History Repeats: Applying What We Know About Tech Stocks to a New Market

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Financial advisors can exercise caution in the digital asset space while still giving their clients exposure, eervin1 writes in reflection on the Dot Com Bubble of the 1990's in this week's issue of 'Crypto for Advisors.'

When we invest, we need to separate the hype of revolutionary technology from the actual prospects for commercialization. This is really hard to do, especially for the average investor, as well as incredibly difficult for the financial advisor who is trained to counsel prudence and caution while insanity rages on everywhere around them.

Some of you may be feeling the same burn with digital assets. Like tech, blockchain has real, tangible, long-term use cases. Unfortunately, the pattern for consumer adoption of new innovation is to take it to extremes, and this was very apparent with crypto. Terra Luna, Three Arrows Capital, Blockfi, Celsius, FTX, and many others are all good examples of this.

The thing that I learned through tech stocks and that I can now impart to you is that taking a conservative stance toward investing in a new asset class makes sense, but it doesn’t have to be binary. There is a way to exercise caution while still giving your clients exposure.

 

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