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Color of Money: Don't gamble on becoming a bitcoin millionaire

Michelle Singletary on

"I understand how it works, and that the currency is only worth what people think it's worth," he said. "But I took money from other investments and decided to take a chance, as this is a very small percentage of our investments."

Perhaps you still have FOMO. If so, here's what three certified financial planners -- Mark DiGiovanni in Atlanta, Steven Podnos from Cocoa Beach, Florida, and Robert Schmansky from Detroit -- had to say when I asked them about virtual currency.

Q: What are you telling clients who are interested in investing in bitcoin?

DiGiovanni: "I would first have them tell me what bitcoin is, how and by whom it is created, and how its valuation is determined. If they can't give complete answers to these questions, I would ask why they would ever risk money in something like that."

Podnos: "I think this bitcoin investment scheme is insane. Presumed 'scarcity' and newness are attracting attention. The underlying 'asset' is both almost impossible to understand or to explain to anyone. A big red flag in my book."

Schmansky: "The most important thing to realize is this is not an investment, it's a gamble. When we gamble, we risk total loss for the chance of a windfall. Think of bitcoin like you would a lottery ticket. You'll be lucky if you get a few matching numbers and only lose a little, and there's very little chance you will cash out with a windfall."

Q: Who is the right bitcoin investor?

DiGiovanni: "Someone with way more money than sense."

Podnos: "No one that is buying it at this point is counting on anything but having a 'greater fool' come along who will pay more for no reason other than attracting the next greater fool. I've had three calls inquiring about investing in bitcoin. I told them all that I was against it. One asked me to invest six figures in it anyway, and I said he'd have to do that himself."

Schmansky: "Of all the conversations I've had with investors, those with money don't see the value."

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