Crypto Sold my house and put it all into bitcoin.

Why Crypto Craze 3.0 is different

This time it's different?

 

It's been different since 2011. What's your point?

 

Reading the same over the weekend. Agree the narrative has changed since December 2017.

Question on the “store of value” case for BTC. It strikes me BTC is a high beta asset, the opposite of store of value. When the SHTF in March 2020, BTC and Gold were caned, with BTC fairing worse of all - substantially worse than S&P500, with the gold standard being fiat ; US Short term treasury. I would expect to extremely low or negative correlation for the store of value case to pass muster.

Genuinely appreciate thoughts on this point.

 

March 2020 was a liquidity event as everyone ran to cash. No asset was spared. What was interesting was the price action over the next few months. Both bitcoin and gold quickly regained ground. And the volatility going down was easily surpassed on the way up. To focus in on those 3 weeks in March, and ignoring the rest of the year is too microscopic.

Annual returns of bitcoin for 2020 was a gain of 300%.

Bitcoin is still an emerging asset class. And it's volatility is decreasing as it matures.

 

Right, so it’s high beta. It follows the movement of equity indices - to a much greater degree. I’d expect a flight to BTC in a market sell off if the “store of value” case was to hold up. So it’s clear that is not a store of value, it’s something else.

The gains aren’t in question.

 

Well by this logic, in a market sell off liquidity event, there is no asset that functions as a store of value except for cash.

 

Historically at times govt bonds and gold have shown negative correlation. Cash, no correlation. To me that’s the “store of value” case. Not something that’s value decreases by more than broad equity indices at times of pessimism.

I take your point on “maturing as an asset” as it could perform this role in the future I suppose...it’s just up to the participants and how they approach it.
Greater insto holding should in theory reduce volatility.

 

I think at this stage, the store of value case is still emerging as Bitcoin & the crypto space as a whole is still volatile, perhaps more so when facing completely unprecedented circumstances like what happened in March rather than say a regular equities market correction.

I think we are seeing a stronger and stronger case for the store of value, especially after the stimulus packages (I think I read somewhere 25% of the US money supply printed in the past year?!) and with the institutions starting to make significant moves in the space. Hence why some are saying this is still early days.

IMO it would not be realistic to say Bitcoin’s store of value case is fully here but as more large players come onboard this becomes more and more the case.

When looking at the scale of the inflows over the past year combined with a steady decline in the liquid supply, volatility is inevitable still.
But, with a growing market cap & more coin supply locked away (liquid supply has been steadily decreasing), this should provide reduced volatility as we move forward.

For now the space is still volatile (although BTC volatility has been dropping) but once the space matures, we could very well see much less volatility & then it would achieve a true store of value status. The certainty around the limited supply certainly has an appeal when liquidity is being created left, right and centre.

No question this is still an emerging asset and a rapidly evolving situation.

 

@Ouga thanks for the comments. agree that institutional adoption is a boon for the space. Crypto index / coin ETFs will be as well.

 

Many anticipated institutional adoption but Corporations buying into them has come as a bit of surprise. Will be interesting to see where BTC/ETH will end up in 5 years time with governments getting increasingly annoyed about them and many planning to launch their own "digital central currencies"

 

Also on the risk front it's worth keeping in mind the actual tech and changes in the space. The biggest one is perhaps quantum computing and it's ability to quickly crack codes.

Bitcoin is based on the premise that it gets harder and harder to mine . Quantum computing has the ability to completely change that. QC is still in an experimental stage but over the next 10 years has a high probability of becoming part of large server rooms.

 

I have never held crypto, however this is an interesting perspective. Short-term pullback and then a move to USD $120k+ before 3-4 years of consolidation.

Chart is log scale.

https://twitter.com/NorthstarCharts/status/1364140180861501446?s=20

 

Once a gambler always a gambler

You gamblers may win now but sooner or later you will lose it all on something else.

Selling your house to buy bitcoin?!? lol That is just pure gambling in my opinion. Might as well invest into selling drugs and hoping to not get caught by cops lol

 

You’re entitled to your opinion. I disagree. It was a no brainer from my point of view. Time will tell. I’m not selling anytime soon. Will only sell when I can pay in bitcoin or need to convert to dollars for living expenses. I plan to hold all I can to give to my kids.

 

And who told you that story? The losing gambler. He probably also said investing was risky and to play it safe.

 

There is a big difference between investing and gambling.

 

Totally agree with toozs. Anyone who is buying a bitcoin or any cryptocurrency needs to realise it is an empty asset. Since when a computed hash has become a currency.

I have 10 years experience in stock/futures trading and I only see a BC or any cryptocurrency as a gambling tool with high volatility but there is nothing behind it or any cryptocurrency. if you want to earn a lot as well as lose a lot buy stocks with 10x-100x leverage. I guarantee you will be earning/losing better than with BC but at least in this case you will own some stocks not just something that is only good for wasting a tremendous amount of electricity.

 

I may just do that as soon as I can take 100% ownership of my stocks and then in turn send that stock to someone on the other side of the world without the need of a trusted third party.
Bitcoin is not for everyone. If you don’t see the value of being able to hold your wealth somewhere where it cannot be confiscated, seized or inflated away then it probably isn’t for you. The only thing is, even if you choose not to directly hold you will inevitably have exposure to it within the next few years anyhow.

 

Bitcoin is in a bull market. Regardless if you believe in it or not, bull markets should not be wasted, as they can make a big difference to your total return. Getting some exposure to it, even at just 1% of your total portfolio, is wise.

 

Given you sold your house are all your eggs in one basket.. Have you 6 times your return? Why not take some profits?

What a ballsy call - well done!!!!

I'm heavy on uranium - but not putting my house on it