A cabbie was telling me that he was a cryptocurrency trader and that driving the cab was no longer his full-time job. My brother-in-law had told me that his builder had borrowed $400,000 against his house to buy bitcoin, an old analyst of mine owned some type of cryptocurrency and the millennial sitting next to me at dinner was telling his date how he had invested $5000 a week ago and it was now worth $10,000, continuing to check the balance every few minutes and show her.

So for all of those people asking my opinion on bitcoin and other cryptocurrencies, I'm happy owning Aussie dollars and paying my bills with it.

Find real value

When I start to see retailers accepting bitcoin or utility companies accepting it then I will believe that it's not just a quasi-ponzi scheme, selling something that has no value. It's a currency that doesn't do anything, is not backed by any sovereign nation, is not accepted anywhere, is hard to buy and sell, and has no fundamentals supporting it.

So here's my answer to anyone who asks me what to do about bitcoin: lock in your profits and think yourself lucky that you have made a profit in the greatest bubble in recent times. Then go and put your money into a real business that makes money.

Given the peer-to-peer nature of digital currencies and the potential for money laundering and tax evasion, longer-term on a fundamental basis there are still huge legislative risks for any corporate looking to invest in rolling out the technology on a mass scale, so I don't see Visa or Mastercard rolling out the technology anytime soon.

I own a small handful of businesses that I know well. They are real businesses that make real cash profits. I can't understanding buying something that cannot be used anywhere.

I get paid no interest on digital currencies and I can't use them for anything other than to sell to someone else. I would rather have my investments in the form of businesses that are growing or businesses that make real cash profits. As I always say, if the market was to shut down and I couldn't sell my investments I would need to own some businesses that pay me a dividend so I can put food on the table.


If the digital currency exchange shuts down and all my wealth is there, it is going to be hard to put my bitcoin in my wallet and pull it out at Woolworths to pay for my loaf of bread. It's hard enough finding somewhere to use an Amex card.

Michael Glennon is the founder of Glennon Capital

Read more Summer Minds:

China investors should look past Baidu, Alibaba, Tencent

Sandon Capital: The independent director, but from whom?

Is the next financial crisis looming?: Ross Barry

Auscap's Carleton on the hidden dangers of comfortable investing

Bitcoin fascination distracts from value, liquidity and trust

An alternative way to think about managing market risk

Bond fund managers greet 2018 with more to worry about than usual