The owner of South Yorkshire-based IFA Blue Wealth said the online currency, which can be traded anonymously between individuals and has been labelled ‘virtual gold’, was too volatile for his clients but could be a future option if cash became unstable.
Bitcoin was launched in 2009 by an anonymous computer programmer as a peer-to-peer currency unhampered by the conventions of a regulated, state-sanctioned banking system.
It value jumped from $35 (£23) in early March to $180 (£118) this week, prompting fears of a bubble. Advocates of the currency have suggested it could replace traditional cash deposits, especially in the wake of the Cypriot financial crisis.
Canadian entrepreneur Jeff Berwick last week announced a plan to launch Bitcoin cash machines on the Mediterranean island, while Maltese brokerage firm Exante has launched a Bitcoin hedge fund.
Mr Shah said: “I’ve been following this story for a while and it is interesting to see how it is evolving. However it is unregulated, unlisted and anonymous, which is a concern, and the danger is that with the price soaring so high, this could just be the next bubble.
“With my client base generally in their late 50s, why would they want this extreme volatility when they should be looking to crystalise the money they already have?”
Adviser view
Alan Dick, partner of Glasgow-based Forty Two Wealth Management, said: “It’s not something I would advise a client to invest in. As for the term ‘virtual gold’, I don’t invest in gold, so virtual gold is a non-starter.”
