Be careful. Be very careful. A bitcoin story is coming your way, and this one might encourage you to do something risky or stupid. Alternatively, you could end up making a fair bit of money, just like the lucky punter who turned $100 into $3.2 million, after landing the first four bet on the Melbourne Cup.

And the latest bitcoin news story tells us that AMP is the first major super fund to take a punt on bitcoin. This could easily make a lot of mums and dads think if AMP’s doing it to the tune of $27 million, it must be safe. It’s not!

It's especially less safe after breaking US$100,000 for the first time recently, though there are many ‘experts’ tipping that it will go higher because President Donald Trump is a big supporter.

After his election win, Forbes reported that he told a Nashville bitcoin conference the following: “If crypto is going to define the future, I want it to be mined, minted and made in the USA”.

He promised to sack Securities and Exchange Commissioner Gary Gensler, to make the SEC have a friendlier stance towards the industry. So, since his election, bitcoin has gone from $US68,121 to $US101,577 this morning. That’s a 49% gain!

As a financial adviser I’d have to say that when any asset rises so rapidly in a short space of time you have to be careful of pullbacks. It’s especially risky when you’re punting/investing on Donald Trump.

I can recall a Penrith financial adviser who made news losing his client’s money in a risky investment, who said he went long the investment for his clients because the Packers were in it!

Deep down, my gut feeling says bitcoin is here for a long time, maybe forever, but it will be volatile. And that’s best education tip I can give.

This chart proves it.

If you want to be a bitcoin player, remember in March 2021 it was $61,000. By July, it was $31,000. Then in November 2021 it was $64,000. By year’s end, it was $16,000! If you can stomach such ups and downs, then bitcoin is your poison.

So, what about AMP and its $27 million in bitcoin? Well, it does manage $57 billion, so it’s only 0.05% of its total fund. I have clients who want to buy one bitcoin that’s now US$101,577 (A$159,040). And as he has $2.3 million in super, he’d be exposed to the tune of 6.9%.

That is way too big an exposure for a speculative investment. I’ve been trying to get them to tone down their desire to play bitcoin.

The important point I want to make is that it will probably rise higher over time, but it will have some selloffs, and they can be huge. This year, the cryptocurrency is up 149% but Zip Money (ZIP) is up 474%, but a few weeks ago it was up over 700%! While those who bought Zip at 27 cents late last year are still laughing, those who paid $3.50 on November 12 could be crying at their 16.2% loss in a month!

The AFR reported that “Caroline Bowler, chief executive of Australia-based crypto exchange BTC Markets, said she was ‘excited’ to see AMP investing in bitcoin”. She would say that because she works in a bitcoin business.

Right now, no other big super fund has publicly revealed a bitcoin play. CommSec isn’t even directly trading bitcoin ETFs, probably because it’s afraid customers would lose money and they’d be blamed.

I don’t like being a luddite when it comes to something new, but I know how little the average person understands risky investments. They only do their homework when they lose a lot of money! That’s when they look for someone to blame and it’s generally not themselves.

If you go into bitcoin, then understand that you could make or lose money, but be aware this product goes up by stairs but falls like an elevator.

Having a shot on bitcoin isn’t like buying BHP and hoping that China recovers next year, and the iron ore price goes up, taking the BHP share price with it, while getting a nice dividend each year. No, punting on bitcoin, especially at these elevated price levels helped by a less-than-reliable guy like Donald Trump, is like going to the TAB and hoping to get rich.