OPINION: NFL STAR SAQUON BARKLEY'S MISLEADING COMMENTS ON BITCOIN

By David Mulhearn, CFP® 

CLICK HERE FOR BARKLEY'S TWITTER THREAD

I’d like to preface this opinion piece by saying that I’m a huge fan of the New York Giants as well as Saquon Barkley. The fact that he’s donating the proceeds from this endorsement to Covenant House is an admirable gesture and will go a long way toward helping those who need it most.

Now that I’ve touched on that, I’d like to talk about the thread that Saquon posted on Twitter. There are parts of this post that spark thought and other parts that bother me. Most of my frustration stems from the fact that Bitcoin doesn’t have many of the consumer protections in place that most other financial instruments do. This allows people to (intentionally or unintentionally) mislead investors and which doesn’t sit right with me. Let’s dive into a few parts of this post that evoked a reaction from me.

1.) “Inflation is real... In today’s world, how do we save?”

This question has become much more common in the past year and it is a great one to be asking. There are numerous asset classes that can serve as a hedge against inflation. Common examples are stocks, real estate, and commodities. Saquon implied that these asset classes are less accessible than Bitcoin, but I disagree. There are mutual funds and other professionally-managed investment products available that provide access to each of these asset classes for regular, everyday people. I’m not here to provide advice on the best inflation hedge, but to let you know that there are other ways to retain (or even grow) the purchasing power of your assets.

2.) “Bitcoin is a proven, safe, global, and open system that allows anyone to save money”

I believe this claim is potentially misleading. If he’s referring to the system of transactions within the Bitcoin network as being safe, I can’t comment on that. It’s outside of my sphere of competence. If he’s alluding to Bitcoin being a safe asset class to invest in, that bothers me. Early in my days as a licensed financial professional, I learned not to refer to investments as “safe.” Every investment has risk of loss. Bitcoin is not immune to that. Nobody should be allowed to lead an investor to believe otherwise, but Bitcoin and other commodities are not regulated the same way that other financial instruments are.

3.) “Try getting some of your paychecks in #Bitcoin.”

If you depend on having consistent, reliable cash flow to pay for regular expenses, this can be tricky. The value of bitcoin is much more volatile than value of the US dollar. How would you feel if your hypothetical Bitcoin paycheck was worth 10% less the day after it was deposited into your account? Nobody said you have to keep your paycheck permanently in cash or Bitcoin. In fact, it’s quite common to invest a portion of your paycheck through a 401(k), IRA, or other investment account.

I like the fact that Saquon and others are talking about financial literacy. I share the belief that it must be accessible to all and I think society has come a long way toward that goal.

I don’t like the fact that he is influencing others to hold Bitcoin as an asset class. I also don’t like the fact that misleading messages can be spread to investors due to a lack of regulation in the cryptocurrency space. Influencers, professional players, etc. need to be careful with the power that they hold in influencing individuals. Misleading information can be viewed as trustworthy if it is being promoted by those individuals who are generally not licensed advisors. If you are interested in learning more about financial literacy, I encourage taking advantage of the vastly available educational content online through credited and licensed financial firms. Many firms are committed to educating the public and making financial literacy accessible to all. What’s your opinion on this? Do you have any thoughts on Bitcoin or the sad state of the New York Giants organization?

Advisors Financial, Inc. is a registered investment advisor.
The opinions expressed herein reflect the author's views as of the publication date and may be subject to change at any time. This information is intended for educational purposes only and does not constitute investment advice.