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Cryptocurrency Interests

February 4, 2022

Interest continues to grow regarding the potential of cryptocurrencies - but are these investments worth the risk? Catch our newest TrendsTalk episode with ITR Speaker and Economist Lauren Saidel-Baker to learn more.



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The below transcript is a literal translation of the podcast audio that has been machine generated by Rev.

Hi, I'm Lauren Saidel-Baker. And welcome to today's episode of ITR Economics Trends Talk. On the docket today, cryptocurrencies. This is a hot button issue. One that we get so many questions about here at ITR. So let's delve in. Cryptocurrencies are certainly a fascinating trend, although not a brand new one. Bitcoin, for example, it's been around for more than a decade now. And other major cryptocurrencies do have a somewhat lengthy track record, five or six years at least. So the disruptive nature of these cryptocurrencies, well, it might not be so imminent or so pronounced as you would be led to believe by the headlines. And it's hard not to be interested in cryptocurrencies.

We all hear the amazing success stories of folks who have made investments and had huge returns. Those are so fantastic to hear, but keep in mind, there are two sides to that coin. With high returns also comes high risk. And at their basis, cryptocurrencies are still very speculative in nature. These items they haven't developed the same potential to be a store of value, the same measureability or ability to value them as typical commodities or stocks or bonds or real estate. So without these qualities and with a strong degree of volatility, it's important to be careful. We don't think cryptocurrencies are an investment grade alternative. They really still are a speculative instrument.

So the increasing adoption can raise your hackles a bit. I know just this week I saw a commercial on TV for a retirement fund that you could use to invest your IRA in cryptocurrencies. I think that's a warning flag. It's very important to be careful here. Now, recently in the US at least, there has been a lot of liquidity out in the market. And when times are good, we have of this willingness, as consumers, as investors to speculate. And again, hearing those amazing success stories of huge multiples of growth on Bitcoin wallets, it's easy to get swept up in this popularity. But let's not get ahead of ourselves. We expect a generally weakening US dollar coming in near term, and that could make cryptocurrencies...

Well, it will make it more attractive to a broader swath of people. It's also important to remember this is still speculation. It can be profitable, yes, but there is a lot of risk. So I wouldn't be going and investing my retirement fund for example, in such a risky item. In a way, this is largely reminiscent of investing in those penny stocks, way back in the day or options. It's just a new look with this technological component. And that's really what I want to address today. Because the technology behind cryptocurrencies, the blockchain technology itself, I think that's where we have a really fantastic opportunity here.

This technology can be used in so many things in the modern economy. From the supply chain, from banking transactions, there is a huge amount of opportunity, not in the currency itself, whichever one interested in, but in the blockchain. So look for those opportunities and as always, please join us again soon for ITR Economics Trends Talk. I'm Lauren Saidel-Baker. Let's talk again soon.


Since 1948, we have provided business leaders with economic information, insight, analysis, and strategy. ITR Economics is the oldest privately held, continuously operating economic research and consulting firm in the US. With a knowledge base that spans six decades, we have an uncommon understanding of long-term economic trends as well as best practices ahead of changing market conditions. Our reputation is built on accurate, independent, and objective analysis.