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I hold a small percentage of my net worth in cryptocurrency so I'll answer it from the non-speculative side. >>why do you think that Bitcoin is undervalued Th

I hold a small percentage of my net worth in cryptocurrency so I'll answer it from the non-speculative side. >>why do you think that Bitcoin is undervalued There's no way to know this. Or really, know that about any asset. >>why should it produce solid future returns No evidence it will. >>why do you think it is a good investment for someone with (comparatively) little investable cash? Ah, that's a different argument. The total market cap of cryptocurrency is $726 billion with a 24h vol (as of 9:08 AM PT 1/10/2018) of $52 billion, with 33.8% dominance by BTC. Let's just go with the top two currencies, BTC and ETH, with $245b and $129b in market cap, respectively. Can you find assets with similar volumes and market caps that are legal and easy to invest in that you would ignore in a balanced index fund approach to retirement? Probably not. Neither would a responsible financial adviser. Yet because it's BITCOIN, we're supposed to think it's stupid, dumb, valueless, etc (not saying you feel this way, just saying that's the stuff I hear) without just looking at the market signal that's being sent: A hell of a lot of money. IMO, the real speculators are the ones blithely ignoring the three-quarters of a trillion US dollars being traded on cryptocurrencies and thinking it's a bunch of crap. They might be right. But that runs counter to sound investment strategy, which is to own the market and to cover all potential areas of growth, because as history shows, a vanishingly small number of equities/assets is responsible for a huge part of the return on investment of capital.

charlesdm 9y ago
Even for a conservative investor, a 1% portfolio investment could produce 30 to 50% of your total gains for the entire year. I don't see how you can not at least own some cryptocurrencies. Since it's entirely global, the space could very well grow to $5-10tn before crashing down to $1-3tn. We're at $730bn now. The dot-com bubble, which was US focused, went up to $6.7tn before coming back down to $1.7tn.
- icelancer 9y ago
  For me, 5% of my future retirement contributions are in cryptocurrency. Rebalancing is obviously tricky since it's so volatile but that's the general target I hit, and the remainder of my portfolio has shifted to be more bond-heavy as a result of the additional risk. This suits my current lot in life but may not be for everyone.

charlesdm 9y ago

Even for a conservative investor, a 1% portfolio investment could produce 30 to 50% of your total gains for the entire year. I don't see how you can not at least own some cryptocurrencies. Since it's entirely global, the space could very well grow to $5-10tn before crashing down to $1-3tn. We're at $730bn now. The dot-com bubble, which was US focused, went up to $6.7tn before coming back down to $1.7tn.

icelancer 9y ago
For me, 5% of my future retirement contributions are in cryptocurrency. Rebalancing is obviously tricky since it's so volatile but that's the general target I hit, and the remainder of my portfolio has shifted to be more bond-heavy as a result of the additional risk. This suits my current lot in life but may not be for everyone.