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>Not a billionaire, but also trying to keep some percentage of my net worth in cryptocurrencies. Worked great so far. 10% seems to be about right. I don't see

by pedrocr 10y ago

>Not a billionaire, but also trying to keep some percentage of my net worth in cryptocurrencies. Worked great so far. 10% seems to be about right. I don't see how people can look at cryptocurrencies as investments over the long term. It's like saying you have all your money in Swiss Francs in a checking account that returns no interest because you think the Swiss are doing a stellar job at setting up an economy/banking system. In the short term you're basically betting on cryptocurrencies gaining adoption and thus more of the economy needing them. In the long term it's just a currency not an investment. >(I have much more trust in blockchain than in government retirement schemes). That's not the alternative, some kind of diversified portfolio of stocks (a simple index fund is usually the easiest) is the right benchmark. Personally I will always feel safer with owning a (very small) percentage of the total productive companies in the world than a currency that's only worth something as long as someone is willing to keep trading in that specific one and not change to some other one. I look at the value of my stock holdings in euros only because it's also my day to day currency but the underlying value can be repriced in any currency over the next 50 years (my investment horizon). What I would really like to do is price my stock holdings as percentage of total world stock market capitalization (with plenty of decimal points). Anyone have a good source for that number?

pc86 10y ago
But a diversified stock portfolio wouldn't allow me to write smug Medium articles when speculation drives the price up and remain conspicuously silent when the price craters shortly thereafter.
- aminorex 10y ago
  You are doing it wrong. Sell the rips and buy the dips.
snovv_crash 10y ago
Diversification only on the stock market isn't a good idea. It doesn't protect against the insurers going bust, for instance. In this case, keeping some % of net worth in a cryptocurrency makes sense, just like keeping a few gold bars/coins or an emergency stack of bills makes sense for that day when the internet is broken.
- bigtimeidiot 10y ago
  >It doesn't protect against the insurers going bust Can you clarify? I mean, I agree that your diversification should extend beyond the stock market (bonds, some metals, real estate). But I'm not sure what you mean by the above.
Hermel 10y ago
Bitcoin should be seen as digital gold. It has no value in itself, but its likely that you will be able to use it for payment even if all else fails.
- deleted 10y ago
  [deleted]
- bigtimeidiot 10y ago
  >but its likely that you will be able to use it for payment even if all else fails. Can you give an example of a modern economy collapsing and reverting to gold as a medium of exchange?
  - DougN7 10y ago
    I can't give any such example. However, EVERY economic collapse has been followed by rebuilding. Maybe the nation has a new name or new boundaries, but something is always rebuilt. And once it is, gold has value again.
  - MichaelBurge 10y ago
    I hear Bitcoin is popular in Venezuela, where the people hunt pigeons for food after the communists took over. It's also popular in China, where - again - people are scared of their government. I don't know that the US federal government is as scary, but it's not unheard of.
    - atemerev 10y ago
      Especially when your and their opinions on taxable assets differ.
      - MichaelBurge 10y ago
        Oppressive governments are essentially the only good reason to use bitcoin, since the usual financial system is far more efficient at storing and transmitting money. He's either evading taxes or speculating.
bigtimeidiot 10y ago
>Anyone have a good source for that number? You can get close with a few ETFs: US market and bonds, Ex-US global market and bonds: http://www.pragcap.com/a-simple-four-fund-global-financial-asset-portfolio/ http://www.pragcap.com/a-simple-four-fund-global-financial-a...
- pedrocr 10y ago
  Those are ways to invest in that total number. I already do that. I mean an information source for the total valuation of the world's stock markets on a monthly basis at least.
myth_drannon 10y ago
Because it's not an investment but a safety net like gold and silver. Crypto-currencies fans are the younger version of goldbugs.
- bigtimeidiot 10y ago
  >because it's not an investment but a safety net like gold and silver Only if you're a resident of an unstable country. Can you name a crisis where having a stash of gold and silver mattered? Do you think people are going to trade valuable goods (food? water? ammo?) for your metal bars? I can't imagine the circumstances. When SHTF the government (or someone else) will confiscate that wealth. They have in the past. Personally, I think metals will matter less in any apocalypse, because they have no practical use.
  - atemerev 10y ago
    As a Russian, I have survived the USSR economic collapse. Having a stash of gold would be handy (dangerous, as it would have put a mark on your back, but still preferable to holding any amount of Soviet money, which became worthless in mere months.) Gold was traded for great value in the harshest of times there.
  - metaphorm 10y ago
    I think the most valuable thing you can possibly own in a full blown collapse situation is a well stocked seed bank.
    - atemerev 10y ago
      You don't need anything except potatoes and fast-growing greens to survive. Grain and rice are too labor-intensive and generally require a functioning economy. (And if you don't have guns and ammo, you'll be immediately robbed by those who do)
  - myth_drannon 10y ago
    Cypress is a stable and prosperous country, but they had banks crisis and their bank savings were confiscated to prop up the banks.
atemerev 10y ago
I am betting on Bitcoin market cap (roughly, adoption rate, for any reason) to grow faster than the total number of Bitcoins in circulation (which is growing logarithmically and capped by 21 million)
jesusthatsgreat 10y ago
> I look at the value of my stock holdings in euros only because it's also my day to day currency Until it isn't and it's replaced by a new one. Less than 20 years ago Euros didn't exist. It's entirely possible that in 20 years time they won't exist either... You've played your hand by saying you look at your stock holdings in fiat. What happens if fiat fails you? i.e. if hyperinflation kicks in or the powers that be decide to restrict access to your fiat? I realise it sounds tinfoil hat-esque but if investing to safeguard your future, these are possible doomsday scenarios... (just ask people of Venezuela) > In the short term you're basically betting on cryptocurrencies gaining adoption and thus more of the economy needing them. In the long term it's just a currency not an investment. A deflationary currency with a fixed supply... so it's an investment in the sense that (a) it's scarcity will naturally drive up the price if demand increases (b) it will hold value better than fiat, given that the supply of fiat is, well, unlimited.
- pedrocr 10y ago
  >You've played your hand by saying you look at your stock holdings in fiat. Are we having a discussion or playing poker? What hand did I play? > What happens if fiat fails you? i.e. if hyperinflation kicks in or the powers that be decide to restrict access to your fiat? I realise it sounds tinfoil hat-esque but if investing to safeguard your future, these are possible doomsday scenarios... (just ask people of Venezuela) I'll just sell my stocks for another fiat currency or even bitcoin if/when I want to. You're missing the point completely. My stock holdings are shares of companies not fiat currency. I can look at them in whatever currency I want. I can also see the value of my holdings in dollars or yen or bitcoin and it's just as valid. I'm not storing value in euros, only using them as the unit when doing valuation of my holding of companies. The same applies to cryptocurrencies, they're not valuable in themselves, only as a means of exchange.

by pedrocr 10y ago

pc86 10y ago

But a diversified stock portfolio wouldn't allow me to write smug Medium articles when speculation drives the price up and remain conspicuously silent when the price craters shortly thereafter.

aminorex 10y ago
You are doing it wrong. Sell the rips and buy the dips.

snovv_crash 10y ago

Diversification only on the stock market isn't a good idea. It doesn't protect against the insurers going bust, for instance. In this case, keeping some % of net worth in a cryptocurrency makes sense, just like keeping a few gold bars/coins or an emergency stack of bills makes sense for that day when the internet is broken.

bigtimeidiot 10y ago
>It doesn't protect against the insurers going bust Can you clarify? I mean, I agree that your diversification should extend beyond the stock market (bonds, some metals, real estate). But I'm not sure what you mean by the above.

Hermel 10y ago

Bitcoin should be seen as digital gold. It has no value in itself, but its likely that you will be able to use it for payment even if all else fails.

deleted 10y ago
[deleted]
bigtimeidiot 10y ago
>but its likely that you will be able to use it for payment even if all else fails. Can you give an example of a modern economy collapsing and reverting to gold as a medium of exchange?
- DougN7 10y ago
  I can't give any such example. However, EVERY economic collapse has been followed by rebuilding. Maybe the nation has a new name or new boundaries, but something is always rebuilt. And once it is, gold has value again.
- MichaelBurge 10y ago
  I hear Bitcoin is popular in Venezuela, where the people hunt pigeons for food after the communists took over. It's also popular in China, where - again - people are scared of their government. I don't know that the US federal government is as scary, but it's not unheard of.
  - atemerev 10y ago
    Especially when your and their opinions on taxable assets differ.
    - MichaelBurge 10y ago
      Oppressive governments are essentially the only good reason to use bitcoin, since the usual financial system is far more efficient at storing and transmitting money. He's either evading taxes or speculating.

bigtimeidiot 10y ago

>Anyone have a good source for that number? You can get close with a few ETFs: US market and bonds, Ex-US global market and bonds: http://www.pragcap.com/a-simple-four-fund-global-financial-asset-portfolio/ http://www.pragcap.com/a-simple-four-fund-global-financial-a...

pedrocr 10y ago
Those are ways to invest in that total number. I already do that. I mean an information source for the total valuation of the world's stock markets on a monthly basis at least.

myth_drannon 10y ago

Because it's not an investment but a safety net like gold and silver. Crypto-currencies fans are the younger version of goldbugs.

bigtimeidiot 10y ago
>because it's not an investment but a safety net like gold and silver Only if you're a resident of an unstable country. Can you name a crisis where having a stash of gold and silver mattered? Do you think people are going to trade valuable goods (food? water? ammo?) for your metal bars? I can't imagine the circumstances. When SHTF the government (or someone else) will confiscate that wealth. They have in the past. Personally, I think metals will matter less in any apocalypse, because they have no practical use.
- atemerev 10y ago
  As a Russian, I have survived the USSR economic collapse. Having a stash of gold would be handy (dangerous, as it would have put a mark on your back, but still preferable to holding any amount of Soviet money, which became worthless in mere months.) Gold was traded for great value in the harshest of times there.
- metaphorm 10y ago
  I think the most valuable thing you can possibly own in a full blown collapse situation is a well stocked seed bank.
  - atemerev 10y ago
    You don't need anything except potatoes and fast-growing greens to survive. Grain and rice are too labor-intensive and generally require a functioning economy. (And if you don't have guns and ammo, you'll be immediately robbed by those who do)
- myth_drannon 10y ago
  Cypress is a stable and prosperous country, but they had banks crisis and their bank savings were confiscated to prop up the banks.

atemerev 10y ago

I am betting on Bitcoin market cap (roughly, adoption rate, for any reason) to grow faster than the total number of Bitcoins in circulation (which is growing logarithmically and capped by 21 million)

jesusthatsgreat 10y ago

> I look at the value of my stock holdings in euros only because it's also my day to day currency Until it isn't and it's replaced by a new one. Less than 20 years ago Euros didn't exist. It's entirely possible that in 20 years time they won't exist either... You've played your hand by saying you look at your stock holdings in fiat. What happens if fiat fails you? i.e. if hyperinflation kicks in or the powers that be decide to restrict access to your fiat? I realise it sounds tinfoil hat-esque but if investing to safeguard your future, these are possible doomsday scenarios... (just ask people of Venezuela) > In the short term you're basically betting on cryptocurrencies gaining adoption and thus more of the economy needing them. In the long term it's just a currency not an investment. A deflationary currency with a fixed supply... so it's an investment in the sense that (a) it's scarcity will naturally drive up the price if demand increases (b) it will hold value better than fiat, given that the supply of fiat is, well, unlimited.

pedrocr 10y ago
>You've played your hand by saying you look at your stock holdings in fiat. Are we having a discussion or playing poker? What hand did I play? > What happens if fiat fails you? i.e. if hyperinflation kicks in or the powers that be decide to restrict access to your fiat? I realise it sounds tinfoil hat-esque but if investing to safeguard your future, these are possible doomsday scenarios... (just ask people of Venezuela) I'll just sell my stocks for another fiat currency or even bitcoin if/when I want to. You're missing the point completely. My stock holdings are shares of companies not fiat currency. I can look at them in whatever currency I want. I can also see the value of my holdings in dollars or yen or bitcoin and it's just as valid. I'm not storing value in euros, only using them as the unit when doing valuation of my holding of companies. The same applies to cryptocurrencies, they're not valuable in themselves, only as a means of exchange.