Forget the volatile Bitcoin price! I’d buy cheap FTSE 100 shares to retire wealthy

Big Bitcoin logo.Big Bitcoin logo.
Big Bitcoin logo.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Another day, more volatility. But I’m not referring to the choppiness in broader equity markets. Instead, I’m thinking of the wild price swings in cryptocurrencies, such as Bitcoin. Market participants highlight that in the cryptocurrency world, prices rise fast and fortunes are created seemingly overnight. But there is always the other side of the coin (no pun intended), where crashes are sudden and severe.&nbsp;” data-reactid=”23″>Another day, more volatility. But I’m not referring to the choppiness in broader equity markets. Instead, I’m thinking of the wild price swings in cryptocurrencies, such as Bitcoin. Market participants highlight that in the cryptocurrency world, prices rise fast and fortunes are created seemingly overnight. But there is always the other side of the coin (no pun intended), where crashes are sudden and severe. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="That’s why I think average retail investors who plan long-term for comfortable retirements will be better off investing in stable&nbsp;FTSE 100&nbsp;and&nbsp;FTSE 250&nbsp;companies, rather than buying into Bitcoin for an adrenaline rush.” data-reactid=”24″>That’s why I think average retail investors who plan long-term for comfortable retirements will be better off investing in stable FTSE 100 and FTSE 250 companies, rather than buying into Bitcoin for an adrenaline rush.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Where the Bitcoin price is now” data-reactid=”25″>Where the Bitcoin price is now

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="If you are following the price of Bitcoin,&nbsp;the world’s most popular cryptocurrency, you may agree with me when I say uncertainty is the only constant.&nbsp;&nbsp;” data-reactid=”26″>If you are following the price of Bitcoin, the world’s most popular cryptocurrency, you may agree with me when I say uncertainty is the only constant.  

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For example, in 2017, the price soared from under $1,000 to nearly $20,000. But it then fell below $7,000. By November 2018, it was below $4,000. Then in June 2019, Bitcoin was over $10,000.&nbsp;” data-reactid=”27″>For example, in 2017, the price soared from under $1,000 to nearly $20,000. But it then fell below $7,000. By November 2018, it was below $4,000. Then in June 2019, Bitcoin was over $10,000. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="But in early January 2020, Bitcoin was back around $7,000. As broader stock markets began falling in February, Bitcoin hovered around $9,000. By mid-March, it dropped to the $5,000 level. On 3 July, as I write, it is hovering at $9,100.” data-reactid=”28″>But in early January 2020, Bitcoin was back around $7,000. As broader stock markets began falling in February, Bitcoin hovered around $9,000. By mid-March, it dropped to the $5,000 level. On 3 July, as I write, it is hovering at $9,100.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Despite the increase in prices in recent years, there are simply not enough merchants using cryptocurrencies yet. In 2019, about $4 billion in bitcoin transactions was sent through payment processors. On the other hand, according to Nilson Report, “Purchase transactions on global general purpose card brands totaled 440.99 billion in 2019, up 19.4% over the previous year“.&nbsp;” data-reactid=”29″>Despite the increase in prices in recent years, there are simply not enough merchants using cryptocurrencies yet. In 2019, about $4 billion in bitcoin transactions was sent through payment processors. On the other hand, according to Nilson Report, “Purchase transactions on global general purpose card brands totaled 440.99 billion in 2019, up 19.4% over the previous year“. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="So wild price swings and high speculation are combined with a lack of global transaction demand. Clearly, investing hard-earned cash (that you want to grow for retirement years) in Bitcoin is not for everyone.” data-reactid=”30″>So wild price swings and high speculation are combined with a lack of global transaction demand. Clearly, investing hard-earned cash (that you want to grow for retirement years) in Bitcoin is not for everyone.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Blockchain technology is important” data-reactid=”31″>Blockchain technology is important

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="But there’s a way to have the best of both worlds through buying blockchain-relevant shares. Cryptocurrencies are based on blockchain technology, which can be described as a digital ledger, acting as a spreadsheet.&nbsp;” data-reactid=”32″>But there’s a way to have the best of both worlds through buying blockchain-relevant shares. Cryptocurrencies are based on blockchain technology, which can be described as a digital ledger, acting as a spreadsheet. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="In the future, blockchain applications are likely to impact agriculture, asset management, insurance, healthcare, retail, and supply chain management, to name a few areas.&nbsp;” data-reactid=”33″>In the future, blockchain applications are likely to impact agriculture, asset management, insurance, healthcare, retail, and supply chain management, to name a few areas. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For retail investors, companies that work with blockchain technology may be appropriate businesses to do due diligence on. Their shares may potentially be worthy additions to long-term portfolios.” data-reactid=”34″>For retail investors, companies that work with blockchain technology may be appropriate businesses to do due diligence on. Their shares may potentially be worthy additions to long-term portfolios.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Which FTSE companies would I consider? Several big pharma giants, such as AstraZeneca&nbsp;and&nbsp;GlaxoSmithKline, have collaborated to promote and cut the cost of drug discovery through increased use of blockchains.” data-reactid=”35″>Which FTSE companies would I consider? Several big pharma giants, such as AstraZeneca and GlaxoSmithKline, have collaborated to promote and cut the cost of drug discovery through increased use of blockchains.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Grocery stores and food manufacturers, such as&nbsp;Sainsbury‘s&nbsp;and&nbsp;Unilever, are looking at how blockchain could help them keep track of food in the supply chain.&nbsp;” data-reactid=”36″>Grocery stores and food manufacturers, such as Sainsbury‘s and Unilever, are looking at how blockchain could help them keep track of food in the supply chain. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Energy giants, including BP,&nbsp;Centrica, and&nbsp;Royal Dutch Shell, are exploring how blockchain technology can be used in the energy sector.&nbsp;” data-reactid=”37″>Energy giants, including BPCentrica, and Royal Dutch Shell, are exploring how blockchain technology can be used in the energy sector. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Some global banks, including&nbsp;HSBC Holdings,&nbsp;Lloyds,&nbsp;and&nbsp;Santander, are researching the potential use of blockchain-based banking solutions.” data-reactid=”38″>Some global banks, including HSBC HoldingsLloyds, and Santander, are researching the potential use of blockchain-based banking solutions.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Investing in FTSE 100 shares” data-reactid=”39″>Investing in FTSE 100 shares

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="In the coming years, I expect many FTSE 100 and FTSE 250 companies to embrace ‘blockchain’ technology. And I’d rather invest in these established global companies with robust businesses and stable cash flows. A good number of them also pay juicy dividends.” data-reactid=”40″>In the coming years, I expect many FTSE 100 and FTSE 250 companies to embrace ‘blockchain’ technology. And I’d rather invest in these established global companies with robust businesses and stable cash flows. A good number of them also pay juicy dividends.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="My Motley Fool colleagues regularly cover shares and funds that you could consider adding to a diversified retirement portfolio. They point out that despite various downturns and even crashes, in the long run, stock markets in the UK return about 6% to 8% annually, on average.” data-reactid=”41″>My Motley Fool colleagues regularly cover shares and funds that you could consider adding to a diversified retirement portfolio. They point out that despite various downturns and even crashes, in the long run, stock markets in the UK return about 6% to 8% annually, on average.

The post Forget the volatile Bitcoin price! I’d buy cheap FTSE 100 shares to retire wealthy appeared first on The Motley Fool UK.

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="tezcang has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline and Unilever. The Motley Fool UK has recommended HSBC Holdings and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.” data-reactid=”51″>tezcang has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline and Unilever. The Motley Fool UK has recommended HSBC Holdings and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2020