What do you think of adding a low% of crypto allocation

[boarder42]

Not only do I think BTC will be worth almost nothing compared to it's current valuation

Not only are you wrong, you're just completely guessing, more like hoping honestly.

Yep I'm wrong.

You're not guessing/hoping at all

Thing is if I'm wrong I'm still a multi millionaire. If you're wrong you may be worth nothing

[boarder42]

Not only do I think BTC will be worth almost nothing compared to it's current valuation

Not only are you wrong, you're just completely guessing, more like hoping honestly.

Yep I'm wrong.

You're not guessing/hoping at all

Thing is if I'm wrong I'm still a multi millionaire. If you're wrong you may be worth nothing

This is where I don't understand you.  You're rich, but you sound really upset and bitter that maybe some others are making gains and catching up.

Let's look at the reality, the here and now.  There is a fake internet coin currently worth $61,400.  It's 'worth nothing' but it costs $61,400 and is traded all day every day in massive volume.  It has over $1Trillion market cap and the total crypto market cap is approaching $3Trillion.  There are people/entities with billions of dollars invested, I was just looking at a $1Billion wallet the other day which was invested in many of the same projects as I am.  Obviously just looking to throw it all away and be 'worth nothing', that's right, this massive industry that is now built around crypto and everyone invested in it is just going to pack up and go home.  It'll all crash to zero, put a fork in it, it's done!  LMAO.  We'll all just forget about Bitcoin and Ethereum and decentralized finance and the Binance exchange will just pack up shop and start selling Beanie Babies and Tulip Bulbs.

Meanwhile I've made a few hundred k this year, paid all my bills, cashed out my initial investment so I'm free-carried yet I'm somehow the dumb one and you're a genius?  In January my crypto PF was 8K.  LMAO.  Why are you so emotional about this?  I'm not and I've got 50% of everything riding on it.

Glad you agree it's beanie babies and tulip bulbs. They're all but forgotten as far as money is concerned.

So now we can add too big to fail to fomo and it only goes up got it.



Not sure what emotion you think is in this. Is that like a personal crutch you lean on without a better response. You keep citing emotion being a factor.   

[Juan Ponce de León]

Your whole argument appears to be that the current reality isn't real, because you don't like it.

[boarder42]

Current reality?  Pretty sure Tesla made more in the last few weeks than BTC did. Curious as to why you haven't moved to that reality?  What's your timetable for this reality you are living in? 

[Metalcat]

Not only do I think BTC will be worth almost nothing compared to it's current valuation

Not only are you wrong, you're just completely guessing, more like hoping honestly.

Yep I'm wrong.

You're not guessing/hoping at all

Thing is if I'm wrong I'm still a multi millionaire. If you're wrong you may be worth nothing

This is where I don't understand you.  You're rich, but you sound really upset and bitter that maybe some others are making gains and catching up.

Lol, I'm sorry, but it's always kind of entertaining to watch people get riled up arguing with B42. If you aren't familiar with him, then I can see why you think there's bitterness of personal feelings, but those who have known him for years know that's just his style.

I doubt he has anything even close to a personal feeling about other people making money in crypto. He's not arguing with you so aggressively because he has aggressive feelings about crypto, he's arguing with you aggressively because...well...he argues aggressively.

If an argument doesn't make sense to him, this is how he reacts. He's not upset, he's just tenacious and rigorous in his arguments.

He'll chew this bone as long as you try to pull it from him, and then he'll go merrily along his way totally unaffected by it. He's not bitter or angry, he's just fucking tenacious. And he's not going to let it go unless and until your arguments make sense to him.

[Juan Ponce de León]

^^ LMAO okay.  I think i'll leave it there in that case.  It's pointless arguing about it honestly, noone is going to change their minds.  The best thing about these crypto deniers is they will never be wrong, no matter what happens they can always say "It'll go to zero, any day now".

BTC 1k = bitcoin is not backed by anything, worthless and going to zero
BTC 10k = bitcoin is not backed by anything, worthless and going to zero
BTC 30k = bitcoin is not backed by anything, worthless and going to zero
BTC 60k = bitcoin is not backed by anything, worthless and going to zero
BTC 100k = bitcoin is not backed by anything, worthless and going to zero
BTC 1000k = bitcoin is not backed by anything, worthless and going to zero

There's just no winning that argument is there..

[Metalcat]

^^ LMAO okay.  I think i'll leave it there in that case.  It's pointless arguing about it honestly, noone is going to change their minds.  The best thing about these crypto deniers is they will never be wrong, no matter what happens they can always say "It'll go to zero, any day now".

BTC 1k = bitcoin is not backed by anything, worthless and going to zero
BTC 10k = bitcoin is not backed by anything, worthless and going to zero
BTC 30k = bitcoin is not backed by anything, worthless and going to zero
BTC 60k = bitcoin is not backed by anything, worthless and going to zero
BTC 100k = bitcoin is not backed by anything, worthless and going to zero
BTC 1000k = bitcoin is not backed by anything, worthless and going to zero

There's just no winning that argument is there..

I don't see this as an argument against anything he's said.

I'm not saying his predictions are right, but I have yet to see anyone truly dismantle the basis of his position.

As I've said many times, I'm looking to be convinced, but so far, that hasn't happened, and B42 is making a lot of sense to me even if I don't necessarily buy his predictions. His arguments can be right, but his predictions wrong.

Meanwhile, I have yet to see a solid crypto argument that fully makes sense to me other than the fact that there's potential to make a lot of money. That can also be true along side most things B42 argues being correct.

This is what's so frustrating about the debate.

[Metalcat]

Thing is if I'm wrong I'm still a multi millionaire.

Someone who both brags about being a multi millionaire, and yet qualifies for medicaid children's insurance.

Need to explore CHIP now and understand how that works and what limitations are if anyone knows or has data that'd be great.

"Eligible within the state’s CHIP income range, based on family income, and any other state specified rules in the CHIP state plan."
https://www.medicaid.gov/chip/eligibility/index.html

How is this relevant to crypto??

[waltworks]

I'm a FIRED multimillionaire and keeping your kids off of CHIP is actually quite difficult, as it's entirely income based. It's one of the reasons I still do a little bit of work. When our kids ended up on CHIP it was a big problem as there were no providers nearby, so I can see how Boarder42 would be interested in the topic.

If you're not a young(ish) FIRE person with kids, it might sound like B42 is being a weird hypocrite cheapskate or something, but this is actually a common issue for some of us simply because your income level, regardless of assets, determines your CHIP status. Furthermore there is *nothing you can do* to get off of CHIP and buy your own insurance if your income is too low.

And of course it has zero to do with crypto; I assume you were just trying to mock B42 for some reason.

-W

[boarder42]

I'm a FIRED multimillionaire and keeping your kids off of CHIP is actually quite difficult, as it's entirely income based. It's one of the reasons I still do a little bit of work. When our kids ended up on CHIP it was a big problem as there were no providers nearby, so I can see how Boarder42 would be interested in the topic.

If you're not a young(ish) FIRE person with kids, it might sound like B42 is being a weird hypocrite cheapskate or something, but this is actually a common issue for some of us simply because your income level, regardless of assets, determines your CHIP status. Furthermore there is *nothing you can do* to get off of CHIP and buy your own insurance if your income is too low.

And of course it has zero to do with crypto; I assume you were just trying to mock B42 for some reason.

-W

Thanks for that info. Proximity of care is important and something that would help us determine what we should do with our income level since in RE it's in our control. 

Great to detail a thread about something that's not related to fire with something that's very valuable to people on the path to fire.

I can figure out all the monetary costs and advantages myself which including childcare start to get extremely beneficial to early retirees with young care. My original plan was to keep them off chip. But I'm not 100% sure now as again the money works out as a hedge against early sorr since most social programs and tax credits are income based so we can obtain significantly lower cash out flows early.

You can debate the morality of such things til you're blue in the face but in reality we're likely going to contribute way more long term due to RMDs. The optimal thing if we could assume we'll have no large drop in the first 6 years would be to convert to the max of the 12% which kills most of these services. But the short term risk is cash outflows to combat sorr and that's much more important to an early firee.

[boarder42]

Man crypto is such a hit it's pulling in some valuable new forum members with alot to say.

[Jeferson]

I think it's not a bad idea, I am not saying to put all your money in crypto as I don't do that either. But a small portion of my funds is located in crypto. In the past, I focused primarily on stacking BTC and ADA, but recently I focus on SOL which is predicted to perform very well in the upcoming years. It's basically like a better version of Cardano, with more potential.

[Juan Ponce de León]

Bitcoin doesn't go up in value because it may one day be used in businesses to buy goods and services.  It goes up in value because it is a scarce asset  that people want to hold and don't want to sell.  There's only 21 million bitcoins and that's all there will ever be.  The network is still in its growth phase with millions of new users coming in and we're all just fighting for a piece of that pie.  The amount traded on exchanges which sets the price is actually very low, the vast majority of bitcoin is stored away in offline wallets for the long term, no one is looking to spend it in shops, noone spends gold bullion or apple shares in shops either, it's a long term investment.

So bitcoin isn't a currency. It's an asset?

It's literally called a cryptocurrency.

It's quite obviously an asset, it has a current market cap of nearly $1.2Trillion.  You can call it whatever you want and by this stage it doesn't matter what the original intentions of some supposed Japanese guy in a basement were when he created Bitcoin, bitcoin is now it's own beast and all that matters now is how bitcoin is being used and valued and adopted globally and where it is headed into the future.  Bitcoin and crypto in general is here to stay, I honestly would not want to be one of the people who knew all about bitcoin in these early days, argued about it on the internet all day until they were blue in the face but never owned any and completely missed the bus. 

Soon Bitcoins market cap value will flip silver and after that there is only Amazon, Google, Saudi Aramco, Apple and Microsoft to go on the way to flipping Gold which is about a 10x away for BTC.  For reference BTC has done roughly a 238x since 2015.  It has been said that Bitcoin is a monetary black hole that will suck up and dominate all other asset classes.  I'm yet to see anything to suggest that it is not progressively doing exactly that.

so its only gone up since 2015 so based on that information i've decided it can only go up and dominate the world.  Good luck 6 years is an infinitely small time in the money game.

and FOMO sorry i missed that part of your post in the middle there. 

so there we have it folks the reason to hold BTC is FOMO and it always goes up.  If you don't have FOMO over this and don't believe 6 years of it always goes up makes it "a long term investment" there is no reason to be in it.

You sound very upset, please try not to get emotional over this.  I'll stick to my opinion and you stick to yours.  My opinion has made me a lot of money this year so I'm fairly happy with it for now.  Let's see what the future brings.  So exciting isn't it.

@Juan Ponce de León , are there conditions under which you'd sell some Bitcoin to lock in those gains?

Hello

Sent from my CPH2217 using Tapatalk

I did already answer that question LMAO. 

[FLBiker]

As I've said many times, I'm looking to be convinced, but so far, that hasn't happened, and B42 is making a lot of sense to me even if I don't necessarily buy his predictions. His arguments can be right, but his predictions wrong.

Meanwhile, I have yet to see a solid crypto argument that fully makes sense to me other than the fact that there's potential to make a lot of money. That can also be true along side most things B42 argues being correct.

This is what's so frustrating about the debate.

I think one of the problems with this thread is that we're really comparing apples and oranges.  I don't think it really makes sense to compare crypto to index fund investing.  I think it would make more sense to compare it to day trading or forex.  I don't mean this as a knock -- plenty of people do this, and some of them make a lot more money than I'll ever have.  For me, though, a big appeal of the investment strategy that I've followed (index funds) is that it is reliable, and requires no luck, special knowledge, or timing.  I don't need to do a lot of research or pay attention to prices.  It's simple.  For these same reasons, I don't day trade or use options or margin.  For me, having a strategy that is simple, proven over time, and reproducible (meaning anyone can do it and expect to get similar results) is what makes this stuff a real source of freedom.

I have a 6 year old.  When she starts working (say in 10-15 years) and is making her first investment choices, I suspect she would still be able to do what I did and get a similar result.  I started investing seriously at 30 and have a portfolio of $1.3 million 15 years later.  Crypto could be very popular (in terms of being used as a payment platform) by that time, but I think it will look very different as an investment (either because it will have stabilized or crashed).  The alternative would be that the prices continue to increase dramatically forever, but I don't think that anyone believes that.

It's undeniable that Bitcoin has outgained the stock market over the last 10 years.  But it's also undeniable that the stock market has a much longer track record of delivering returns that have consistently out performed inflation, bonds, etc.  So, ultimately, I think it comes down to what you're looking for.  Do you want to find the current strategy for beating the market, or are you interested in a much longer-used strategy for reaching financial independence?  With the former (whether it's crypto or something else) you could make tons of money but it will take a lot more work and engagement, and the risk of going bust is higher.  The latter, on the other hand, is much more simple and reliable, but it isn't necessarily the fastest.  I'm in the latter camp, but I recognize that this is a matter of personal preference (much like risk tolerance).

I have enjoyed the back and forth of this thread, though, as it has helped me to clarify my own ideas.

[MustacheAndaHalf]

Economist Mohamed A. El-Erian said the stock and bond markets are split right now.  Stocks are relatively calm, while the bond market's volatility reflects uncertainty over what central banks will do.  Surprisingly, he suggested the situation could get more money moving into crypto.  There's fears of inflation, but uncertainty in bonds, which gives crypto an opportunity.

(Warning: Video and audio will play - not a text article)
https://www.cnbc.com/video/2021/11/08/bond-and-equity-markets-are-showing-a-big-split-right-now-mohamed-el-erian.html

[Metalcat]

As I've said many times, I'm looking to be convinced, but so far, that hasn't happened, and B42 is making a lot of sense to me even if I don't necessarily buy his predictions. His arguments can be right, but his predictions wrong.

Meanwhile, I have yet to see a solid crypto argument that fully makes sense to me other than the fact that there's potential to make a lot of money. That can also be true along side most things B42 argues being correct.

This is what's so frustrating about the debate.

I think one of the problems with this thread is that we're really comparing apples and oranges.  I don't think it really makes sense to compare crypto to index fund investing.  I think it would make more sense to compare it to day trading or forex.  I don't mean this as a knock -- plenty of people do this, and some of them make a lot more money than I'll ever have.  For me, though, a big appeal of the investment strategy that I've followed (index funds) is that it is reliable, and requires no luck, special knowledge, or timing.  I don't need to do a lot of research or pay attention to prices.  It's simple.  For these same reasons, I don't day trade or use options or margin.  For me, having a strategy that is simple, proven over time, and reproducible (meaning anyone can do it and expect to get similar results) is what makes this stuff a real source of freedom.

I have a 6 year old.  When she starts working (say in 10-15 years) and is making her first investment choices, I suspect she would still be able to do what I did and get a similar result.  I started investing seriously at 30 and have a portfolio of $1.3 million 15 years later.  Crypto could be very popular (in terms of being used as a payment platform) by that time, but I think it will look very different as an investment (either because it will have stabilized or crashed).  The alternative would be that the prices continue to increase dramatically forever, but I don't think that anyone believes that.

It's undeniable that Bitcoin has outgained the stock market over the last 10 years.  But it's also undeniable that the stock market has a much longer track record of delivering returns that have consistently out performed inflation, bonds, etc.  So, ultimately, I think it comes down to what you're looking for.  Do you want to find the current strategy for beating the market, or are you interested in a much longer-used strategy for reaching financial independence?  With the former (whether it's crypto or something else) you could make tons of money but it will take a lot more work and engagement, and the risk of going bust is higher.  The latter, on the other hand, is much more simple and reliable, but it isn't necessarily the fastest.  I'm in the latter camp, but I recognize that this is a matter of personal preference (much like risk tolerance).

I have enjoyed the back and forth of this thread, though, as it has helped me to clarify my own ideas.

To be fair, when I say I'm looking to be convinced, I don't mean that I'm looking to be convinced to buy individual crypto coins.

It's already been established by people on both sides of the debate that in my particular case, because I'm perfectly happy with my level of wealth and returns that there's no argument to buy coins at this point except as speculation.

That was my first question: is there any argument to be made that I will miss out on anything except gains by not buying these coins now? As if they becomes integrated more into the regular economy, they'll just become part of the financial ecosystem and be captured by index funds and pension funds eventually. I'll just miss out on possible outsized gains that I don't care about.

Okay cool. That was established. No need for me to bother thinking about buying one of these individual coins. That provided me A LOT of clarity through the noise from both sides.

Now, when I say I'm looking to still be convinced, what I mean is that I'm still looking to be convinced about the utility and predictions around crypto.

I *get* that an enormous amount of people delve into understanding crypto and then become overwhelmingly convinced about how AMAZING and REVOLUTIONARY it is. And when I talk to actual crypto experts and read endless articles, I don't experience the same reaction. I see a lot of potential, but no clear path forward in terms of utility, and every example I'm given, like the Ticketmaster, example, seems to be offering a solution to a problem that doesn't exist because of a currency issue and wouldn't be solved by a new currency either.

That said, I'm am definitely starting to wrap my mind around NFTs. It kind of baffles me, because I contrary to my high level of activity here, I am NOT a child of the internet. You see me here all the time because this is basically the only social media I use. So NFTs sounds absurd to me personally, but as someone who has dated A LOT of software dudes who went fucking gaga for Sims and Second Life back in the day, I can grasp the mentality of the population that sees value in NFTs.

Coins though? In their current form?
My brain just refuses to grasp the hype, and the moment I find myself resistant to something new, the moment I have a reaction of the old man sitting on his porch ranting about "Young kids these days with their internet dog money! Back in my day you wrapped your bills in a rubber band and that was good enough for me!" I immediately start seeking out information to disprove my intuitive position.

And I will either become convinced of the value of current individual coins, or it will take so long that history happens in the meantime and I get my answer.

What I've been looking at are top coins that aren't sky rocketing in value, that aren't projected to sky rocket in value, and trying to understand why they are still touted as big players.

An example is EOS. It's worth about $5 a coin and sky high projections put it at hitting a whopping $22 in 2022. It was called the "Etherium killer" and has had some struggles, but many sources are still really bullish on it. It also apparently runs some of the highest number of actual transactions, which means it's actually used more than the most valuable coins.

I've read at least 100 articles about why this is, and I still can't put my finger on *exactly* why it seems to be immune to explosive value compared to other, similar coins.

As I said, I understand its issues and drawbacks, but the other coins have equally huge or bigger drawbacks, especially in terms of energy consumption, and everything else noted in this thread, particularly about Bitcoin.

So if someone can give me a common sense explanation as to why certain coins blow up to such extreme levels and others, which are hyped just as much done, I would appreciate that.

[ChpBstrd]

As I've said many times, I'm looking to be convinced, but so far, that hasn't happened, and B42 is making a lot of sense to me even if I don't necessarily buy his predictions. His arguments can be right, but his predictions wrong.

Meanwhile, I have yet to see a solid crypto argument that fully makes sense to me other than the fact that there's potential to make a lot of money. That can also be true along side most things B42 argues being correct.

This is what's so frustrating about the debate.

I think one of the problems with this thread is that we're really comparing apples and oranges.  I don't think it really makes sense to compare crypto to index fund investing.  I think it would make more sense to compare it to day trading or forex.  I don't mean this as a knock -- plenty of people do this, and some of them make a lot more money than I'll ever have.  For me, though, a big appeal of the investment strategy that I've followed (index funds) is that it is reliable, and requires no luck, special knowledge, or timing.  I don't need to do a lot of research or pay attention to prices.  It's simple.  For these same reasons, I don't day trade or use options or margin.  For me, having a strategy that is simple, proven over time, and reproducible (meaning anyone can do it and expect to get similar results) is what makes this stuff a real source of freedom.

I have a 6 year old.  When she starts working (say in 10-15 years) and is making her first investment choices, I suspect she would still be able to do what I did and get a similar result.  I started investing seriously at 30 and have a portfolio of $1.3 million 15 years later.  Crypto could be very popular (in terms of being used as a payment platform) by that time, but I think it will look very different as an investment (either because it will have stabilized or crashed).  The alternative would be that the prices continue to increase dramatically forever, but I don't think that anyone believes that.

It's undeniable that Bitcoin has outgained the stock market over the last 10 years.  But it's also undeniable that the stock market has a much longer track record of delivering returns that have consistently out performed inflation, bonds, etc.  So, ultimately, I think it comes down to what you're looking for.  Do you want to find the current strategy for beating the market, or are you interested in a much longer-used strategy for reaching financial independence?  With the former (whether it's crypto or something else) you could make tons of money but it will take a lot more work and engagement, and the risk of going bust is higher.  The latter, on the other hand, is much more simple and reliable, but it isn't necessarily the fastest.  I'm in the latter camp, but I recognize that this is a matter of personal preference (much like risk tolerance).

I have enjoyed the back and forth of this thread, though, as it has helped me to clarify my own ideas.

I can relate @FLBiker. I feel a bit of gratitude every time I think about how lucky I am to live in an era when I can click a button and invest in the outcomes of thousands of companies - which is essentially the growth of the overall economy as occurs as more and more people worldwide increase their productivity and seek out ways to create more value as humanity continues its march from subsistence activities to industrial work. Compare this world to my prospects had I been born in 1900, or 1800, or 1100. Back then, either there were no markets whereby a person could retire or they were generally unavailable to regular folks. Back then I would have had to farm for any meager wealth I had, with the strength of my body being the upper limit on my productivity and earnings potential, and having lots of children would have been the only "social security" imaginable for when I could no longer work. "Retirement" was not a concept except for the political elites.

In this awesome generation, though, I can ponder whether I want to spend 30 years of my life in a state of leisure, or 40, and the only tradeoffs to consider are NOT buying a bunch of crap that was not available to or needed by people a few generations ago! Never has humanity been offered such a bargain. It's mine for the taking. It's proven to work, and this is not a gamble or a long shot, because the plan involves owning the means of production. 

To look at this wild opportunity and say "that's not enough, I want to YOLO everything I own on speculative collectibles as a long shot bid to get rich quick, mostly because they went up in the past" seems like passing up on an outstanding opportunity to retire after only 10-15 years of work in order to chase the dream of retiring after only 5-6 years of work. It also sounds like the setup to every investment bubble story.

Sure, time is valuable, but so is risk. At some point, the risks involved with attempts to shave off time to retirement become so high, only a fraction of people taking such risks succeed. We won't hear about the failed cases, just like we didn't hear much about the people who worked another 20 years because they put it all in Pets.com, Beanie Babies, silver futures, or any one of dozens of hedge funds that had a great few years followed by collapse, but they were real people. Even if one gambles with only a portion of one's assets, why take such gambles when one's alternative is about as good an outcome as any human can reasonably expect? And if one is going to gamble in zero-sum markets for things with no utility, why not pick any other gamble? Forex, commodity contracts, options YOLOs, or day trading at least involve things with utility? Betting on both black and red in roulette yields steady returns until it doesn't. Why must everyone gamble on the same one particular thing being talked about incessantly by financial media?

[MustacheAndaHalf]

Juan Ponce de León - That's helpful, thanks.  I'm trying to view crypto as a speculation on what might be used in the future.  Established networks seem to fit that approach.  It's still hard to figure out how much is people buying and holding, and how much is transactions.

Malcat - I prefer Google as middle man over the phone book.  Crypto could replace an existing middle man.  As to my post you wondered about, the other poster claimed they would still be a multi-millionaire if crypto crashed, which seems to me like a bullying tactic.  I'm surprised all my ELI5 explanations got nothing from you, but this caught your attention.

Rosy - The number of transactions would include both speculators and people conducting business, wouldn't it?  Meaning, if I sell my ETH to someone who pays me USD, that's speculation.  If I sell my ETH to buy a product from a store, that's closer to a payment network.  Right now, I don't have a good way to separate speculation from payment network usage.

[boarder42]

As I've said many times, I'm looking to be convinced, but so far, that hasn't happened, and B42 is making a lot of sense to me even if I don't necessarily buy his predictions. His arguments can be right, but his predictions wrong.

Meanwhile, I have yet to see a solid crypto argument that fully makes sense to me other than the fact that there's potential to make a lot of money. That can also be true along side most things B42 argues being correct.

This is what's so frustrating about the debate.

I think one of the problems with this thread is that we're really comparing apples and oranges.  I don't think it really makes sense to compare crypto to index fund investing.  I think it would make more sense to compare it to day trading or forex.  I don't mean this as a knock -- plenty of people do this, and some of them make a lot more money than I'll ever have.  For me, though, a big appeal of the investment strategy that I've followed (index funds) is that it is reliable, and requires no luck, special knowledge, or timing.  I don't need to do a lot of research or pay attention to prices.  It's simple.  For these same reasons, I don't day trade or use options or margin.  For me, having a strategy that is simple, proven over time, and reproducible (meaning anyone can do it and expect to get similar results) is what makes this stuff a real source of freedom.

I have a 6 year old.  When she starts working (say in 10-15 years) and is making her first investment choices, I suspect she would still be able to do what I did and get a similar result.  I started investing seriously at 30 and have a portfolio of $1.3 million 15 years later.  Crypto could be very popular (in terms of being used as a payment platform) by that time, but I think it will look very different as an investment (either because it will have stabilized or crashed).  The alternative would be that the prices continue to increase dramatically forever, but I don't think that anyone believes that.

It's undeniable that Bitcoin has outgained the stock market over the last 10 years.  But it's also undeniable that the stock market has a much longer track record of delivering returns that have consistently out performed inflation, bonds, etc.  So, ultimately, I think it comes down to what you're looking for.  Do you want to find the current strategy for beating the market, or are you interested in a much longer-used strategy for reaching financial independence?  With the former (whether it's crypto or something else) you could make tons of money but it will take a lot more work and engagement, and the risk of going bust is higher.  The latter, on the other hand, is much more simple and reliable, but it isn't necessarily the fastest.  I'm in the latter camp, but I recognize that this is a matter of personal preference (much like risk tolerance).

I have enjoyed the back and forth of this thread, though, as it has helped me to clarify my own ideas.

I can relate @FLBiker. I feel a bit of gratitude every time I think about how lucky I am to live in an era when I can click a button and invest in the outcomes of thousands of companies - which is essentially the growth of the overall economy as occurs as more and more people worldwide increase their productivity and seek out ways to create more value as humanity continues its march from subsistence activities to industrial work. Compare this world to my prospects had I been born in 1900, or 1800, or 1100. Back then, either there were no markets whereby a person could retire or they were generally unavailable to regular folks. Back then I would have had to farm for any meager wealth I had, with the strength of my body being the upper limit on my productivity and earnings potential, and having lots of children would have been the only "social security" imaginable for when I could no longer work. "Retirement" was not a concept except for the political elites.

In this awesome generation, though, I can ponder whether I want to spend 30 years of my life in a state of leisure, or 40, and the only tradeoffs to consider are NOT buying a bunch of crap that was not available to or needed by people a few generations ago! Never has humanity been offered such a bargain. It's mine for the taking. It's proven to work, and this is not a gamble or a long shot, because the plan involves owning the means of production. 

To look at this wild opportunity and say "that's not enough, I want to YOLO everything I own on speculative collectibles as a long shot bid to get rich quick, mostly because they went up in the past" seems like passing up on an outstanding opportunity to retire after only 10-15 years of work in order to chase the dream of retiring after only 5-6 years of work. It also sounds like the setup to every investment bubble story.

Sure, time is valuable, but so is risk. At some point, the risks involved with attempts to shave off time to retirement become so high, only a fraction of people taking such risks succeed. We won't hear about the failed cases, just like we didn't hear much about the people who worked another 20 years because they put it all in Pets.com, Beanie Babies, silver futures, or any one of dozens of hedge funds that had a great few years followed by collapse, but they were real people. Even if one gambles with only a portion of one's assets, why take such gambles when one's alternative is about as good an outcome as any human can reasonably expect? And if one is going to gamble in zero-sum markets for things with no utility, why not pick any other gamble? Forex, commodity contracts, options YOLOs, or day trading at least involve things with utility? Betting on both black and red in roulette yields steady returns until it doesn't. Why must everyone gamble on the same one particular thing being talked about incessantly by financial media?

This is how i view it.  I took very quickly to the thought of index investing upon finding this in 2014.  I think my history of trading stocks actively since I was 10 until finding this at 27 plays into my opinion on speculative investing like this. I "tried" to get rich faster for 17 years albeit with considerably smaller amounts of money but losing half your money at 11 years old in the dot com bubble still hurts b/c its relative.  So when i see stuff like this come up here i'm just like cool some new flashy thing that some people will get rich on and some people will get poor on.  And in this particular case the entire planet gets hurt b/c of it. 

The shockingly simple math and the double edged sword of cutting expenses combined with predictable long term index investing is already the cheat code to life.  And now we're seeing people be like maybe i can get there in half the time and trade none of my lifestyle.  Maybe you can but its not a predictable bet its a pure gamble at this point. 

There will always be some hot new thing and this is the same as daytrading etc which is why so many are vocally against it.  What are the risks that come up every time someone mentions allocating a certain portion of their investment to individual stock picking or daytrading or options etc.  Well the biggest risk is you do really well and win big and think you've got it all figured out and then you FIRE on your 6% SWR that your strategy supports only to find out it doesn't work long term you got lucky for a little bit.  Maybe you even get out at the right time. What happens when the next crypto like craze hits and you go more into it this time maybe all in and it turns out to be tulips and beanie babies. (which this still could be regardless of what personal opinion is - Overwhelming BTC has been deemed a "store of value" by supporters of it in this thread which means its a collectible)

So what do i think of adding a low % of crypto - I still think its a fundamentally bad play for the avg investor in the world which is what most people are.  But people like to gamble and win so its likely better than playing black jack or buying a lottery ticket if you can completely compartmentalize the money you have there and not increase your stake based on emotions.

[Metalcat]

Malcat - I prefer Google as middle man over the phone book.  Crypto could replace an existing middle man.  As to my post you wondered about, the other poster claimed they would still be a multi-millionaire if crypto crashed, which seems to me like a bullying tactic.  I'm surprised all my ELI5 explanations got nothing from you, but this caught your attention.

Because I don't need crypto explained to me like I'm 5.

But when I see a specific use case presented that doesn't make sense to me, I ask my clarifying questions.

I understand how Google displaces Yellopages. I can't grasp how crypto would displace Ticketmaster. I'm not saying it won't, but I am failing to perceive the market forces that would cause it to be displaced, since every argument I've seen is how crypto would benefit the consumer and Ticketmaster has never benefited the consumer in the first place, and yet still exists. So if their lack of utility to the consumer was a market force that would make them disappear, they would have disappeared ages ago.

Unfortunately, "being beneficial to the consumer" is not the driving force behind, well, the vast overwhelming majority of businesses. Sometimes utility is what's used to gain market share, that's what people are sold on as the benefit of capitalism, but that's not actually how it works, it's only part of the picture.

[forgerator]

To be honest, everyone is entitled to their opinion. I have the exact opposite experience where I lost a ton in the stock market but gained orders of magnitude back through crypto. Yet we cannot say one or the other is the right investment for anyone.

[Roland of Gilead]

So on these meme coins which have gone up a million percent or more, who is on the losing side of this?  Everyone who is cashing out, someone is going to be left holding a bag.

[onecoolcat]

So on these meme coins which have gone up a million percent or more, who is on the losing side of this?  Everyone who is cashing out, someone is going to be left holding a bag.

I haven't checked this thread in a couple days but as far as I know none is advocating for meme coins here.

[boarder42]

To be honest, everyone is entitled to their opinion. I have the exact opposite experience where I lost a ton in the stock market but gained orders of magnitude back through crypto. Yet we cannot say one or the other is the right investment for anyone.

You might be the only person in this entire thread claiming to not invest in the stock market bc it's a losing battle. If you lost in the stock market you were clearly not following the basic investing advice given here. Now with some short term speculation in a current fad you made some money.

[FLBiker]

To be honest, everyone is entitled to their opinion. I have the exact opposite experience where I lost a ton in the stock market but gained orders of magnitude back through crypto. Yet we cannot say one or the other is the right investment for anyone.

Yes and no.  Perhaps comes down to the question that we're trying to answer.

For me, the question has been something like "What is the best way for me to almost certainly reach financial independence in a reasonable amount of time?"  For others, the question appears to be something like "What is the best way for me to potentially reach financial independence as quickly as possible?"  The question may be a matter of personal opinion.  Once you know the target, though, I do think there are objectively better and worse ways of reaching it.

If, like me, your primary financial question is the former, it's objectively true that you're better off investing in broad-based, low-fee index funds than trying to pick individual stocks or crypto coins.  This isn't necessarily the answer to the second question, though, which is why I think folks are sometimes talking past each other on this thread.

At the same time, there is a part of me that thinks that the first question is objectively better.  If the goal is financial independence, surely certainty / reliability / reproducibility has to be part of it, no?  Otherwise, by definition, the approach will work for some, fail for more, and thus isn't (as I understand it) a true source of independence.  I'm willing to concede, though, that this may not be objectively true -- it might just be that I hold my opinion very strongly.

Or perhaps I'm articulating the second question incorrectly.  It isn't mine, after all.  Maybe it's more accurate to express it as "What is the best way for me to potentially make a lot of money as quickly as possible?" and it isn't explicitly about a desire for financial independence.  If that's the case, taking chances makes more sense.  Again, though, that isn't a mindset I can really relate to, so I could still be stating it incorrectly.  Regardless, I've definitely found this thread to be helpful in clarifying some fundamental aspects of my investing philosophy.

[boarder42]

To be honest, everyone is entitled to their opinion. I have the exact opposite experience where I lost a ton in the stock market but gained orders of magnitude back through crypto. Yet we cannot say one or the other is the right investment for anyone.

Yes and no.  Perhaps comes down to the question that we're trying to answer.

For me, the question has been something like "What is the best way for me to almost certainly reach financial independence in a reasonable amount of time?"  For others, the question appears to be something like "What is the best way for me to potentially reach financial independence as quickly as possible?"  The question may be a matter of personal opinion.  Once you know the target, though, I do think there are objectively better and worse ways of reaching it.

If, like me, your primary financial question is the former, it's objectively true that you're better off investing in broad-based, low-fee index funds than trying to pick individual stocks or crypto coins.  This isn't necessarily the answer to the second question, though, which is why I think folks are sometimes talking past each other on this thread.

At the same time, there is a part of me that thinks that the first question is objectively better.  If the goal is financial independence, surely certainty / reliability / reproducibility has to be part of it, no?  Otherwise, by definition, the approach will work for some, fail for more, and thus isn't (as I understand it) a true source of independence.  I'm willing to concede, though, that this may not be objectively true -- it might just be that I hold my opinion very strongly.

Or perhaps I'm articulating the second question incorrectly.  It isn't mine, after all.  Maybe it's more accurate to express it as "What is the best way for me to potentially make a lot of money as quickly as possible?" and it isn't explicitly about a desire for financial independence.  If that's the case, taking chances makes more sense.  Again, though, that isn't a mindset I can really relate to, so I could still be stating it incorrectly.  Regardless, I've definitely found this thread to be helpful in clarifying some fundamental aspects of my investing philosophy.

I'd say both of your 2nd two questions are not what this forum is actually about and what the blog was founded upon.  there are plenty of sites and forums like reddit wall street bets for people following that 2nd path. 

The question posed here could be posed about litterally any asset that isnt a broad based index

what do you think of adding a low percent of corn futures
what do you think of adding a low percent of tsla
what do you think of adding a low percent of forex
what do you think of adding a low percent of blackjack bets
what do you think of adding a low percent of air jordans
what do you think of adding a low percent of teletubbies - (you guys just don't get it, its coming back and these things going to be the next shiba inu!)

I mean the answer to most of these is probably shouldn't mess with it.  but many here do have a small percentage of money they allocate to play around with b/c I'd wager most never really got the chance to play around much with money in the stock market and gambling releases biological responses that humans crave.  Being cognizant of this and knowing it could affect your larger pile of money in the future when say the sp500 makes 0% for 10 years and your play money makes you crypto gains like the last 10 years - you may start to question your foundational structure you built your FI plans on.  This is the biggest risk to any amount of alternative play money IMO.

[MustacheAndaHalf]

Malcat - I prefer Google as middle man over the phone book.  Crypto could replace an existing middle man.  As to my post you wondered about, the other poster claimed they would still be a multi-millionaire if crypto crashed, which seems to me like a bullying tactic.  I'm surprised all my ELI5 explanations got nothing from you, but this caught your attention.

I understand how Google displaces Yellopages. I can't grasp how crypto would displace Ticketmaster. I'm not saying it won't, but I am failing to perceive the market forces that would cause it to be displaced, since every argument I've seen is how crypto would benefit the consumer and Ticketmaster has never benefited the consumer in the first place, and yet still exists. So if their lack of utility to the consumer was a market force that would make them disappear, they would have disappeared ages ago.

Unfortunately, "being beneficial to the consumer" is not the driving force behind, well, the vast overwhelming majority of businesses. Sometimes utility is what's used to gain market share, that's what people are sold on as the benefit of capitalism, but that's not actually how it works, it's only part of the picture.

Who are you quoting after the word "Unfortunately"?  It's not me.  It looks like you're creating a strawman argument with your quote, and then disagreeing with the quote you made up.

[Metalcat]

Malcat - I prefer Google as middle man over the phone book.  Crypto could replace an existing middle man.  As to my post you wondered about, the other poster claimed they would still be a multi-millionaire if crypto crashed, which seems to me like a bullying tactic.  I'm surprised all my ELI5 explanations got nothing from you, but this caught your attention.

I understand how Google displaces Yellopages. I can't grasp how crypto would displace Ticketmaster. I'm not saying it won't, but I am failing to perceive the market forces that would cause it to be displaced, since every argument I've seen is how crypto would benefit the consumer and Ticketmaster has never benefited the consumer in the first place, and yet still exists. So if their lack of utility to the consumer was a market force that would make them disappear, they would have disappeared ages ago.

Unfortunately, "being beneficial to the consumer" is not the driving force behind, well, the vast overwhelming majority of businesses. Sometimes utility is what's used to gain market share, that's what people are sold on as the benefit of capitalism, but that's not actually how it works, it's only part of the picture.

Who are you quoting after the word "Unfortunately"?  It's not me.  It looks like you're creating a strawman argument with your quote, and then disagreeing with the quote you made up.

Sorry, no, I'm not quoting you, I'm quoting a number of crypto proponents who have made use arguments for crypto currencies that hinge on being beneficial to the consumer, and it doesn't make sense to me.

[ChpBstrd]

To be honest, everyone is entitled to their opinion. I have the exact opposite experience where I lost a ton in the stock market but gained orders of magnitude back through crypto. Yet we cannot say one or the other is the right investment for anyone.

Yes and no.  Perhaps comes down to the question that we're trying to answer.

For me, the question has been something like "What is the best way for me to almost certainly reach financial independence in a reasonable amount of time?"  For others, the question appears to be something like "What is the best way for me to potentially reach financial independence as quickly as possible?"  The question may be a matter of personal opinion.  Once you know the target, though, I do think there are objectively better and worse ways of reaching it.

If, like me, your primary financial question is the former, it's objectively true that you're better off investing in broad-based, low-fee index funds than trying to pick individual stocks or crypto coins.  This isn't necessarily the answer to the second question, though, which is why I think folks are sometimes talking past each other on this thread.

At the same time, there is a part of me that thinks that the first question is objectively better.  If the goal is financial independence, surely certainty / reliability / reproducibility has to be part of it, no?  Otherwise, by definition, the approach will work for some, fail for more, and thus isn't (as I understand it) a true source of independence.  I'm willing to concede, though, that this may not be objectively true -- it might just be that I hold my opinion very strongly.

Or perhaps I'm articulating the second question incorrectly.  It isn't mine, after all.  Maybe it's more accurate to express it as "What is the best way for me to potentially make a lot of money as quickly as possible?" and it isn't explicitly about a desire for financial independence.  If that's the case, taking chances makes more sense.  Again, though, that isn't a mindset I can really relate to, so I could still be stating it incorrectly.  Regardless, I've definitely found this thread to be helpful in clarifying some fundamental aspects of my investing philosophy.

This reminds me of Walter White's dilemma in Breaking Bad; he must get rich within a short timeframe or fail, so he is driven to an extreme strategy with extreme risks. I think you're right that MMM/Bogleheads/standard financial advice is constantly in tension with perspectives that require getting rich within a low single digit number of years, if not months. WallStreetBets, social media, and lotteries cater to (or victimize?) those who have imposed speed requirements upon themselves.*

When a MMM cultist says they have a strategy to get rich and retire in 12 years with index funds, and someone else on the internet says "bro, those are boomer returns, you could have made 5,000% on Nonamecoin and GME next-day-expiration call options last week" what's missing from the conversation is a discussion of risk. If 2,000 people try the strategy across the next two decades, how many end up rich and how many end up broke? If the number is 2 rich and 1,998 broke, the lesson to be learned about the internet is the story of the 2 rich ones will be replicated everywhere until it looks like the obvious outcome.

Also, if a strategy promoted on the speculative sites starts cranking out failures, the focus will seamlessly shift to the next thing as if all those people who lost their nest eggs and added a decade to their working careers never existed. The old fad becomes an Obviously Dumb Thing To Do compared to the new fad, which is full of potential. This is in contrast to, for example, EarlyRetirementNow.com, which obsesses about portfolio failures that occurred a century or more ago! You might find some snarky comments about past bubbles or investment fads in the abstract, but never the compelling "it changed my life" or "I made $xxx,xxx in three weeks" personal stories like you get when people are winning. 

You see the same dynamic with weight loss. Legitimate nutritionists, trainers, and coaches will develop multi-year plans for obese people, but magic pills advertised on the internet promise results within weeks. Some victims might rationalize that they could try a dozen of these pills in half the time the legitimate professionals say their strategies will require, and at a fraction of the cost. We know how the story ends. More importantly, we know why there is a market for magic weight loss pills - because the promise of faster is irresistible.

Walter White himself got rich quick, but it wouldn't have been much of a series if he had been murdered a few episodes in. That's why the plot didn't go that direction. The plot couldn't go that more likely direction, because then there wouldn't be a show. There's a lesson buried in there.

*Many of the people who impose speed requirements on retirement feel compelled to do so because they're strivers with life-sucking, high-stress, long-hours jobs. In this way, high-pressure jobs corral people into high-stakes gambles, a likelihood of eventual failure, and increased odds of being stuck in such a job even longer. Desperation is never a position of strength, and the popularity of crypto or meme stocks is a measure of desperation in our world.

[index]

The thing that bothers me about crypto is all the justification people are using to make it a stupid high % of their asset allocation. There are plenty of small cap stocks and even some large cap stocks that have great 5 and 10 year returns. If you asked if I thought there was a problem adding a low % allocation to TSLA on the forum, people would ask what a small % allocation is exactly and advise you to keep your fun money to under 5-10%. People here are trying to justify their 50% crypto positions as safe because it's "currency" and a "store of value" and everyone is "adopting it" etc. All of the same arguments could be made for holding a stupid high % of Tesla. 

If you want to hold a high % of crypto then fine, but don't expect a different response than the person who starts a thread defending a 50% allocation to a single stock.

What bothers me is crypto now has a market cap over 1T (i've seen 3T thrown around here as well). We saw what happened to the overall economy when $2-3T of housing value was destroyed in 2008. What happens to the overall economy when/if there is a major hack or government crackdown on crypto and 1-3T of value is destroyed?

[boarder42]

The thing that bothers me about crypto is all the justification people are using to make it a stupid high % of their asset allocation. There are plenty of small cap stocks and even some large cap stocks that have great 5 and 10 year returns. If you asked if I thought there was a problem adding a low % allocation to TSLA on the forum, people would ask what a small % allocation is exactly and advise you to keep your fun money to under 5-10%. People here are trying to justify their 50% crypto positions as safe because it's "currency" and a "store of value" and everyone is "adopting it" etc. All of the same arguments could be made for holding a stupid high % of Tesla. 

If you want to hold a high % of crypto then fine, but don't expect a different response than the person who starts a thread defending a 50% allocation to a single stock.

What bothers me is crypto now has a market cap over 1T (i've seen 3T thrown around here as well). We saw what happened to the overall economy when $2-3T of housing value was destroyed in 2008. What happens to the overall economy when/if there is a major hack or government crackdown on crypto and 1-3T of value is destroyed?

this is another argument as to why it won't fail which i do not understand.  It's too big to fail doesn't make sense to me. 

[dandarc]

The thing that bothers me about crypto is all the justification people are using to make it a stupid high % of their asset allocation. There are plenty of small cap stocks and even some large cap stocks that have great 5 and 10 year returns. If you asked if I thought there was a problem adding a low % allocation to TSLA on the forum, people would ask what a small % allocation is exactly and advise you to keep your fun money to under 5-10%. People here are trying to justify their 50% crypto positions as safe because it's "currency" and a "store of value" and everyone is "adopting it" etc. All of the same arguments could be made for holding a stupid high % of Tesla. 

If you want to hold a high % of crypto then fine, but don't expect a different response than the person who starts a thread defending a 50% allocation to a single stock.

What bothers me is crypto now has a market cap over 1T (i've seen 3T thrown around here as well). We saw what happened to the overall economy when $2-3T of housing value was destroyed in 2008. What happens to the overall economy when/if there is a major hack or government crackdown on crypto and 1-3T of value is destroyed?

this is another argument as to why it won't fail which i do not understand.  It's too big to fail doesn't make sense to me.

That's because crypto itself cannot be too big to fail - it is not an institution that our governments rely heavily on. The big banks might get too intertwined with crypto, and they might be deemed too big to fail. How that plays out for some average schmuck who is just holding crypto likely won't be nearly as good as it works out for the huge banks.

[onecoolcat]

I noticed the anti-crypto folks here constantly claim the pro-crypto folks say XYZ but in reality it's the opposite.  The post always start with something like, "I keep reading the pro-crypto folks say XYZ but..."  Why I this so common on one side and why don't they rebut the actual arguments raised?

[boarder42]

I noticed the anti-crypto folks here constantly claim the pro-crypto folks say XYZ but in reality it's the opposite.  The post always start with something like, "I keep reading the pro-crypto folks say XYZ but..."  Why I this so common on one side and why don't they rebut the actual arguments raised?

please go re read the entire thread there are many comments that have been made by pro crypto folks about the size of crypto and how that means it will stick around. i'm not going to go pull all the direct quotes from everyone every time someone questions when they said something b/c honestly i dont care.  crypto will not make me rich b/c i dont own any but its highly likely to make alot of people poor who are over tilted either here or in the world.

[ChpBstrd]

The thing that bothers me about crypto is all the justification people are using to make it a stupid high % of their asset allocation. There are plenty of small cap stocks and even some large cap stocks that have great 5 and 10 year returns. If you asked if I thought there was a problem adding a low % allocation to TSLA on the forum, people would ask what a small % allocation is exactly and advise you to keep your fun money to under 5-10%. People here are trying to justify their 50% crypto positions as safe because it's "currency" and a "store of value" and everyone is "adopting it" etc. All of the same arguments could be made for holding a stupid high % of Tesla. 

If you want to hold a high % of crypto then fine, but don't expect a different response than the person who starts a thread defending a 50% allocation to a single stock.

What bothers me is crypto now has a market cap over 1T (i've seen 3T thrown around here as well). We saw what happened to the overall economy when $2-3T of housing value was destroyed in 2008. What happens to the overall economy when/if there is a major hack or government crackdown on crypto and 1-3T of value is destroyed?

this is another argument as to why it won't fail which i do not understand.  It's too big to fail doesn't make sense to me.

That's because crypto itself cannot be too big to fail - it is not an institution that our governments rely heavily on. The big banks might get too intertwined with crypto, and they might be deemed too big to fail. How that plays out for some average schmuck who is just holding crypto likely won't be nearly as good as it works out for the huge banks.

"Too big to fail" was a phrase applied to banks which had to be bailed out by the US government, using established mechanisms such as the FDIC and overnight lending markets. In the event of a crypto-burst, there will be no government bailout because there are no legal mechanisms or existing bureaucracies to make crypto holders whole. Additionally, there would be too much political heat to invent such mechanisms on the fly. It would be more like 2000 than 2008.

[GuitarStv]

The thing that bothers me about crypto is all the justification people are using to make it a stupid high % of their asset allocation. There are plenty of small cap stocks and even some large cap stocks that have great 5 and 10 year returns. If you asked if I thought there was a problem adding a low % allocation to TSLA on the forum, people would ask what a small % allocation is exactly and advise you to keep your fun money to under 5-10%. People here are trying to justify their 50% crypto positions as safe because it's "currency" and a "store of value" and everyone is "adopting it" etc. All of the same arguments could be made for holding a stupid high % of Tesla. 

If you want to hold a high % of crypto then fine, but don't expect a different response than the person who starts a thread defending a 50% allocation to a single stock.

What bothers me is crypto now has a market cap over 1T (i've seen 3T thrown around here as well). We saw what happened to the overall economy when $2-3T of housing value was destroyed in 2008. What happens to the overall economy when/if there is a major hack or government crackdown on crypto and 1-3T of value is destroyed?

this is another argument as to why it won't fail which i do not understand.  It's too big to fail doesn't make sense to me.

That's because crypto itself cannot be too big to fail - it is not an institution that our governments rely heavily on. The big banks might get too intertwined with crypto, and they might be deemed too big to fail. How that plays out for some average schmuck who is just holding crypto likely won't be nearly as good as it works out for the huge banks.

"Too big to fail" was a phrase applied to banks which had to be bailed out by the US government, using established mechanisms such as the FDIC and overnight lending markets. In the event of a crypto-burst, there will be no government bailout because there are no legal mechanisms or existing bureaucracies to make crypto holders whole. Additionally, there would be too much political heat to invent such mechanisms on the fly. It would be more like 2000 than 2008.

Agreed that there won't be a bailout for people who own crypto.  But there wasn't a bailout for the people who took out loans on houses that they couldn't afford either.  That's a big part of why 2008 was a serious problem.  Reckless investors and banks who didn't give a shit about buying/trading garbage for lots of money seems pretty similar though.  Getting rich on crypto has a disturbingly similar feel to buying houses subprime mortgages.

How many times did you hear "But housing only goes up!"?

[ChpBstrd]

The thing that bothers me about crypto is all the justification people are using to make it a stupid high % of their asset allocation. There are plenty of small cap stocks and even some large cap stocks that have great 5 and 10 year returns. If you asked if I thought there was a problem adding a low % allocation to TSLA on the forum, people would ask what a small % allocation is exactly and advise you to keep your fun money to under 5-10%. People here are trying to justify their 50% crypto positions as safe because it's "currency" and a "store of value" and everyone is "adopting it" etc. All of the same arguments could be made for holding a stupid high % of Tesla. 

If you want to hold a high % of crypto then fine, but don't expect a different response than the person who starts a thread defending a 50% allocation to a single stock.

What bothers me is crypto now has a market cap over 1T (i've seen 3T thrown around here as well). We saw what happened to the overall economy when $2-3T of housing value was destroyed in 2008. What happens to the overall economy when/if there is a major hack or government crackdown on crypto and 1-3T of value is destroyed?

this is another argument as to why it won't fail which i do not understand.  It's too big to fail doesn't make sense to me.

That's because crypto itself cannot be too big to fail - it is not an institution that our governments rely heavily on. The big banks might get too intertwined with crypto, and they might be deemed too big to fail. How that plays out for some average schmuck who is just holding crypto likely won't be nearly as good as it works out for the huge banks.

"Too big to fail" was a phrase applied to banks which had to be bailed out by the US government, using established mechanisms such as the FDIC and overnight lending markets. In the event of a crypto-burst, there will be no government bailout because there are no legal mechanisms or existing bureaucracies to make crypto holders whole. Additionally, there would be too much political heat to invent such mechanisms on the fly. It would be more like 2000 than 2008.

Agreed that there won't be a bailout for people who own crypto.  But there wasn't a bailout for the people who took out loans on houses that they couldn't afford either.  That's a big part of why 2008 was a serious problem.  Reckless investors and banks who didn't give a shit about buying/trading garbage for lots of money seems pretty similar though.  Getting rich on crypto has a disturbingly similar feel to buying houses subprime mortgages.

How many times did you hear "But housing only goes up!"?

It's a good point that the people who were actually foreclosed, held mortgage assets or derivatives, or who bought Lehman / AIG stock were not made whole, or really helped in any way. Bailouts benefitted areas adjacent to the central crater, such as propping up the value of homes which had not yet been foreclosed, propping up banks which had not yet failed, and propping up the markets for stocks and bonds that had not already gone bankrupt. This was where the political will was located, not in the already bankrupt and powerless. Plus, there was a moralistic narrative that the responsible should not pay for the losses of the gamblers.

A sudden crypto collapse would definitely affect the stock market in a big way, and government fire lines might be set up very far behind one's own positions or after massive losses had already occurred.

[boarder42]

The thing that bothers me about crypto is all the justification people are using to make it a stupid high % of their asset allocation. There are plenty of small cap stocks and even some large cap stocks that have great 5 and 10 year returns. If you asked if I thought there was a problem adding a low % allocation to TSLA on the forum, people would ask what a small % allocation is exactly and advise you to keep your fun money to under 5-10%. People here are trying to justify their 50% crypto positions as safe because it's "currency" and a "store of value" and everyone is "adopting it" etc. All of the same arguments could be made for holding a stupid high % of Tesla. 

If you want to hold a high % of crypto then fine, but don't expect a different response than the person who starts a thread defending a 50% allocation to a single stock.

What bothers me is crypto now has a market cap over 1T (i've seen 3T thrown around here as well). We saw what happened to the overall economy when $2-3T of housing value was destroyed in 2008. What happens to the overall economy when/if there is a major hack or government crackdown on crypto and 1-3T of value is destroyed?

this is another argument as to why it won't fail which i do not understand.  It's too big to fail doesn't make sense to me.

That's because crypto itself cannot be too big to fail - it is not an institution that our governments rely heavily on. The big banks might get too intertwined with crypto, and they might be deemed too big to fail. How that plays out for some average schmuck who is just holding crypto likely won't be nearly as good as it works out for the huge banks.

"Too big to fail" was a phrase applied to banks which had to be bailed out by the US government, using established mechanisms such as the FDIC and overnight lending markets. In the event of a crypto-burst, there will be no government bailout because there are no legal mechanisms or existing bureaucracies to make crypto holders whole. Additionally, there would be too much political heat to invent such mechanisms on the fly. It would be more like 2000 than 2008.

Agreed that there won't be a bailout for people who own crypto.  But there wasn't a bailout for the people who took out loans on houses that they couldn't afford either.  That's a big part of why 2008 was a serious problem.  Reckless investors and banks who didn't give a shit about buying/trading garbage for lots of money seems pretty similar though.  Getting rich on crypto has a disturbingly similar feel to buying houses subprime mortgages.

How many times did you hear "But housing only goes up!"?

It's a good point that the people who were actually foreclosed, held mortgage assets or derivatives, or who bought Lehman / AIG stock were not made whole, or really helped in any way. Bailouts benefitted areas adjacent to the central crater, such as propping up the value of homes which had not yet been foreclosed, propping up banks which had not yet failed, and propping up the markets for stocks and bonds that had not already gone bankrupt. This was where the political will was located, not in the already bankrupt and powerless. Plus, there was a moralistic narrative that the responsible should not pay for the losses of the gamblers.

A sudden crypto collapse would definitely affect the stock market in a big way, and government fire lines might be set up very far behind one's own positions or after massive losses had already occurred.

but didnt we see a huge pivot in the crash surrounding covid to not bail out big business and instead bailout the individual and in turn let them spend money to bailout big business.  Obviously this wouldn't be targetted to crypto holders but could help keep them on their feet when it crashes.  Just like the stimulus packages werent 100% targetted at job loss and trickled pretty far up the food chain of AGI.  Maybe i'm overly hopeful the politicians learned alot from that crash and the speed of recovery thru putting money in at the middle/bottom and letting the top work itself out.

But just like the other thread i personally believe the next bubble collapse will be caused by crypto.  There is nothing there to support it if it crashes hard and causes people to start to pull their margin.  at least when markets collapse the companies there typically have some underlying value and assets to lean on and its easy to be quite diversified in the space with index funds.

[index]

The thing that bothers me about crypto is all the justification people are using to make it a stupid high % of their asset allocation. There are plenty of small cap stocks and even some large cap stocks that have great 5 and 10 year returns. If you asked if I thought there was a problem adding a low % allocation to TSLA on the forum, people would ask what a small % allocation is exactly and advise you to keep your fun money to under 5-10%. People here are trying to justify their 50% crypto positions as safe because it's "currency" and a "store of value" and everyone is "adopting it" etc. All of the same arguments could be made for holding a stupid high % of Tesla. 

If you want to hold a high % of crypto then fine, but don't expect a different response than the person who starts a thread defending a 50% allocation to a single stock.

What bothers me is crypto now has a market cap over 1T (i've seen 3T thrown around here as well). We saw what happened to the overall economy when $2-3T of housing value was destroyed in 2008. What happens to the overall economy when/if there is a major hack or government crackdown on crypto and 1-3T of value is destroyed?

this is another argument as to why it won't fail which i do not understand.  It's too big to fail doesn't make sense to me.

That's because crypto itself cannot be too big to fail - it is not an institution that our governments rely heavily on. The big banks might get too intertwined with crypto, and they might be deemed too big to fail. How that plays out for some average schmuck who is just holding crypto likely won't be nearly as good as it works out for the huge banks.

"Too big to fail" was a phrase applied to banks which had to be bailed out by the US government, using established mechanisms such as the FDIC and overnight lending markets. In the event of a crypto-burst, there will be no government bailout because there are no legal mechanisms or existing bureaucracies to make crypto holders whole. Additionally, there would be too much political heat to invent such mechanisms on the fly. It would be more like 2000 than 2008.

Agreed that there won't be a bailout for people who own crypto.  But there wasn't a bailout for the people who took out loans on houses that they couldn't afford either.  That's a big part of why 2008 was a serious problem.  Reckless investors and banks who didn't give a shit about buying/trading garbage for lots of money seems pretty similar though.  Getting rich on crypto has a disturbingly similar feel to buying houses subprime mortgages.

How many times did you hear "But housing only goes up!"?

There won't be a bail out for crypto, but that doesn't mean the bubble bursting won't affect investors who have nothing to do with crypto. Berkshire was down 35% after the tech bubble burst despite Buffet actively steering clear of anything related to tech.

At best, crypto should be considered in the "alternatives" portion of portfolio allocation and the general advice is 10 to no more than 20% should be allocated to alternatives. The OP asked about a low% crypto allocation and turned out to be 20% allocated to crypto! The posters here seem to be viewing crypto as a currency akin to the USD or EUR and seem to use the terms currency, coin, crypto bank, store of value to justify a high asset allocation. This is the "investment advice" forum. Several of the posters here are not anti-crypto, but my advice at least is watch your asset allocation.

Maybe BTC is the next big thing, maybe Tesla replaces all cars, or Netflix all cable and satellite, but that doesn't mean I would invest 20%, 30%, 50% in Tesla or Netflix.

You can make all the same crypto arguments for Tesla and electric vehicles. Blockchain and EVs are the way of the future; therefore, I buy 50% TSLA. I'm not going to argue blockchain and EVs are going to have a huge impact on our lives in the future, but I would argue investing 20% in Tesla is a really bad idea. Blockchain will be used in the future, but that doesn't mean any of the current coins are a good investment so size accordingly.     

[Juan Ponce de León]

I like the pretty patterns

[LateStarter]

I noticed the anti-crypto folks here constantly claim the pro-crypto folks say XYZ but in reality it's the opposite.  The post always start with something like, "I keep reading the pro-crypto folks say XYZ but..."  Why I this so common on one side and why don't they rebut the actual arguments raised?

please go re read the entire thread there are many comments that have been made by pro crypto folks about the size of crypto and how that means it will stick around.

i'm not going to go pull all the direct quotes from everyone every time someone questions when they said something b/c honestly i dont care.  crypto will not make me rich b/c i dont own any but its highly likely to make alot of people poor who are over tilted either here or in the world.

Zero pro-crypto posters have made any claims about "too big to fail" in this topic. The only prior mention was from, you guessed it, boarder42.

Several pro-crypto posters have emphasised how big the crypto market is, but only to counter ravings about it all being worthless and just like beanie babies, etc. That's not the same thing.

[boarder42]

I noticed the anti-crypto folks here constantly claim the pro-crypto folks say XYZ but in reality it's the opposite.  The post always start with something like, "I keep reading the pro-crypto folks say XYZ but..."  Why I this so common on one side and why don't they rebut the actual arguments raised?

please go re read the entire thread there are many comments that have been made by pro crypto folks about the size of crypto and how that means it will stick around.

i'm not going to go pull all the direct quotes from everyone every time someone questions when they said something b/c honestly i dont care.  crypto will not make me rich b/c i dont own any but its highly likely to make alot of people poor who are over tilted either here or in the world.

Zero pro-crypto posters have made any claims about "too big to fail" in this topic. The only prior mention was from, you guessed it, boarder42.

Several pro-crypto posters have emphasised how big the crypto market is, but only to counter ravings about it all being worthless and just like beanie babies, etc. That's not the same thing.

Sweet so we can all agree then that the size of the crypto market has absolutely no value as to whether it will succeed long term. So we can stop referring to the market cap of crypto as indication of it's success or lack there of.

[LateStarter]

I noticed the anti-crypto folks here constantly claim the pro-crypto folks say XYZ but in reality it's the opposite.  The post always start with something like, "I keep reading the pro-crypto folks say XYZ but..."  Why I this so common on one side and why don't they rebut the actual arguments raised?

please go re read the entire thread there are many comments that have been made by pro crypto folks about the size of crypto and how that means it will stick around.

i'm not going to go pull all the direct quotes from everyone every time someone questions when they said something b/c honestly i dont care.  crypto will not make me rich b/c i dont own any but its highly likely to make alot of people poor who are over tilted either here or in the world.

Zero pro-crypto posters have made any claims about "too big to fail" in this topic. The only prior mention was from, you guessed it, boarder42.

Several pro-crypto posters have emphasised how big the crypto market is, but only to counter ravings about it all being worthless and just like beanie babies, etc. That's not the same thing.

Sweet so we can all agree then that the size of the crypto market has absolutely no value as to whether it will succeed long term. So we can stop referring to the market cap of crypto as indication of it's success or lack there of.

FFS - yet another straw-man response in a discussion about persistent straw-manning ! The irony would be hilarious if it wasn't such a tedious waste of time.

[boarder42]

I noticed the anti-crypto folks here constantly claim the pro-crypto folks say XYZ but in reality it's the opposite.  The post always start with something like, "I keep reading the pro-crypto folks say XYZ but..."  Why I this so common on one side and why don't they rebut the actual arguments raised?

please go re read the entire thread there are many comments that have been made by pro crypto folks about the size of crypto and how that means it will stick around.

i'm not going to go pull all the direct quotes from everyone every time someone questions when they said something b/c honestly i dont care.  crypto will not make me rich b/c i dont own any but its highly likely to make alot of people poor who are over tilted either here or in the world.

Zero pro-crypto posters have made any claims about "too big to fail" in this topic. The only prior mention was from, you guessed it, boarder42.

Several pro-crypto posters have emphasised how big the crypto market is, but only to counter ravings about it all being worthless and just like beanie babies, etc. That's not the same thing.

Sweet so we can all agree then that the size of the crypto market has absolutely no value as to whether it will succeed long term. So we can stop referring to the market cap of crypto as indication of it's success or lack there of.

FFS - yet another straw-man response in a discussion about persistent straw-manning ! The irony would be hilarious if it wasn't such a tedious waste of time.

Kinda like joining a fire forum to talk about crypto?

[aceyou]

I noticed the anti-crypto folks here constantly claim the pro-crypto folks say XYZ but in reality it's the opposite.  The post always start with something like, "I keep reading the pro-crypto folks say XYZ but..."  Why I this so common on one side and why don't they rebut the actual arguments raised?

please go re read the entire thread there are many comments that have been made by pro crypto folks about the size of crypto and how that means it will stick around.

i'm not going to go pull all the direct quotes from everyone every time someone questions when they said something b/c honestly i dont care.  crypto will not make me rich b/c i dont own any but its highly likely to make alot of people poor who are over tilted either here or in the world.

Zero pro-crypto posters have made any claims about "too big to fail" in this topic. The only prior mention was from, you guessed it, boarder42.

Several pro-crypto posters have emphasised how big the crypto market is, but only to counter ravings about it all being worthless and just like beanie babies, etc. That's not the same thing.

Sweet so we can all agree then that the size of the crypto market has absolutely no value as to whether it will succeed long term. So we can stop referring to the market cap of crypto as indication of it's success or lack there of.

I can't think of a sector where the market cap size WOULDN'T be an indication of the current state of the sector.  If the market cap for automotives worldwide was 500 Billion, and the next year was 450B, then 400B, then 350B, I think that would be an indicator.  I think every CEO for every automotive company would be crapping their pants, and it would be talked about (for good reason) by every pundit on TV.

Is it possible that I'm missing something important in this conversation that happened earlier?  But it seems like crypto's quickly growing market cap is a REALLY good indication that it is having some success.  Whereas if coders were pouring tons of hours into projects, and no one was putting any money behind them year after year, that'd be a real indication of a problem to me.

[GuitarStv]

What was the market cap for subprime mortgages in 2007 again?

[effigy98]

What was the market cap for subprime mortgages in 2007 again?

Probably looks something like the CAPE.

[LateStarter]

I noticed the anti-crypto folks here constantly claim the pro-crypto folks say XYZ but in reality it's the opposite.  The post always start with something like, "I keep reading the pro-crypto folks say XYZ but..."  Why I this so common on one side and why don't they rebut the actual arguments raised?

please go re read the entire thread there are many comments that have been made by pro crypto folks about the size of crypto and how that means it will stick around.

i'm not going to go pull all the direct quotes from everyone every time someone questions when they said something b/c honestly i dont care.  crypto will not make me rich b/c i dont own any but its highly likely to make alot of people poor who are over tilted either here or in the world.

Zero pro-crypto posters have made any claims about "too big to fail" in this topic. The only prior mention was from, you guessed it, boarder42.

Several pro-crypto posters have emphasised how big the crypto market is, but only to counter ravings about it all being worthless and just like beanie babies, etc. That's not the same thing.

Sweet so we can all agree then that the size of the crypto market has absolutely no value as to whether it will succeed long term. So we can stop referring to the market cap of crypto as indication of it's success or lack there of.

FFS - yet another straw-man response in a discussion about persistent straw-manning ! The irony would be hilarious if it wasn't such a tedious waste of time.

Kinda like joining a fire forum to talk about crypto?

Who joined a FIRE forum to talk about crypto ? Not me. I joined long ago to learn about FIRE.

I understand that crypto is not mainstream MMM and I would expect the majority here to be against putting money into crypto. I don't understand why that should mean that crypto can't be discussed in a rational / logical manner. Maybe it can't but it's quite puzzling . . .

[Radagast]

Let me start  by saying I don't see anything wrong with a 5-10% crypto allocation. Even if you start just now, and the entire crypto market goes on to lose >99% sometime in the next 20 years, it could still be useful depending on the timing, circumstances, and how you structure your rebalance bands. Now to my main point.

I like the pretty patterns

Exciting isn't it? It only has to go up like another factor of 15X before it exceeds the value of all dollar debt, and another 100X before it exceeds the value of outstanding debt in all currencies. I should buy popcorn now before it is all sold out! This is history in the making.

Congress, please don't do anything about this.

[talltexan]

If an asset were to experience a drawdown of 99%, that would be a deal-breaker for me. I tolerate the stock market despite its 50%-ish drawdowns that happened three times in my lifetime because I think I have the discipline to hold stocks through those drawdowns.

If--starting from equal weights--stocks drop 50%, and crypto drops 80%--suddenly it's a portfolio that's 84% stocks, and I couldn't imagine rebalancing to 50-50 at that point, I'd probably wonder what I was doing with so much crypto to start with.

Also, I've started posting my crypto trades over in a journal, check them out!