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A Bit of Context Around Bitcoin

Investing – 12/22/2017

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As we consider all the major investment headlines of the year, one that has attracted a great deal of recent public interest is also one that seems to be the least understood. If we were to caricature the evolution of Bitcoin media coverage (or digital currencies in general), we would say that what was on the back page and below the fold less than a year ago is now front and center daily. This rapid movement has not been easy to follow and has occasionally led to uninformed views spread by the press. If you have googled “Bitcoin” or “crypto-currency” to research and learn more about the subject, you understand how difficult it is to make sense of this in investment terms. With that in mind, we hope to save you some of the pain of self-researching by sharing this research report put together by our colleagues at Asset Consulting Group.

We are far from having any clear answer on the subject. Understanding whether digital currencies can overcome the challenges they face—regulation and price volatility to name a couple—is a key consideration. Additionally, with more than 1,000 crypto-currencies currently in existence, even if we accept the assumption that they have staying power, identifying which one will be “the winner” is far from a sure thing.

An admittedly flawed parallel to consider is search engines during the tech boom of the late 90’s. Excite, Yahoo, Webcrawler, Lycos and infoseek were some of the earliest builders of internet search technology. Needless to say, a quick Google search and we can see the fate that followed for the early entries. There are certainly some material differences in comparing a company with earnings (or an expectation of earnings) to a currency, but we think the analogy is a helpful reminder that the future is never as certain as it may seem in the present.

Needless to say, we still have more questions than we have answers, but your team at Matter will maintain curiosity as this continues to unfold, and will invite further discussion as well. In the meantime, we hope you find the research report an informative and succinct summary. Warm wishes to you and your family in the New Year, and we look forward to further conversations in 2018!

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