You are absolutely right. The discussion should be focused on the fact that even if we don’t really believe in BTCs 25% CAGR projection, should we invest in it.
The answer to this question is not easy. Because if investors start investing without having conviction in asset class , then they would not be resilient and would suffer losses during drawdowns.
This is why the conviction argument keeps coming back. In all honesty out of 100 people you ask, only 2-3 would be really convinced and rest are calling it a asymmetrical bet.
Anyhow. I won’t be able to contribute more on this discussion due to lack of knowledge on this topic. I just hope if the asset class grows then it doesn’t crash market for other asset classes and if it fails, then also it happens slowly or else we would trigger a big global meltdown.
I found #4 interesting. Does it mean people who invest in bitcoin ( referring to folks who are seriously invested in BTC , not just like lottery ticket) are going to benefit if US and global economy becomes unstable.
Not necessarily, but they sure prepare for it. As in, prep…are. Plus tinfoil. Guns. Nylon stockings. Shoot, a fella could have a pretty good weekend in Vegas with all that stuff! Purity of precious bodily fluids. You catch my drift?
In my opinion bitcoin will be strong in any scenario where money supply expands.
However, if there is a recession, equities will likely not perform great. Bitcoin (and gold) on the other hand will be relatively strong in a stagflation.
So it is rational to allocate a fraction of the portfolio to btc if you look for the optimal risk/return.
I do NOT think its bad to benefit from a shrinking economy as a small investor. Rich people benefit massively when they purchase bankrupt firms at dollars on the penny during recessions. Why should we restrict ourselves?
Sure. I am not saying it’s bad to benefit.
But if most people have have 0-5% of their portfolio in BTC, they would always have a problem if economy goes down.
If BTC goes up and everything else goes down, people would only benefit if they have decent/high allocation to BTC. And that would need real conviction which exists amongst few people only. As per data I saw less than 10% BTC wallets have higher than 10000 USD balance. More than 75% have less than 1000 USD. Unless everyone who holds BTC owns hundreds of wallets, it kind of shows the level of asset allocation.
Most people I know use BTC as „lottery ticket“ just in case it goes to million Dollars. Very few fundamentally believe in use case or asset class narrative.
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