So what if bitcoin has crashed 50%? I’d rather buy UK dividend shares

I’m building up my wealth using UK dividend shares, and keeping well clear of Bitcoin.

New virtual money concept, Gold Bitcoins

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One of the many pleasures of building a balanced portfolio of UK dividend shares is that I can ignore all the hype surrounding cryptocurrencies. Although I hold one legacy Bitcoin, I never pay it much attention. So I was surprised to see its price had fallen by half this year, to around $31,000 at time of writing. 

I knew Bitcoin was doing badly, but not that badly. No doubt crypto obsessives are piling onto the message boards, yelling that this is a great buying opportunity. Frankly, I don’t care. I’m over Bitcoin. It’s UK dividend shares all the way for me now.

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I’m not bothered about Bitcoin

But why, crypto fans might ask? UK divided shares are fusty and boring. They will never double my money overnight, or make me a billionaire. They will just sit in my portfolio, giving me a little bit of income, and a little bit of growth.

And that’s exactly what I like about UK dividend shares. I use them to build a solid platform for my retirement income. I don’t expect them to double my money in a year. They might even halve in value, like Bitcoin just has. Even if they did, that wouldn’t put me off.

When my portfolio of UK dividend shares crashes, I jump on this as a buying opportunity. It’s a rare moment of excitement. I load up on my favourite FTSE 100 income stocks, then sit back and wait for them to do what history shows they have always done. Recover from a crash, and battle on.

By loading up on UK dividend shares when they’re down, I’d average down on my entry price. And here’s another way volatility works in my favour. Currently, I reinvest all my dividends for growth. So in a crash, my reinvested dividends would pick up relatively more stock. Which pay more dividends, which buy more stock. And on it goes, in a virtual circle.

I’d buy UK dividend shares today

I don’t get any income from my one Bitcoin, and never will. My tiny crypto stash may rebound and give me a blast of capital growth, or it may not. Nobody knows where it will go next (whatever they claim on message boards). What I do know is that my portfolio of dividend shares will continue to do what they do, giving me a little bit of income, and a little bit of growth.

They are not without risk. Shareholder payouts can be cut or cancelled. Share prices can fall and never recover. Companies can go bust. Yes, even FTSE 100 ones. I get around this by building a balanced portfolio of between 10 and 20 UK dividend shares, to spread my risk. When I retire, I’ll take those dividends as passive income, to top up my pensions. 

I’ll carry on buying UK dividend shares, regardless whether Bitcoin crashes another 50%, or rockets 50%. Who cares anymore?

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Harvey Jones doesn't hold any of the shares mentioned in this article. He holds one Bitcoin and a bit of Ethereum. The Motley Fool UK has no position in any of the shares mentioned. 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.

The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of investment advice. Bitcoin and other cryptocurrencies are highly speculative and volatile assets, which carry several risks, including the total loss of any monies invested. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

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