Welcome to The Money Coach, a Times of Malta column where readers can ask questions about life's money issues. Send your questions about personal finances, inheritance, gifting or other personal finance topics to moneycoach@timesofmalta.com.  

Dear Luca,

I hope this letter finds you well. I am writing to seek your advice regarding an investment opportunity that has recently come to my attention. 

My nephew has suggested that I should consider investing in Bitcoin, especially now that ETFs have been approved, making it seemingly easier to invest. He believes that Bitcoin’s ease of access and potential for growth make it a worthwhile investment.

However, I have several questions and concerns before I proceed with any decision. Firstly, do Bitcoin ETFs pay dividends? This is a crucial factor for me as I am looking for investments that can provide a steady income stream.

Moreover, my nephew has taken a rather aggressive approach by taking out a loan and using his salary to purchase more Bitcoin instead of paying off the loan. He justifies this by saying that due to high interest rates, Bitcoin, being the new digital gold, will continue to appreciate in value far more than interest rates payments.

I find this strategy quite risky and would like your professional opinion on it.

Given the current financial landscape and the volatile nature of cryptocurrencies, what would you suggest? If I were to allocate a portion of my portfolio to Bitcoin, what percentage would be advisable? For context, I have a considerable portfolio and am comfortable with taking calculated risks, I am 56 years old.

I look forward to your guidance on this matter.

Warm regards,

A cautious investor 

Luca responds:

Dear cautious investor,

Firstly let me start this response by making it clear that I cannot offer investment advice, for that I always recommend seeking the services of a professional investment advisor.

However, I can answer some of your concerns.

Firstly, no, Bitcoin ETFs do not pay dividends, as bitcoins do not generate any income. The investment value of spot bitcoin ETFs is derived mainly from the appreciation (or depreciation) in the price of bitcoins.

With regards to your nephew’s aggressive strategy of buying Bitcoin, personally I do find this as a risky strategy, considering that Bitcoin and any cryptocurrency out there has no intrinsic value and is not backed by anything. It doesn’t mean that I am not aware of its future potential, and that for some people it has given great returns over the past years. However, one must be very careful when dealing with such ‘assets’, especially given their volatile nature.

Personally I do have some exposure to cryptocurrencies, but compared to other assets I own, it is very minimal.

It is very easy to get carried away when the price of something, be it cryptocurrencies, cannabis or AI (just to mention a few sectors which rose a lot these past few years), rises exponentially. I recommend keeping a cool head at all times, and stick to the financial goals you have planned for.

Investing is not meant to be exciting. Keep it boring, keep it constant and keep your emotions at bay so as not to be carried off by the ‘herd mentality’.

Warm regards,


Luca is the founder of the Money Coaching Hub. Email your financial questions or your response to today's question to moneycoach@timesofmalta.com for a chance to be featured in a future column.

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