Poll

What percent of your assets are invested in crypto currencies?

0%
126 (78.3%)
1-2%
12 (7.5%)
3-5%
8 (5%)
6-15%
5 (3.1%)
16-35%
5 (3.1%)
36%-60%
2 (1.2%)
61%+
3 (1.9%)

Total Members Voted: 161

Voting closed: October 07, 2021, 08:26:11 AM

Author Topic: POLL What percent of your assets are invested in crypto currencies?  (Read 4875 times)

MustacheAndaHalf

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There's been a few threads about crypto currencies, and some claims about crypto holdings of forum members.  So I thought why not gather data by creating a poll.

SpaceCow

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #1 on: September 30, 2021, 08:36:39 AM »
I put $3000 into ETH a few years ago during a dip. Haven't bought or sold since. Now it's more like $80,000. Decided not to rebalance because it was risky entertainment money from the start. My plan is not to rebalance or cash out for a few more years yet. I'm maxing out my tax-advantaged accounts, so I feel comfortable with the risk that crypto could tank. I feel like the future is fairly promising for ETH and BTC, however I am far from a crypto shill. Better this than stock picking or scratch off tickets, I think.
« Last Edit: September 30, 2021, 09:35:07 AM by SpaceCow »

simonsez

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #2 on: September 30, 2021, 09:18:19 AM »
I put $3000 into ETH a few years ago during a dip. Haven't bought or sold since. Now it's more like $80,000. Decided not to rebalance because it was risky entertainment money from the start. My plan is not to rebalance or cash out for a few more years yet. I'm maxing out my tax-advantaged accounts, so I feel comfortable with the risk that crypto could tank. I feel like the future is fairly promising for ETH and BTC, however I am far from a crypto shill. Better this than stock picking or scratch of tickets, I think.
Don't have a dog in this fight but can you expand on this?  Are you saying this only because your 3k is now worth 80k?  Or is this based on some type of fundamental investment advice where there would be reasons that choosing a cryptocurrency is more sound than choosing a stock generally speaking?

SpaceCow

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #3 on: September 30, 2021, 09:34:49 AM »
I put $3000 into ETH a few years ago during a dip. Haven't bought or sold since. Now it's more like $80,000. Decided not to rebalance because it was risky entertainment money from the start. My plan is not to rebalance or cash out for a few more years yet. I'm maxing out my tax-advantaged accounts, so I feel comfortable with the risk that crypto could tank. I feel like the future is fairly promising for ETH and BTC, however I am far from a crypto shill. Better this than stock picking or scratch of tickets, I think.
Don't have a dog in this fight but can you expand on this?  Are you saying this only because your 3k is now worth 80k?  Or is this based on some type of fundamental investment advice where there would be reasons that choosing a cryptocurrency is more sound than choosing a stock generally speaking?

I didn't really mean anything meaningful. I meant to say that I consider crypto speculation to be similar to stock picking or playing the lottery. I'm just saying that I think the odds might be a little better with crypto, and I think throwing 3k at it and watching it rise and fall is generally harmless. 

MustacheAndaHalf

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #4 on: October 04, 2021, 10:50:28 AM »
Although I created the poll, I actually fall between two of the categories.  With 0.6% crypto, I don't fit the 0% category.  So I rounded up and voted "1-3%" for my 0.6% allocation.

joe189man

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #5 on: October 04, 2021, 11:16:23 AM »
i selected 0%, as i have $0 today, but i plan on buying some and building a to be defined % of total assets.

Papa bear

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #6 on: October 04, 2021, 11:46:41 AM »
I’m at .00002128 crypto.  Venmo gave me free money to buy some so I said why not?


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RunningintoFI

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #7 on: October 04, 2021, 09:22:31 PM »
I am a low single digit crypto investor (1-3%).  I view it the same as skydiving - from a rational perspective there is no reason to jump out of a perfectly functional plane.  The only reason to do it is to have the experience and say "I did it".  The primary difference being that I don't die if my crypto shares crash back down to Earth.   

clarkfan1979

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #8 on: October 04, 2021, 10:23:31 PM »
This was a great idea.

I fall in the 0% category which represents 79%. However, I was originally thinking that at least 60% of the MMM community would be in the 1% to 5% range for asset allocation of crypto. I guess I was wrong.

BicycleB

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #9 on: October 04, 2021, 10:43:21 PM »
Agreed, good poll idea.

I speculate that the poll results will have a higher % crypto holders than the overall forum membership does, simply because the crypto-interested might answer the thread more than those uninterested. Then again 0% is winning so far.

travel2020

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #10 on: October 04, 2021, 10:47:31 PM »
I put some money in crypto at the start of this year, about $1500 in BTC and ETH. It’s been interesting to watch the swings. Quite a few seemed to coincide with pronouncements by Musk. At one point, the total was up to $6K, then dropped down to about half and currently at $4500. Not planning to put any more or take anything out for now.

I selected 0% as the original investment is .00X% of NW and selecting 1-2% didn’t seem right. Perhaps we need separate 0% and 0-1% buckets in the poll?




Gatzbie

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #11 on: October 05, 2021, 01:18:48 AM »
I have 5% sitting in a crypto interest account paying about 8% interest per year with current rates. Only getting about $3.50 a day but better than a bank savings account in my opinion.


MustacheAndaHalf

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #12 on: October 05, 2021, 09:31:59 AM »
I'm currently buying only BTC and ETH, which are the crypto currencies with the largest trading volume and history.  Crypto exposure is enough risk, without picking which smaller coin will become popular (or crash).

I speculate that the poll results will have a higher % crypto holders than the overall forum membership does, simply because the crypto-interested might answer the thread more than those uninterested. Then again 0% is winning so far.
I also worried that those interested in crypto would be more likely to take the poll - that's worth keeping in mind.  It's also why I did not mention this poll in a thread that motivated me to create it.

waltworks

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #13 on: October 05, 2021, 09:46:29 AM »
There are always people who prefer to swing for the fences for a (small) chance of striking it rich quickly. But the venn diagram of those who think that way and the folks on this forum probably overlaps VERY little.

Really, the only reason even a few people here are interested is that the tech industry is massively overrepresented. From my experience (which is pretty significant) with crypto folks, it's either tech industry and/or libertarian people who are super savvy and believe in the blockchain transforming everything (maybe 10% of the people I know who are into crypto) and then 90% FOMO people who know ZERO about either investing or blockchain.

-W

« Last Edit: October 05, 2021, 09:48:11 AM by waltworks »

waltworks

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #14 on: October 05, 2021, 09:50:16 AM »
I’m at .00002128 crypto.  Venmo gave me free money to buy some so I said why not?

I saw that Venmo promotion. It was hilarious: "Explore Crypto!"

Honestly it seemed more like a sign of the end stages of the crypto craze than anything. When you're trying to give away money to get people interested, that's not good.

Also, it's worth pointing out that I can already send and receive money for free instantly with.... Venmo...

-W
« Last Edit: October 05, 2021, 10:00:03 AM by waltworks »

Financial.Velociraptor

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #15 on: October 05, 2021, 01:09:04 PM »
6.95% as of yesterday's close.  But only 1.2% at the time of investment.  My cost basis has been majorly eclipsed by short and long term gains.

Sanitary Stache

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #16 on: October 05, 2021, 01:20:25 PM »
Agreed, good poll idea.

I speculate that the poll results will have a higher % crypto holders than the overall forum membership does, simply because the crypto-interested might answer the thread more than those uninterested. Then again 0% is winning so far.

I usually don't open the crypto threads, but wanted to represent to non-crypto gamblers for this poll.

TheAnonOne

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #17 on: October 05, 2021, 02:03:55 PM »
I've bought "A thousand here or there" over the past 6 years. Sitting on 400k+ right now. I need 1MM MORE to fat-fire so... if it doubles / triples over the winter in the last hoo-rah of this "cycle" then I get to win the lotto and retire.

None of the money I put in affected my normal VTSAX strategy, mostly got the cash from extra work, side gigs, maybe some bonus cash here or there.

Rosy

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #18 on: October 05, 2021, 05:43:01 PM »
My ultimate goal was $100K in 2021 instead of saving up for $100K in 3.5 years; using crypto to do it.
Finished last week - $112K - sweet success.

rebel_quietude

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #19 on: October 05, 2021, 06:03:20 PM »
I feel it's pretty much gambling at the moment, which seems like a popular perspective here.
That said . . .watching state and world bank entities react to it is absolutely fascinating.

pasadenafr

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #20 on: October 05, 2021, 06:12:52 PM »
I dabbled in it a few years ago (mostly for learning purposes). Sold after a couple of years.

Now I still have about $100 in BTC and BSV. Only keeping that because nobody wants to let me sell BSV 🤦🏻‍♀️

forgerator

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #21 on: October 05, 2021, 10:36:39 PM »
Crypto is a major investment for me. Started like 5% a few yrs ago and now it's close to 40% of my NW. If it rises anything like the 2017 year end bull run I think I can safely retire early and live off of DeFi income alone.

jojoguy

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #22 on: October 06, 2021, 06:19:19 AM »
Crypto is a major investment for me. Started like 5% a few yrs ago and now it's close to 40% of my NW. If it rises anything like the 2017 year end bull run I think I can safely retire early and live off of DeFi income alone.

I don`t think I`m going to raise more than what I initially invested, but I want to keep it compounding. Initially it was 10% of my investments when I started back in May. Now, it makes up probably 15% just through compounding. Defi especially looks great to get away from the more risky side of crypto. Terra Luna and Anchor Protocol is a great project. The 20% stable APY is a dream savings account.

Villanelle

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #23 on: October 06, 2021, 10:06:40 AM »
I've bought "A thousand here or there" over the past 6 years. Sitting on 400k+ right now. I need 1MM MORE to fat-fire so... if it doubles / triples over the winter in the last hoo-rah of this "cycle" then I get to win the lotto and retire.

None of the money I put in affected my normal VTSAX strategy, mostly got the cash from extra work, side gigs, maybe some bonus cash here or there.

Just curious, if it does double to the point you can retire, will you cash it out at that point?  At what point will you take your gains and run?

TheAnonOne

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #24 on: October 06, 2021, 10:18:42 AM »
I've bought "A thousand here or there" over the past 6 years. Sitting on 400k+ right now. I need 1MM MORE to fat-fire so... if it doubles / triples over the winter in the last hoo-rah of this "cycle" then I get to win the lotto and retire.

None of the money I put in affected my normal VTSAX strategy, mostly got the cash from extra work, side gigs, maybe some bonus cash here or there.

Just curious, if it does double to the point you can retire, will you cash it out at that point?  At what point will you take your gains and run?

1.6mm and I sell it all, maybe leaving a token amount. (Enough for cap gains)
« Last Edit: October 06, 2021, 10:24:52 AM by TheAnonOne »

ChickenStash

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #25 on: October 06, 2021, 12:33:15 PM »
I'm in for about 2% at the moment. I had a small windfall earlier this year and decided to dabble a bit. I'm planning on just sitting back and watching it do its thing and not add anything additional.

Financial.Velociraptor

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #26 on: October 06, 2021, 12:51:10 PM »
Can we get some color in the comments from the 3 who voted 61+%???

forgerator

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #27 on: October 06, 2021, 09:23:15 PM »
In crypto world when we say sell it all, I'm thinking to redefine it for myself as converting everything to USDC or DAI stable coins using a DEX. Thereafter I can enjoy high yields paying more than 15% on liquidity pairs on either Polygon or Avalanche. Whatever yields I get I can send them to an offramp like the Coinbase or Bitpay debit card.
This prevents from incurring a huge tax bill...
Anything wrong with this equation?

TheAnonOne

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #28 on: October 07, 2021, 11:53:04 AM »
In crypto world when we say sell it all, I'm thinking to redefine it for myself as converting everything to USDC or DAI stable coins using a DEX. Thereafter I can enjoy high yields paying more than 15% on liquidity pairs on either Polygon or Avalanche. Whatever yields I get I can send them to an offramp like the Coinbase or Bitpay debit card.
This prevents from incurring a huge tax bill...
Anything wrong with this equation?

You need to report and pay tax on the swapping to USDC not only once you take it to an exchange and bring it back to USD.

The very trading between two tokens in a dex is, by definition, selling one and buying the other.

davisgang90

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #29 on: October 07, 2021, 12:02:14 PM »
I'm at about .18%. It isn't even investment money, just some of my allowance I threw at Doge that I now have in BTC. I'll leave it for a bit and see what happens. I view it as gambling, not an investment.

MustacheAndaHalf

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #30 on: October 08, 2021, 08:18:00 AM »
Can we get some color in the comments from the 3 who voted 61+%???
Not a bad topic for a thread ... but I expect there would be lots of noise in a thread asking that question.  I hope they reply here, explaining how they reached over 61% in crypto.

My guess is younger investors who put it all in crypto and did well... someone with less to lose can risk it all and start over.  Someone near/in retirement, not so much.


... converting everything to USDC or DAI stable coins using a DEX. Thereafter I can enjoy high yields paying more than 15% on liquidity pairs on either Polygon or Avalanche.
The IRS considers cryptocurrency to be property.  When you sell cryptocurrencies for property (like another cryptocurrency), you owe tax on the basis in the original crypto (what you paid) and the value of the crypto you receive.
https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions

I don't know if the IRS has figured out staking income yet, but I prefer to take a conservative view with the IRS.  I would think of it as passive income, and expect to pay tax on it.

Rosy

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #31 on: October 09, 2021, 08:07:40 AM »
Tax Guides 2021
From Coin Desk
https://www.coindesk.com/policy/2021/02/26/crypto-tax-2021-a-complete-us-guide/

Tax Laws 2021
From Tax Bit - they are like the H&R Block of the crypto world 
https://taxbit.com/blog/cryptocurrency-tax-laws-in-2021-what-you-need-to-know

2021 Guide to Tax Rules
https://time.com/nextadvisor/investing/cryptocurrency/cryptocurrency-tax-guide/

A quick google search will give tax software and a crypto tax calculator
As long as it sits on the exchange or in your wallet you do not owe any taxes. 

forgerator

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #32 on: October 09, 2021, 08:56:37 AM »
I doubt IRS have the means to figure out what address an individual uses and which chain (bep20, ERC20, etc.) they use for their staking or exchange activities. At least not yet.

lifeanon269

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #33 on: October 11, 2021, 06:30:57 PM »
Can we get some color in the comments from the 3 who voted 61+%???

I voted for 61%+.

I've long been a big believer in bitcoin and what it stands for. I've written extensively on the subject on these forums, but have since been quiet on the subject since people on these forums tend to be stuck in their beliefs one way or the other more than most other places of discourse. So there doesn't seem to be much benefit in having that debate here.

I'm 38 and I've been a long time "mustachian" and have been saving between 50-60% of our (joint with my wife) income for many years. I started saving money in bitcoin back in 2015 when it was just a couple hundred dollars. It was at that point that I just made it a regular part of my after tax investment strategy. I've always maxed out my tax advantaged accounts first such as my 401k (403b for wife) and Roth IRA, etc. When it comes to stocks I just go with a passive strategy of index funds.  So after all that, a good portion of my after tax savings went into bitcoin. I've always been a big believer in investing in what you know. I don't know enough of any given company to choose to invest in them, so that's why I choose to go with index funds. But I have been deeply involved with bitcoin and its technology and so that's where I feel comfortable choosing to have my money there.

Since then, bitcoin just took off and has outpaced all my other investments by a large margin. I now have over 7 figures in bitcoin. I still believe in bitcoin and what it stands for, so I have no intention of cashing out or rebalancing in any way. I live with very modest annual expenses, so I just don't see the benefit of cashing out a large chunk at once and being forced to pay massive sums in capital gains simply to rebalance into other assets that I also hold a fair amount of. Rather, I can simply live well below the $80k lower tax bracket for long-term capital gains and instead pay 0% on any bitcoin expenses when I decide to FIRE in the next year or so. Volatility doesn't bother me in the slightest since my FIRE plan is very flexible and my expenses are low. At the end of the day, while I am extremely fortunate for the wealth that bitcoin has provided me, it was really my mustachian lifestyle and values that allowed me to achieve that. Had I been extravagantly spending with my income, then I never would've gained the wealth I have. Bitcoin chewed off several years from my original FIRE date, but I still would've been retiring extremely early by today's standards thanks to a frugal lifestyle even without bitcoin.

FWIW, I don't feel there is much value in the broader cryptocurrency market and 99%+ are just marketing and buzz words with little actual value for society and at worst, outright scams. Thus, I've never saved any money in anything other than bitcoin when it comes to crypto-currency.
« Last Edit: October 11, 2021, 06:33:57 PM by lifeanon269 »

BicycleB

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #34 on: October 11, 2021, 09:26:46 PM »
Thanks for clear and forthright reply, @lifeanon. Very methodical process.

Cameronq1

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #35 on: October 24, 2022, 12:36:50 AM »
I created five accounts for my income and from one account I constantly invest in cryptocurrencies. And I invest part of my income in gold as it will always be in value. Sometimes I need to invest in stocks, I also use a fifth account. As a rule, I spend 8% from that account on crypto, but I can spend about 2-3% on games like betting or casino because I win there more often than I just invest as cold money
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« Last Edit: October 29, 2022, 02:42:49 AM by Cameronq1 »

GilesMM

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #36 on: October 24, 2022, 05:54:26 AM »
Less than 1% but I don't consider crypto an investment since there is no underlying value.  They only have value if you can pawn them off on a bigger sucker, which I hope I can but no guarantee.

MustacheAndaHalf

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #37 on: October 24, 2022, 09:09:41 AM »
I created five accounts for my income and from one account I constantly invest in cryptocurrencies. ... I spend 8% from that account on crypto, but I can spend about 2-3% on games
Here you're buying crypto, but in another thread you're telling people to sell crypto.  Both posts within an hour of each other.

And based on the rules of gold economy "a dollar tomorrow cannot be more expensive than a dollar today" I would sell crypto

harvestbook

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #38 on: November 01, 2022, 07:59:59 AM »
Can we get some color in the comments from the 3 who voted 61+%???

I voted for 61%+.

I've long been a big believer in bitcoin and what it stands for. I've written extensively on the subject on these forums, but have since been quiet on the subject since people on these forums tend to be stuck in their beliefs one way or the other more than most other places of discourse. So there doesn't seem to be much benefit in having that debate here.


Has anything in your view changed in a year?

lifeanon269

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #39 on: November 04, 2022, 12:41:04 PM »
Has anything in your view changed in a year?

Nothing changed in the 7 years prior that made me change my mind. So I haven't seen anything in the last 1 year that would suddenly change my mind either. If anything, the last year of record inflation has only reaffirmed some of the reasons why I got into bitcoin in the first place.

the_gastropod

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #40 on: November 04, 2022, 01:15:02 PM »
Has anything in your view changed in a year?

Nothing changed in the 7 years prior that made me change my mind. So I haven't seen anything in the last 1 year that would suddenly change my mind either. If anything, the last year of record inflation has only reaffirmed some of the reasons why I got into bitcoin in the first place.

Are you suggesting Bitcoin functions as an inflation hedge?

Financial.Velociraptor

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #41 on: November 04, 2022, 02:55:45 PM »
My original percentage at time of basis was a little over 1%, with a target of 2%.  I tell people, it makes sense to have enough to materially participate if it goes to the moon, but no where near enough to derail your plans if it all comes down like a house of cards.  After gains in crypto and losses in market, I'm at about 6% now.   No plans to buy or sell.

JAYSLOL

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #42 on: November 04, 2022, 05:01:50 PM »
My original percentage at time of basis was a little over 1%, with a target of 2%.  I tell people, it makes sense to have enough to materially participate if it goes to the moon, but no where near enough to derail your plans if it all comes down like a house of cards.  After gains in crypto and losses in market, I'm at about 6% now.   No plans to buy or sell.

I used to think I wanted to hold 1-2% as well, but I don’t believe it has any underlying value, and I couldn’t come up with an answer to the question - what’s the plan if it drops and then just keeps dropping?  Do I sink a ton of money in to keep buying to hold 2% if it slowly drops to near nothing?  Or do I let the coins devalue and let it run down lower than 2%?  If so, what’s the point of owning it?  I decided to just sell everything, and I’m happy not to be trying to make money on pure speculation. 

MustacheAndaHalf

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #43 on: November 04, 2022, 06:47:32 PM »
My original percentage at time of basis was a little over 1%, with a target of 2%.  I tell people, it makes sense to have enough to materially participate if it goes to the moon, but no where near enough to derail your plans if it all comes down like a house of cards.  After gains in crypto and losses in market, I'm at about 6% now.   No plans to buy or sell.
I used to think I wanted to hold 1-2% as well, but I don’t believe it has any underlying value, and I couldn’t come up with an answer to the question - what’s the plan if it drops and then just keeps dropping?  Do I sink a ton of money in to keep buying to hold 2% if it slowly drops to near nothing?  Or do I let the coins devalue and let it run down lower than 2%?  If so, what’s the point of owning it?  I decided to just sell everything, and I’m happy not to be trying to make money on pure speculation.
You listed 4 negative scenarios and zero positive scenarios.  It's not a surprise someone sells after ignoring any potential upside.


If anything, the last year of record inflation has only reaffirmed some of the reasons why I got into bitcoin in the first place.
Are you suggesting Bitcoin functions as an inflation hedge?
Look at the past 12 months, where Bitcoin started off falling like a growth stock (or faster).  This is the only time Bitcoin has existed during inflation this high, and it has not acted as an inflation hedge.  The problem is that most people view Bitcoin as their riskiest asset (rightly so), which means they sell at the first sign of trouble.

But also note lifeanon269 said "some of the reasons".  The central bank printed money as needed, and then restricted money as needed.  Bitcoin isn't printed by the Fed, so it can provide some independence from USD.

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #44 on: November 05, 2022, 03:45:15 AM »
Not voted in the poll, but I am still holding around 2% of my actual networth in current Bitcoin value.
This is just the rest of one initial purchase about 10 or so years ago where I just wanted to try Bitcoin  out with a few mates. Sold off a bit a  year or two ago to recoup my original purchase plus 10% p.a. interest.
Not seeing it as part of my investment, it's now just "funny money". Maybe it will survive long-term and I may find a reason to sell it. Or it all burns in the zombie apocalypse ... neither way it will be an issue for me. I may look it up like last about every other 10 years or so, but not following the discussion - unless I stumble across some threads here.

lifeanon269

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #45 on: November 15, 2022, 06:42:16 AM »
Has anything in your view changed in a year?

Nothing changed in the 7 years prior that made me change my mind. So I haven't seen anything in the last 1 year that would suddenly change my mind either. If anything, the last year of record inflation has only reaffirmed some of the reasons why I got into bitcoin in the first place.

Are you suggesting Bitcoin functions as an inflation hedge?

CPI inflation doesn't just happen in a bubble. If you're buying something in response to CPI inflation to hedge against it, you're already too late. So if you're comparing price action of bitcoin to CPI and then coming to the conclusion that it is not a hedge against it, you're missing the entire point. CPI inflation doesn't just happen on its own.

If you look at Bitcoin, it is actually fairly correlated to Fed monetary policy; which makes sense. When the Fed is loose with monetary policy, bitcoin generally goes up in price (along with other scarce commodities). When the Fed tightens monetary policy, Bitcoin tends to go down. CPI inflation has a lot to do with monetary policy. CPI is (largely) a resultant impact on the economy due to loose monetary policy. Now that there is historic CPI inflation, the Fed must tighten monetary policy and thus things like bitcoin will retract. If you're buying bitcoin at this point in time to hedge against CPI inflation, you're too late. You're reacting to the results of years of loose monetary policy which must now reverse course.

When I bought bitcoin years ago, I didn't buy it because I was imminently worried about CPI inflation. I bought it because I knew that the Fed playing loose with monetary policy for years and years was not good policy and bitcoin was the antithesis of that (its monetary policy is much more restrictive). I knew at some point CPI inflation was coming as a result of that loose monetary policy, I just didn't know when. I felt that bitcoin at the time was a good option for my money due to the outlook I had. Bitcoin has proved me right in that regard.

If you're focusing on the price of bitcoin only during a period where there is high CPI inflation, but then also ignoring bitcoin's price during periods of easy money and low interest rates, then you're ignoring half the picture.
« Last Edit: November 15, 2022, 06:47:24 AM by lifeanon269 »

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #46 on: November 15, 2022, 08:37:12 AM »
Has anything in your view changed in a year?

Nothing changed in the 7 years prior that made me change my mind. So I haven't seen anything in the last 1 year that would suddenly change my mind either. If anything, the last year of record inflation has only reaffirmed some of the reasons why I got into bitcoin in the first place.

Are you suggesting Bitcoin functions as an inflation hedge?

CPI inflation doesn't just happen in a bubble. If you're buying something in response to CPI inflation to hedge against it, you're already too late. So if you're comparing price action of bitcoin to CPI and then coming to the conclusion that it is not a hedge against it, you're missing the entire point. CPI inflation doesn't just happen on its own.

If you look at Bitcoin, it is actually fairly correlated to Fed monetary policy; which makes sense. When the Fed is loose with monetary policy, bitcoin generally goes up in price (along with other scarce commodities). When the Fed tightens monetary policy, Bitcoin tends to go down. CPI inflation has a lot to do with monetary policy. CPI is (largely) a resultant impact on the economy due to loose monetary policy. Now that there is historic CPI inflation, the Fed must tighten monetary policy and thus things like bitcoin will retract. If you're buying bitcoin at this point in time to hedge against CPI inflation, you're too late. You're reacting to the results of years of loose monetary policy which must now reverse course.

When I bought bitcoin years ago, I didn't buy it because I was imminently worried about CPI inflation. I bought it because I knew that the Fed playing loose with monetary policy for years and years was not good policy and bitcoin was the antithesis of that (its monetary policy is much more restrictive). I knew at some point CPI inflation was coming as a result of that loose monetary policy, I just didn't know when. I felt that bitcoin at the time was a good option for my money due to the outlook I had. Bitcoin has proved me right in that regard.

If you're focusing on the price of bitcoin only during a period where there is high CPI inflation, but then also ignoring bitcoin's price during periods of easy money and low interest rates, then you're ignoring half the picture.
Interesting. So you're saying bitcoin appreciated in the years before our current episode of high CPI because market participants like yourself could foresee the eventual consequences of loose monetary policy, correct? Why did market participants with this foresight not pile into energy, Ibonds, interest-rate futures, gold, or short treasury instruments like TBT? Was it because bitcoin had an unlimited duration?

If you are right, then the new era of higher interest rates for a longer time and a falling supply of USD as promised by chairman Powell would seem to make today's environment a good time to get out of crypto, right? Policies are the exact opposite of the era when crypto prices were rising fast, so crypto should continue falling fast. I.e. anyone hodling crypto now is missing out on significant returns in the bond markets.

lifeanon269

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #47 on: November 15, 2022, 09:33:46 AM »
Interesting. So you're saying bitcoin appreciated in the years before our current episode of high CPI because market participants like yourself could foresee the eventual consequences of loose monetary policy, correct? Why did market participants with this foresight not pile into energy, Ibonds, interest-rate futures, gold, or short treasury instruments like TBT? Was it because bitcoin had an unlimited duration?

I don't think many of these are as correlative as you might think, aside from maybe gold here.


If you are right, then the new era of higher interest rates for a longer time and a falling supply of USD as promised by chairman Powell would seem to make today's environment a good time to get out of crypto, right? Policies are the exact opposite of the era when crypto prices were rising fast, so crypto should continue falling fast. I.e. anyone hodling crypto now is missing out on significant returns in the bond markets.

People are and have been getting out of crypto-currencies. Companies like FTX, Celsius, etc collapsed and are collapsing because people have been flocking from crypto-currencies since the tightening of monetary policies and thus their house of cards and leverage have collapsed. I am not worried about bitcoin going anywhere. If anything, the collapse of these third-party institutions will further solidify bitcoin as the main leader here.

I, myself, don't speculate on short-term fluctuations in monetary policy because, well, these policies are so unpredictable and at the whim of humans making decisions that are difficult to make. The bigger question that should be asked is whether in the long term, do you think governments and central banks will continue policies of austerity or do you think that at some point they'll revert back to monetary policies that continue to allow for expansive economies and government budgets? I know my answer here.

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #48 on: November 15, 2022, 12:03:06 PM »
If you are right, then the new era of higher interest rates for a longer time and a falling supply of USD as promised by chairman Powell would seem to make today's environment a good time to get out of crypto, right? Policies are the exact opposite of the era when crypto prices were rising fast, so crypto should continue falling fast. I.e. anyone hodling crypto now is missing out on significant returns in the bond markets.

People are and have been getting out of crypto-currencies. Companies like FTX, Celsius, etc collapsed and are collapsing because people have been flocking from crypto-currencies since the tightening of monetary policies and thus their house of cards and leverage have collapsed. I am not worried about bitcoin going anywhere. If anything, the collapse of these third-party institutions will further solidify bitcoin as the main leader here.

I, myself, don't speculate on short-term fluctuations in monetary policy because, well, these policies are so unpredictable and at the whim of humans making decisions that are difficult to make. The bigger question that should be asked is whether in the long term, do you think governments and central banks will continue policies of austerity or do you think that at some point they'll revert back to monetary policies that continue to allow for expansive economies and government budgets? I know my answer here.
If I can interject, the medium term (3-5 years) is interesting as well.  Bitcoin is down 75% from its peak, so if it recovers, it quadruples.  When I look at Bitcoin's history of crashing 75% or more and recovering, 4x seems more likely than 0x.

It's also interesting to compare TQQQ (3x Nasdaq) and BITO (Bitcoin futures ETF) over the past 12 months: its a very close match.  In this market, Bitcoin has been about 3x as risky as aggressive growth stocks in Nasdaq (including big tech).  I think this also explains Bitcoin's price decline - if people are scared of future returns, the first thing they sell is the riskiest asset: Bitcoin.  I can even vouch for that myself, as I sold all of my crypto in the first week of 2022.  But I didn't sell off all my risky growth stocks until months later, sadly.

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Re: POLL What percent of your assets are invested in crypto currencies?
« Reply #49 on: November 15, 2022, 12:19:44 PM »
Some of my money is waiting for cash calls in illiquid investments over the next few years.  I could the rest as my portfolio.

[1%]
I've bought individual crypto currencies on Gemini, which is a large US based crypto exchange.  I also like that the founders were incredibly rich from Facebook before they created Gemini: they didn't do this to get rich.

[2%]
I hold BITO call options.  If I calculate the market exposure, I have other call options (especially SPY, S&P 500) that impact that as well.  And then I'd have to dilute my non-leveraged holdings to arrive at a fair market exposure.  I haven't calculated that yet.

[4%]
I bought shares of Riot Blockchain ($RIOT), which fell further than the price of most crypto.  If you look at various crypto ETFs, most of them hold RIOT shares.  I think it's fair to count RIOT as crypto exposure in my portfolio.

All together, 7% of my "portfolio" (liquid investments) is crypto.  In the bigger picture, most of my NW is investing outside public markets, so from that perspective crypto is less than 3% of my overall NW.

 

Wow, a phone plan for fifteen bucks!