Crypto Is ‘More of a Gamble Than an Investment’: Ryan Bond
Ryan Bond is a senior financial advisor at New York-based Savvy Advisors, a financial planning and services firm. With over eight years of experience in the field, Bond has worked at firms such as Morgan Stanley, Pennington Partners, Vanguard Group and Personal Capital.
Jeff Benjamin: Are you getting inquiries from clients about investing in cryptocurrencies and spot bitcoin ETFs?
Ryan Bond: I am, but not quite as many as back in 2020 and 2021 when we saw the huge price increases in digital assets. Since then, prices have cooled off and investor interest has waned a bit in my experience. I would say about 10% of my client base has asked in recent months about crypto and the spot ETFs.
JB: How do you personally feel about crypto investing?
RB: Personally, I have always avoided crypto investing. With the uncertainty and unpredictability, I consider it more of a gamble than an investment. Many investors claim they can understand and predict the crypto markets, but personally, I think that is just as speculative as saying you can beat the S&P 500 on a regular basis.
JB: If a client is determined to invest in crypto, would you recommend direct investing or a spot bitcoin ETF?
RB: If an investor had a choice, I would rather them invest directly into the currency itself. There is a convenience factor with buying an ETF investment, as it fits into your brokerage account. However, there are risks associated with custody of assets and regulatory uncertainty, which to me makes the case for direct investment.
The stories that came out in the last few years surrounding crypto exchanges closing and investors losing principal because they did not actually hold the coin themselves is a very real risk for these spot ETFs as well. The other difference you will see with the ETF is the discount or premium they will be traded at compared to the actual prices of crypto. You may be paying more than you need to for the same exposure. You will also be paying an expense ratio to the ETF that will eat into your potential returns, and the expense ratios for the new spot bitcoin ETFs are in the 0.2% to 0.4% range.
JB: What kind of a future do you see for cryptocurrencies?
RB: For me, the future of crypto is complete speculation. With a background in quantitative equity analysis and economics, I find it hard to see the long-term value in crypto investments. Equities are valued based on the expectations of their future cash flows, and crypto is only worth what the next person is willing to pay for it. Many will argue that there is value in the decentralized blockchain but that does not produce cash flows for investor returns. I see a future of many ups and downs, but I do not see crypto replacing any hard currencies as a true means of transaction. The point of a currency is not volatility, so I am not sure why anyone would want to hold a currency in something that is valued so differently from one year to the next.
JB: What are you telling clients about cryptocurrency investing?
RB: I tell clients to think of it as a gamble more than an investment. If you are not comfortable taking that money to a roulette table in Vegas, you should not be investing in highly speculative assets such as crypto. There have certainly been big payouts, but I know many more people who have lost than gained playing in crypto markets.
Contact Jeff Benjamin at Jeff.Benjamin@etf.com and find him on X at @BenjiWriter
Crypto Is ‘More of a Gamble Than an Investment’: Ryan Bond
Ryan Bond is a senior financial advisor at New York-based Savvy Advisors, a financial planning and services firm. With over eight years of experience in the field, Bond has worked at firms such as Morgan Stanley, Pennington Partners, Vanguard Group and Personal Capital.
Jeff Benjamin: Are you getting inquiries from clients about investing in cryptocurrencies and spot bitcoin ETFs?
Ryan Bond: I am, but not quite as many as back in 2020 and 2021 when we saw the huge price increases in digital assets. Since then, prices have cooled off and investor interest has waned a bit in my experience. I would say about 10% of my client base has asked in recent months about crypto and the spot ETFs.
JB: How do you personally feel about crypto investing?
RB: Personally, I have always avoided crypto investing. With the uncertainty and unpredictability, I consider it more of a gamble than an investment. Many investors claim they can understand and predict the crypto markets, but personally, I think that is just as speculative as saying you can beat the S&P 500 on a regular basis.
JB: If a client is determined to invest in crypto, would you recommend direct investing or a spot bitcoin ETF?
RB: If an investor had a choice, I would rather them invest directly into the currency itself. There is a convenience factor with buying an ETF investment, as it fits into your brokerage account. However, there are risks associated with custody of assets and regulatory uncertainty, which to me makes the case for direct investment.
The stories that came out in the last few years surrounding crypto exchanges closing and investors losing principal because they did not actually hold the coin themselves is a very real risk for these spot ETFs as well. The other difference you will see with the ETF is the discount or premium they will be traded at compared to the actual prices of crypto. You may be paying more than you need to for the same exposure. You will also be paying an expense ratio to the ETF that will eat into your potential returns, and the expense ratios for the new spot bitcoin ETFs are in the 0.2% to 0.4% range.
JB: What kind of a future do you see for cryptocurrencies?
RB: For me, the future of crypto is complete speculation. With a background in quantitative equity analysis and economics, I find it hard to see the long-term value in crypto investments. Equities are valued based on the expectations of their future cash flows, and crypto is only worth what the next person is willing to pay for it. Many will argue that there is value in the decentralized blockchain but that does not produce cash flows for investor returns. I see a future of many ups and downs, but I do not see crypto replacing any hard currencies as a true means of transaction. The point of a currency is not volatility, so I am not sure why anyone would want to hold a currency in something that is valued so differently from one year to the next.
JB: What are you telling clients about cryptocurrency investing?
RB: I tell clients to think of it as a gamble more than an investment. If you are not comfortable taking that money to a roulette table in Vegas, you should not be investing in highly speculative assets such as crypto. There have certainly been big payouts, but I know many more people who have lost than gained playing in crypto markets.
Contact Jeff Benjamin at Jeff.Benjamin@etf.com and find him on X at @BenjiWriter
