should look at the data. For the third consecutive year, Bitcoin has outperformed both stocks and gold."
Bitcoin is up almost 65% in the year to date, while the S-P500, the benchmark index of the world's largest economy, manages 27.6%, and gold is down around 7%.
Green says this is because digital money is the inevitable future in an ever more digital world.
"This is increasingly being accepted by institutional investors, Wall Street giants, household name investing legends, leading academic institutions, governments, and major multinational corporations," he says.
He says, meanwhile, 'the deniers' are wheeling out old arguments against digital currencies, which he says have all been answered repeatedly.
"They have two main - and baseless - anti-crypto messages. First, they say that criminals use cryptocurrencies. However, law enforcement agencies can more easily catch criminals who use the public ledgers on which cryptocurrencies are run than those who use cash or other forms of payment with no record. Are these people really saying cash isn't used by criminals?
"Second," says Green, "They insist that the crypto market is volatile. This is true, but is it necessarily always a bad thing? Many investors embrace this short-term volatility for longer-term gains. They use the lower prices of Bitcoin and other major cryptocurrencies to top-up portfolios."
As the downturn began earlier in the month, he says the Bitcoin panic-sellers were practically giving away their cryptocurrencies to wealthy buyers who use the digital assets as an inflation shield.
"This scenario seems particularly likely in the current situation as they are increasingly worried that their cash, and therefore spending power, is being eroded by soaring inflation."
Bitcoin and other digital currencies are widely regarded as a shield against inflation mainly because of its limited supply, which is not influenced by its price.
"Borderless, global, decentralised currencies are the future," says Green. "It's my view that to create, build and protect wealth for the long-term, the crypto deniers' ideologies should be dismissed, and the data from the financial markets should speak for itself."