Bitcoin Update

By Kenneth Klabunde on March 26, 2021

I pause and take a deep breath whenever I add the word “Bitcoin” into the text, much less the title, of my weekly client letter. The notion of a digital-only currency, investment, or similar store of value is such as foreign concept that many people simply have no interest in it. But I think I would be remiss in my duty of care to you if I ignored it in my professional work.

When I last updated you on Bitcoin 6 months ago (see my September 2020 note), the price per coin was $10,400. Today it is over $53,000. Yes, you read correctly — that’s a 500% gain in 6 months.

In the past week, it is particularly noteworthy that Morgan Stanley announced that they will be facilitating investing in Bitcoin for their wealthiest clients, and an increasing number of managers and institutions are calling for some allocation to this asset as part of a diversified portfolio.

I’ve been studying and advising clients on this since 2015. This year so far, we successfully added it as a holding in a test account at SEI Private Trust (including an IRA to tax-shelter the gains), and have identified a donor-advised fund that will accept gifts of Bitcoin for clients to do charitable giving while avoiding the significant capital gains taxes that have accrued in the past year.

In the coming year, I fully anticipate the approval of a U.S.-based Bitcoin ETF with an open capital structure, and that more custodians will figure out ways to directly hold and report Bitcoin on their platforms. Until then, it remains an incredibly easy asset class to access directly for those with the inclination to do so.

By Kenneth Klabunde on October 21, 2013

There are two ways to add fixed income to a portfolio: direct purchases of individual bonds, or the purchase of bond funds. We have a solid preference for owning individual bonds.

By Kenneth Klabunde on July 24, 2020

Is the divorce process the right time to learn line-item budgeting? Or is there a better starting point? Re-framing the spending plan to empower financial success.

By Kenneth Klabunde on August 27, 2021

Precedent Financial Strategies is proud to announce its continued compliance with the CFA Institute Asset Manager Code. Aligned with Precedent’s values, the Asset Manager Code clearly outlines the ethical and professional responsibilities of firms that manage assets on behalf of clients.

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