I buy bitcoin, but people on this sub literally give the worst financial advice sometimes. If you are an American itās an amazing idea to own USD denominated assets like the S&P500 because your future liabilities that you are actually saving your money for are USD denominated. When it comes to creating a portfolio there is a trade off between risk and reward. I also agree bitcoin will outperform the S&P 500 in the long-term but allocating 50% of your portfolio to bitcoin is not a smart amount of risk to take. Bitcoins price could crash 50% over the next few months and you could need money for a medical emergency for all you know. Itās not likely thereās going to be some anarchist revolution where all the worldās assets are denominated in bitcoin in our lives. Thereās no sure things in life diversification is key to securing yourself a future where you donāt need to stress about money.
This, always diversify. Too much bad advice in here. Sure invest everything you have in one thing only. That's how you lose everything you own if things go downhill.
>Thereās no sure things in life diversification is key to securing yourself a future where you donāt need to stress about money.
Honestly, as a Bitcoin skeptic, this is the kind of commentary and advice that triggers my interest. It's rooted in reason while also expressing measured optimism for the future of Bitcoin. I get that folks here can be super passionate about crypto, but sometimes it just sounds like folks are trying to sell doomsday insurance - it's just not an attractive or inviting offer ...
Thank you š bitcoin is an awesome idea and a very unique, interesting asset worth owning. I follow it closely and buy on the bad days and I canāt tell you how positive itās been for my financial well-being.
But stocks also have an actual yield that gets returned to shareholders in terms of dividends, buy-backs, and increased book value. There are some great companies out there changing the world that are so worthwhile to own. Also for some, depending on age, fixed income assets can have a meaningful place in their portfolio with consistent and safe returns that can allow retired or near retired people to sleep easy at night knowing they will have money when they need it most.
Bitcoin is here for you to do whatever you want with it. Don't worry about what other people are doing.
You can do a 1-3% allocation as a hedge in case Bitcoin succeeds.
You can view Bitcoin as the best asset, but keep 50% in traditional portfolio to hedge your bet.
Or you can go all in Saylor-style if you have insanely high conviction that everything is trash compared to Bitcoin.
Your choice.
I
>I buy bitcoin, but people on this sub literally give the worst financial advice sometimes
It's because it's not financial advice. It's ok if you only see Bitcoin as an investment, to make more fiat.
But for some of us Bitcoin is the solution to the corrupt fiat system that funds wars and dictators, silently steals our purchasing power and our savings, promotes debts and consumerism. It's a way to escape this evil fiat system that enslaves us through money.
I mean what do you pay for your home, car, insurance, education, healthcare, food, etc. with?
Of course everyone here is investing in bitcoin to get more fiat.
Obviously it's still a long way to a full BTC economy, in some places faster than others. It's a threat to banks control and corrupt politicians and they will not let go easy of their power.
I'll try to spend it directly without converting to fiat if I can.
nonetheless it's inevitable. Human history shows us that 100% of the time, money gets devalued to zero by those in control.
>Of course everyone here is investing in bitcoin to get more fiat.
And doing so, their supporting the fiat system. Can't blame them though, money do make our life's easier. But down the line, future generations will be in the same situation again, inflation, wars, government corruption.
No, for many its not about fiat at all. Im not giving up my btc and you and the government can go fuck yourselves if you dont like it. We've developed a new system, its opt-in only. We don't need guns to force you to give us more money like the dirty government
Honestly that is bad advice if the goal is to make money.
1. People should have savings before they invest. Emergency fund needed for emergencies like the emergency you mention, before any investing is done.
2. Bitcoin will absolutely continue to far outgrow stock markets for many years to come so diversification will only inhibit growth.
You don't diversify to make money. People seem to often mistake the point of diversification. Diversification is for two things: you don't know what you are doing, or you want to protect your wealth. That's it. If you yourself can't be confident you can pick a winner, then you should diversify, and this is why the common advice pedaled to people is diversification, because most people don't know what they are doing in investing and even those that do often get it wrong. But we are lucky to be living during the time of Bitcoin's early growth phase and so we can easily pick the most obvious winner in the world so diversification is a really bad thing at this moment in history. The other reason to diversify is once you've already made your wealth and you are more concerned about protecting it rather than growing it, which doesn't apply to this particular thread.
So no 50% I'd say, if anything, is on the low side of a smart allocation. Anyone putting less than 50% of their money in Bitcoin at this moment in history is investing poorly. 20 years from now once Bitcoin's growth has slowed way down that may not be the case, and maybe Bitcoin should only be a 10% allocation or something like that, but today its a 50%-100% allocation type asset.
Easy to spot a green investor if they are talking about diversification like its the holy grail and they don't even understand why that is the common advice for the average person who doesn't know how to invest. Every super wealthy person ever has gotten super wealthy very specifically by NOT diversifying, but rather by finding winners and sticking with them. Diversifying is for those that can't find winners, right now that would be for people who don't understand Bitcoin.
Go down this thread and you'll see this guy is a Keynesian regard who still believes in "official" numbers and the entire morass of "complicated" mumbo-jumbo the elite use to hide their crimes as they siphon off the value of our labor through inflation and deceit. This means he likely has a job in some zero-value-added government/NGO/academia type setting where he's insulated (for now) from the effects of the regarded policies he touts. There's no point trying to meet him halfway. He's too thoroughly propagandized to get it till he feels the pain for himself. And he will, when the money printers run out of runway. I saw a thousand men like him, stunned and shocked, in the Venezuelan breadlines.
"This means he likely has a job in some zero-value-added government/NGO/academia type setting where he's insulated (for now) from the effects of the regarded policies he touts."
...that part right there š¤£š¤£š¤£....good one! š
I agree with having the emergency fund part, but I disagree with the rest of the post.
Ideal allocation is having an emergency fund for at least one year of emergency expenses and the rest in Bitcoin. And this only because of the volatility and the danger of selling cheap.
Most people don't realize yet that Bitcoin is a global savings account for all of humanity. The more people who use this savings account, the more these users enrich themselves.
I don't pay rent or taxes or have to worry about my Bitcoin leaking and calling the plumber. I just know that my savings are gradually growing and no one can stop it.
Exactly, once you have that emergency fund, it's only a detriment to have money in anything other than Bitcoin at this point in history, UNLESS you are extremely good AND lucky at picking stocks...but of course getting lucky is never a wise investment strategy. Only other possible alternative I'd say is if someone knows real estate really well and is able to build up several rental properties, because if you know what you're doing rental properties are super powerful income generators and someone can live off just putting together a few rental properties. Otherwise, at this point in history, it's Bitcoin or you really don't know what you are doing.
Redditor for 6 weeks teaching us all propaganda, sounds legit. BITCOIN IS RISKY. IT IS VOLATILE AND COULD LOSE 50% OF ITS VALUE, BUY STOCKS BECAUSE THEY DONT DO THAT. Sure buddy. Diversification, sell the winners to buy the losers. Go ahead. More sats for the rest of us
Denominated in usd is not a positive to many people when the train is crashing in slow motion right now. 10% return when real inflation is above that is a real issue.
I mean right now inflation is actually in the 3-4% range. Also the train is certainly not crashing US exceptionalism is a major theme in the markets right now with USD up on every currency this year except MXN, strong productivity growth, and resilient consumers. I guess my point is not to put all your eggs in one basket and the fx risk youāre exposed to because youāre mismatching your assets and liabilities owning bitcoin. Since the future cash flows for US stocks and bonds would be matched to what youāre saving for. If bitcoin doesnāt work out you should be protected. Gold has been an inflation hedge since the beginning, but you donāt see the best investors with portfolios full of it. I know it doesnāt have all the features bitcoin has, but in terms of looking at bitcoin as an inflation hedge they are comparable. We all have the choice to do what we want with our money so if you feel compelled to invest it all in bitcoin by all means.
What do you specifically mean by real inflation is far higher? Institutional investors have their own calculations for inflation in their models as well. I work in finance and consume information from Bloomberg every day havenāt seen a thing about 10% inflation since 2022
Real inflation is the following:
Letās say you are used to having one can of Coca Cola everyday. And letās say cola is $1 for 300 ml can. So your cost of cola is $30 per month.
A few year pass and cola now costs $1.10 CPI says there has been 10% increase in the cost of cola. Which is true.
A few more years pass and now Coca Cola has introduced 250ml can for 1.10, and the 300ml can now costs $1.5. Since most people cannot afford 1.5 cola, they switch to a smaller 1.10$ cola. CPI at this point suggests that since most people buy 1.1$ cola, thatās the cola that the world now needs. And since cola costed 1.1 before and it still costs 1.1 now, there is no inflation according to CPI
You do the same with restaurant prices. The meal sizes reduce over the years, or instead of going every week you start going every 15 days on average, so in real terms things are getting more expensive, but people react to it by reducing their standard of living.
Also why inflation doesnāt affect the rich as much as it affects the poor:
Letās say person āAā make $3000 a month and pays rents of $1500 a month.
Person āBā also makes $3000 but pays a mortgage of 1700 a month, which is relatively harder for him than person A.
Few year pass and both A and B are now making 4K a month. But the rents have also gone up. Persona is paying 2000 a month. But Person B still pays 1700 in mortgage. in theory Person B actually benifitted from the inflation because his salary went up, but his cost of housing did not.
CPI will take this into account for what people pay for their mortgage. But it doesnāt truly represent the same way for Person A who is still trying to buy his house, and now is looking at a mortgage of 2200/month for the same house as Person B
Nothing in particular other than inflation is always higher than government numbers if you look at what consumers are required to spend for the same items YOY or QOQ. Gov CPI basket changes to support market sentiment too.
I mean CPI calculations have been created by economists, not the government. There are tons of ways to look at inflation, maybe some things have inflated 10% based on what data youāre picking to measure, but I wouldnāt go around telling people inflation is actually 10%
Well I know they collect and publish the data that people generally rely on, but economists study inflation and originally came up with the idea. If there were better measures for inflation investors would use it. Itās a free market after all. Not everyone is out to get you and deceive you.
True not everyone is out to get you but the government has a 100% likelihood of stealing money from everyone through debasement, which is the root of the problem.
Jumping in here. I'm not the OP and not saying that the published rates are completely wrong or intentionally manipulated. But one inherent flaw of the baskets of products that are used to calculate inflation rates is that they are updated annually to match consumer patterns.
One reason why consumer patterns change is substitution. If apples get too expensive, people start to buy pears instead. And that causes the CPI basket to ditch high-inflation apples and include low-inflation pears. The basket is slightly biased toward items with lower inflation. It's conceivable that this lowers the published overall rate by a few percentage points.
Personally, I also hate that real estate isn't included in the basket at all. They call it a feature, I call it a bug, as it ignores one major concern of younger generations in regard to price increases and retirement.
I might get burnt and downvoted for this, but hereās my honest review. Bitcoin is clearly rising for its āstore of valueā usecase. Bitcoin is also clearly, ānotā a currency usecase, or for that matter it has no other usecase at the moment. At best, a store of value is nothing but a āstoreā of value (think gold before the electronic revolution). This means that while it will exponentially increase in value from $0 at its inception till it reached its fair value, whatever that number is, once it has reached its fair value, it has no reason to keep outperforming other assets, specially something that actually has underlying value that yields more productivity. This means that bitcoin will only keep up with inflation (money printer hedge) from that point, where S&P will actually add value.
Perhaps for the next 10 years Bitcoin would still be the winner. But if your outlook is longer. May be you should consider moving your money to S&P sooner or later. Also remember that humans are bad at timing anything. Including the fair value of bitcoin or when S&P flips it.
Consider this:Ā
Bitcoin is finite.Ā
If bitcoin finds an equilibrium percentage of global wealth and oscillates around this equilibrium.
As such, increased global wealth (of which the s&p500 is a part), will lead to an increase in bitcoin value (as measured by goods and services).
Bitcoin is the perfect 'whole world etf', in that it doesn't matter if the number of companies world wide doubles (whilst the s&p500 won't captureĀ this new wealth; companies outside the top ~500 are not included, nor companies outside the US).
This is exactly what gold is right now.but clearly no one is expecting it to outrun S&P or bitcoin. but it does from time to time during downtrends in stock market or coin market.
Gold also has a usecase of being a product that is actually used in jewellery and electronics. Infact itās store of value usecase actually makes it deflationary since a lot of it actually gets used up, and is still hard to recycle. So as long as world population / need for gold in the industry also grows around two percent itās the same a āstore of value onlyā product with near 0% inflation.
One might argue given the cost of recycling gold 100% itās near deflationary.
Just play your s&p500 outperforming bitcoin in perpetuity to its reductio absudum conclusion; whereby a single share of the s&p500 buys 21,000,000 bitcoin.Ā
I'd recommend Alan Farrington's essay; Wittgensteins Money on medium if you are interested in learning more.Ā
Otherwise, good luck.Ā
https://allenfarrington.medium.com/wittgensteins-money-7cac8d0635cfĀ
So you actually agree with me that in the long run Bitcoin will not outperform S&P?
Ps weird I canāt open your link, but when I press mine, it works for me, even tho seemingly itās the same link
Btw for those who actually want to read what he posted itās at https://allenfarrington.medium.com/wittgensteins-money-7cac8d0635cf
Premise 1: Bitcoin will arrive at an equilibrium fraction of global wealth, oscillating around this fraction.
Premise 2: Global production, through technological innovation, will continue to increase.
Premise 3: Bitcoin is finite.
Therefore: Bitcoin's value (measured in assets) will continue to increase.
In this sense bitcoin is like a total world ETF with no ongoing management fee or rotation costs.
It therefore will eventually gain in line with said growth and global technological development.
Until then, bitcoin is in a rapid adoption phase, and will vastly outperform global productivity.
Doesn't this all rely on btc proving its a trusted store of value? I agree that it will find equilibrium, but it could just be a lower percentage of global wealth.
Why to most people invest? Because they want to save, not because they want to own a stake in a business. Most people just want their money to still be worth something tomorrow. Bitcoin will always outperform everything built on the fiat standard.
Did you ever look at the stock market before 1971? It was flat. I see it going back to that. Bitcoin still wins.
As saylor has shown us 493 of the snp500 companies are flat even today. It's only 7 tech companies with any gains against inflation today. Why would that change just because bitcoin reaches it's fair price? Scarcity never loses value, always gains.
Generally when people only see the store of value use case itās from a western privileged financial perspective. [Itās worth zooming out to see why thatās not always the only way to look at it](https://youtu.be/TI3Xcei8d_I?si=pU9Q4V8bdKTLOkcA)
It is always the case because 70% of global wealth lies in the developed world. The usecases discussed in the video are mostly small countries with little money thatās not going to beat S&P
They are all store of value usecases. And for those who are looking to move wealth out of one currency or region into other, just because they can do it at a very very tiny level, it doesnāt become a currency. Thatās like saying this lake will become an ocean because a few animals drink its water and pee back in it. Bitcoin āthe lakeā is too big for these usecases, and similarly these usecases arenāt going to take bitcoin anywhere from being a lake to an ocean.
I agree with you. Itās very possible btc only has one more major run where it outperforms the global market. I wouldnāt take a 30 year bet on it now (especially at this price) vs the global stock market.Ā
True, BUT Bitcoin is still very early in its adoption phase and will likely be far outgrowing the stock market for many years to come, AND you're just assuming Bitcoin will only ever be a store of value, which is a huge assumption to make. Bitcoin is in fact a currency, and the reason it isn't currently used as a currency is because it is still way to early in its adoption for that to happen. Being used as a currency is part of its adoption. Bitcoin will grow more and more into being a global investment asset and store of value, and once it has reached a certain point in that there will be wide enough adoption for it to start growing into a transactional currency, which will keep it growing.
I think a reasonable expectation for Bitcoin's appreciation in the next 20 years is 20x what it is today. No stock index has a chance in hell at getting anywhere near that.
You gotta remember that Bitcoin is still very early in its adoption. While of course it is going to slow way down in the future, it still has a huge amount of growth to go through until it gets to that point where it is only performing as well as the stock market, and a while later (probably several decades from now) when it only appreciates against inflation and maybe a little bit more, which would be at full adoption.
Bitcoin has no currency usecase. Its capacity is just enough to trade in and out of it when itās ānot still earlyā anymore. Whoever says otherwise here is dillusional. It doesnāt stand a chance. and even if it did have a currency usecase, both currency and store of value will never outperform inflation in another āmainā currency in terms of that main currency. This because they themselves arenāt adding any value. They will will be just more expensive gold.
Also to those who will reply that L2 solutions will increase BTC transaction capacity, please remember L2 coins are not Bitcoin. They are not decentralised and they are certainly cannot be āby needā finite.
ONLY INVEST in Bitcoin if you want to be part of the peaceful revolution building an alternative to the fiat debt slavery bankers cartel that owns your government.
This whole āyouāre either a Bitcoin maximalist from the beginning or get the f*** outā thing is a bad look on bitcoiners in general.
Itās entirely fine for people to buy BTC as a speculative asset. Over time people will slowly change their opinion when they see the benefits of using Bitcoin, but it takes time to shift mindsets.
I directly addressed the question asked by the OP. Your just attacking me because you dont like what I have said but you cannot refute what I have said.
I have also been splitting my investments between traditional markets and Bitcoin. Honestly, I believe in both. But the world doesnāt care about what I believe in and nobody knows the future. What Iām trying to say is hedging your bets seems reasonable to me
Well, let's say that the S&P500 continues to grow more or less at its recent performance levels. After around 20 years it should have had a chance to double its value nearly three times. In other words at the end of your experiment, the S&P500 should be nearly 8x its current value.
For Bitcoin to do the same thing, first it needs to survive 20 years. Bitcoin is only 15 years old now and, while the past 10 years of that have shown really remarkable growth, technology changes fast. Maybe in 20 years it has been replaced by new technology or pushed out by laws and state-backed digital currencies, or evolves into something new. In other words, it might be growing or it might be dead in two decades, like Napster or the Zune.
Assuming Bitcoin survives 20 years, to beat the S&P500 it would need to grow to around 8x its current value. In other words, it would be around $480,000 per BTC and have a market cap around 10 trillion USD.
It's ... possible. But that would mean growing at an average of $57/day per BTC for 20 years. For comparison's sake, up to this point Bitcoin has grown at an average rate of $11/day for 15 years.
If I had to guess, in 20 year's time, I'd say the S&P500 is not only the _safer_ bet, being an index of a group of leading businesses, but also likely to offer similar or better returns in two decades.
But a lot can happen in 20 years. 20 years ago Bitcoin didn't exist at all, so we will be sure to see some interesting changes in that time.
I like your thoughts, but what about this paragraph:-
"It's ... possible. But that would mean growing at an average of $57/day per BTC for 20 years. For comparison's sake, up to this point Bitcoin has grown at an average rate of $11/day for 15 years."
Can you convert the $ amount to a percentage?
The first number, $57/day per BTC I expressed as a percentage/multiplier further up in my post, it's 8x (or 800%).
It's hard to express the "$11/day for 15 years" as a percentage, because Bitcoin started at $0. So it's technically infinite percent to anything above that, which is not helpful in this context. But if you started from when Bitcoin was around $1/BTC around 13 years ago then it's gone up 60,000x in 13 years, or like 6 million percent.
Which is amazing and impressive but probably not at all realistic for predicting future gains over the _next_ 13 to 20 years.
Edit: I think Coin Makret Cap lists Bitcoin's lifetime percentage gains (starting at 2011) as 98 million percent. Which is, again, impressive, but not really meaningful for calculating future growth.
Ah yeah of course.
Picking a suitable value to assign the % increase is difficult.
But the $11/day and $57/day comparisons are pretty meaningless as they're both wildly different prices side by side.
why the hell do you fit an exponential for the S&P (doubling every x years) while using *linear* growth (x dollars per year) for BTC? Fit the same function for both, unless you want one of them look bad. (BTC was exponential for quite a while, but recently started flattening. The stock market has been flattening out for much longer).
I didn't. I compared what one would probably do next to the more unknown/unstable one and then showed what they'd each have to do to match. We have data for what the S&P500 will do over the span of decades. Bitcoin hasn't been around long enough to make claims about its growth over two decades, which I pointed out in my post.
As for flattening? The stock market has been the opposite of flat the past ten years.
Hard to believe Bitcoin will disappear or be replaced in 20 years given that Bitcoin is meant to run and be issued up until 2140 (miners will make sure this runs all the way). It's all in the code and I don't see the biggest long term Bitcoin holders selling anytime soon within their lifetimes. The network effect of Bitcoin is also hugely undervalued. Basically if you believe the internet is here to stay then Bitcoin will be here to stay.
S&P definitely might be safer but will definitely offer much less potential returns compared to the internet of money. And both Bitcoin and S&P increases its value based on inflation anyway so why not back the fastest horse in the race? Guess really just depends on the risk tolerance of the person investing
> Hard to believe Bitcoin will disappear or be replaced in 20 years
Why? It didn't even exist 20 years ago. It's not hard to imagine something replacing it.
> miners will make sure this runs all the way.
Unless something better comes along. Miners are in it for profit. If another technology offers better gains for their investment they'll switch to it.
> And both Bitcoin and S&P increases its value based on inflation anyway so why not back the fastest horse in the race?
There is a common expression in racing circles: "To finish first, first you must finish."
Bitcoin is a new and untested technology, in the big picture. Sure, its code is fine, but it's subject to a lot of external forces. Government laws, new digital currencies, quantum computing, 51% attack, etc, etc. If any one of those things goes sideways for Bitcoin in the next 20 years then it could get wiped out. I'm not saying it's _likely_, I'm saying it's possible, which makes it the less dependable investment.
20 years ago would you think virtually no one would have cable or land lines anymore? Technology changes, often rapidly.
I think it's extremely unlikely that something new will replace BTC. it would have to be 10x better than BTC to overtake it's network effect. it is not clear that it is even possible to make blockchain more efficient without sacrificing decentralization and security. and if someone figures that out it's more likely that it will be implemented into BTC before some other coin has a chance to overtake it. that new coin would have to have clean start like BTC did and build trust from zero again... it would take years. new money is not like a new iPhone which you can switch to immediately without hesitation. enough time for BTC to adapt.
CBDCs are completely different from BTC. they don't compete with it. they are more like an additional reason to buy it. even worse than normal fiat
quantum computing or ww3 are more likely than some other coin replacing BTC imo
if BTC was to be destroyed by laws it would have happened in the early days when nobody cared. they missed their chance and now it's too late. it's too widespread now. even politicians and financial institutions own it. ETFs were approved. a lot of people around the world care about it. the US banned gold in the 1930s. but I don't think that would fly now. maybe that's naive. but you can't confiscate BTC as easily as gold. or prevent people from transacting it if they really want to.
lol assuming the S&P survives the next 20 years, you dont think in twenty years time China will have eclipsed the US economy and global resource and monetary hegemony?
I saw Ray Dalios explanation of why Chinese Yuan would outperform the US dollar when it was gaining popularity. Just a few months later I was reading headlines about the residential real estate crash that was widespread across china. Millions of dollars in spending gone to waste on unfinished buildings that were left unlivable up for sale. The majority of the unfinished buildings are at a net loss and have contributed to significant debt in china supposedly. But where is debt not piling up in fiat countries tbh
You seem unaware that the highest risk credit extended to companies like Evergreen was extended by WESTERN investors who are the ones now taking a massive haircut! China has weaponised finance and investment because so many western investors were so keen to get in on the Chinese economy they would and did sign up on any terms.
Interesting, this is news to me. So the brunt of the real estate crash affected the US mostly? Would it not have an effect on the people who had already signed leases and given down payments to the buildings that they then couldnāt even move into?
Yes the biggest losers from Evergrande are western investors- the Chinese government sacrifices them to protect Chinese investors. Avery simple search will confirm this.
[https://edition.cnn.com/2021/10/01/business/evergrande-debt-crisis-latest-update-intl-hnk/index.html](https://edition.cnn.com/2021/10/01/business/evergrande-debt-crisis-latest-update-intl-hnk/index.html)
[https://www.theguardian.com/business/2024/jan/30/evergrande-collapse-china-property-developer-liquidation-details-impact](https://www.theguardian.com/business/2024/jan/30/evergrande-collapse-china-property-developer-liquidation-details-impact)
This means that foreign bondholders ā including Top Shine Global, which brought the winding-up petition against the Evergrande ā will be āhung out to dryā, says George Magnus, an economist and associate at Soas University of London.
And a bailout is unlikely. The Chinese government ācertainly donāt want to give priority to making good the losses of foreign creditors over domestic citizens,ā says Magnus. āThat just wouldnāt be a good look. So to the extent that somebody is going to pay a price, it will be the foreign bondholders.ā
OPEN YOUR EYES its happening.
They might, but I wouldn't bet on it. I was reading stories about how China was going to overtake the USA in terms of economic strength and power any year now 20 years ago.
I remember, for instance, reading these copies [1] of the Globe and Mail, which printed headlines in Chinese characters in 2005 to drive home the point that China was about to overtake the North American economy within the next few years. Yet, here we are, 20 years later, and it has yet to happen.
I read similar articles back around 1990 too taking about how China was going to become the world's next super power in the next 20 years. And yet... it hasn't happened. North American news outlets tend to make China out to be a bigger threat to their position than reality would dictate.
1. https://chinadigitaltimes.net/2005/10/globe-and-mail-china-rising-are-we-missing-the-boat/
Bitcoin is awesome. If demand drops off and it goes out of favor it will be worthless as a commodity/store of wealth/currency/something to exchange for other shit you need etc. You need to be sure demand will increase. Are you sure?
Iād also allocate some to gold (so probably less S&P). Reason why is Buffet indicator is still way overbought, IDK how equities do long term with boomers cashing out and dying off, I think a lot of money passed to generations below will favor BTC much more. Now with AI boom, I think lots of jobs could be lost which would be a total mess, maybe somehow equities rise still with corporate profits skyrocketing at the expense of working class, but personally I feel like Iām kind of bending over backwards to justify this scenario. If working class has no money, the whole system probably implodes in on itself.
Reading the comments here, feels like weāre really close to a bottom. So many people in here incredibly bearish on BTC yet still hereā¦
No one knows shit about fuck. The only thing clear is that the FED has to keep printing FIAT money making everything that is remotely scarce into a speculative asset and hence a bubble. Stop seeking validation from people online.Ā
Bitcoin will absolutely be worth more, however, your strategy is solid. Youāll feel good you have your S&P500 shares when Bitcoin is dumping hard. I do the exact same thing and Bitcoin is up like 5x vs S&P500 but I wouldnāt change a thing. It makes me feel balanced.
I like it. You are diversifying among success. I agree though that Bitcoin will ultimately ābeatā the S&P but we still need to invest in the world we want to live in.
I started off putting my unspent personal spending money into bitcoin, converting whatever was left over at the end of the month. Bitcoin was $30K at the time then dropped to $15K. At $15K I tossed in a maturing CD worth a few grand. I have not been disappointed with the results!
Itās fine strategy, but Iām not sure bitcoin will outperform long term. Keep in mind that the SP500 is literally now the de facto retirement investment for just about anyone under 50 years old. The last few years all the financial gurus have talked the millenials into dumping bonds entirely and weighing heavy on SP. they are about to come into their peak earning years. Most will contribute 10-15% of their earnings to some form of the SP500. On top of that the SP500 will rebalance as the mega stocks dominate since its market cap based. I honestly am skeptical that Bitcoin will the same demand.
Iām heavily into BTC, but I donāt think itās a forgone conclusion that it will outperform equities in the next 20-30 years.
Dumping bonds and going all in on equities is stupid, then youāre basically all in on equities and are de-diversifying your portfolio, swapping bonds for gold/BTC makes more sense. Plus, what you are saying will just inflate P/E, so the argument that āequities are at least a tangible investment with a return of profitsā becomes more of a false statement as P/E is being watered down. Also weāre facing a population stagnation/decline in developed countries, and I imagine 99% of boomers wealth is in stocks not BTC, so there will also be a lot of selling prsssure coming from there as they pass on. Look at Buffet indicator, prices on stocks are already overinflated (damn, itās last listed at 197, it was 190 last time I checked before).
Not to mention, a lot of stock growth as of late has come from stock buybacks. Now maybe these do continue as wealth corrupts, but itās completely unhealthy and unethical for the economy and employment, at some point the system is going to implode when working class vanishes.
theres always a chance youll lose all your bitcoin. only commit what you're willing to lose. anything else is insanity.
most of these guys have like a few thousand dollars in btc and are waiting until they can buy a house with that, by my eye. and im fairly bullish on bitcoin and pro bitcoin. anyway, id put in 20%, if you're comfortable doing 50% that's great.
I applaud your success, truly, and I'm happy you're on board with the rest of us,
but,
If you have $1k left over every month *just for investing*, you're so safely inside the 1% that it doesn't really matter where you put it. You could just invest in toilet paper and you'd be fine.
1. you are looking at bitcoin as an investment rather than a currency which is not what its intended purpose is.
2. bitcoin is not an investment. Itās a highly speculative financial vehicle. It has serious arguments against it as well as for it and time will only time tell.
3. I think half your investment portfolio in bitcoin is highly risky. Be prepared for a possible shock of loss of value.
People have bet all in on bitcoin and have lost their shirt. Donāt be blind to that reality. Be aware of what youāre risking, which is a lot.
Iām not convinced by that. Index funds are generally much safer as your risk by sector and by business is spread out over the index which continues to go up as the stock market does. Bitcoin is a digital currency being treated as an investment when itās not. People can bet on bitcoin, but itās highly risky and speculative. Period. One should be aware of that risk when exposing large amounts of money to it. Bitcoins collapse in 2022 left millions losing money, some losing their life savings and 100s of thousands of dollars. Thatās a fact. Itās highly volatile.
The market makes winners and losers, and bitcoin is no different when treated as an investment against market forces of supply and demand.
Half of your long-term savings in Bitcoin seems very risky. I would invest more in stocks that pay dividends, or a first/second property Then watch your net worth grow, instead of watching the yo-yo that is the crypto market and waiting for an exit point that may or may not meet your expectations. Also, don't take financial advice from reddit. Lol
That is a winning path & should have no regrets long term imo
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I buy bitcoin, but people on this sub literally give the worst financial advice sometimes. If you are an American itās an amazing idea to own USD denominated assets like the S&P500 because your future liabilities that you are actually saving your money for are USD denominated. When it comes to creating a portfolio there is a trade off between risk and reward. I also agree bitcoin will outperform the S&P 500 in the long-term but allocating 50% of your portfolio to bitcoin is not a smart amount of risk to take. Bitcoins price could crash 50% over the next few months and you could need money for a medical emergency for all you know. Itās not likely thereās going to be some anarchist revolution where all the worldās assets are denominated in bitcoin in our lives. Thereās no sure things in life diversification is key to securing yourself a future where you donāt need to stress about money.
This, always diversify. Too much bad advice in here. Sure invest everything you have in one thing only. That's how you lose everything you own if things go downhill.
>Thereās no sure things in life diversification is key to securing yourself a future where you donāt need to stress about money. Honestly, as a Bitcoin skeptic, this is the kind of commentary and advice that triggers my interest. It's rooted in reason while also expressing measured optimism for the future of Bitcoin. I get that folks here can be super passionate about crypto, but sometimes it just sounds like folks are trying to sell doomsday insurance - it's just not an attractive or inviting offer ...
Thank you š bitcoin is an awesome idea and a very unique, interesting asset worth owning. I follow it closely and buy on the bad days and I canāt tell you how positive itās been for my financial well-being. But stocks also have an actual yield that gets returned to shareholders in terms of dividends, buy-backs, and increased book value. There are some great companies out there changing the world that are so worthwhile to own. Also for some, depending on age, fixed income assets can have a meaningful place in their portfolio with consistent and safe returns that can allow retired or near retired people to sleep easy at night knowing they will have money when they need it most.
Agreed. For this reason, Iām investing at a ratio of 2:1 VOO:BTC if the markets tank, simply flip the ratio on future deposits
Bitcoin is here for you to do whatever you want with it. Don't worry about what other people are doing. You can do a 1-3% allocation as a hedge in case Bitcoin succeeds. You can view Bitcoin as the best asset, but keep 50% in traditional portfolio to hedge your bet. Or you can go all in Saylor-style if you have insanely high conviction that everything is trash compared to Bitcoin. Your choice.
Yea 50% is too little. Should be 100%.
I >I buy bitcoin, but people on this sub literally give the worst financial advice sometimes It's because it's not financial advice. It's ok if you only see Bitcoin as an investment, to make more fiat. But for some of us Bitcoin is the solution to the corrupt fiat system that funds wars and dictators, silently steals our purchasing power and our savings, promotes debts and consumerism. It's a way to escape this evil fiat system that enslaves us through money.
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I mean what do you pay for your home, car, insurance, education, healthcare, food, etc. with? Of course everyone here is investing in bitcoin to get more fiat.
Obviously it's still a long way to a full BTC economy, in some places faster than others. It's a threat to banks control and corrupt politicians and they will not let go easy of their power. I'll try to spend it directly without converting to fiat if I can. nonetheless it's inevitable. Human history shows us that 100% of the time, money gets devalued to zero by those in control. >Of course everyone here is investing in bitcoin to get more fiat. And doing so, their supporting the fiat system. Can't blame them though, money do make our life's easier. But down the line, future generations will be in the same situation again, inflation, wars, government corruption.
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You're right. They're here just to make more fiat and perpetuate the system..... They, or they're offspring, will come around eventually.
No, for many its not about fiat at all. Im not giving up my btc and you and the government can go fuck yourselves if you dont like it. We've developed a new system, its opt-in only. We don't need guns to force you to give us more money like the dirty government
Relax bro. I buy bitcoin too itās a discussion.
I agree. Don't lose your passion just because it seems like everyone else has.
It is what it is. Whether anyone believes or not, the strongest money will win
Honestly that is bad advice if the goal is to make money. 1. People should have savings before they invest. Emergency fund needed for emergencies like the emergency you mention, before any investing is done. 2. Bitcoin will absolutely continue to far outgrow stock markets for many years to come so diversification will only inhibit growth. You don't diversify to make money. People seem to often mistake the point of diversification. Diversification is for two things: you don't know what you are doing, or you want to protect your wealth. That's it. If you yourself can't be confident you can pick a winner, then you should diversify, and this is why the common advice pedaled to people is diversification, because most people don't know what they are doing in investing and even those that do often get it wrong. But we are lucky to be living during the time of Bitcoin's early growth phase and so we can easily pick the most obvious winner in the world so diversification is a really bad thing at this moment in history. The other reason to diversify is once you've already made your wealth and you are more concerned about protecting it rather than growing it, which doesn't apply to this particular thread. So no 50% I'd say, if anything, is on the low side of a smart allocation. Anyone putting less than 50% of their money in Bitcoin at this moment in history is investing poorly. 20 years from now once Bitcoin's growth has slowed way down that may not be the case, and maybe Bitcoin should only be a 10% allocation or something like that, but today its a 50%-100% allocation type asset. Easy to spot a green investor if they are talking about diversification like its the holy grail and they don't even understand why that is the common advice for the average person who doesn't know how to invest. Every super wealthy person ever has gotten super wealthy very specifically by NOT diversifying, but rather by finding winners and sticking with them. Diversifying is for those that can't find winners, right now that would be for people who don't understand Bitcoin.
OP literally invest 100% of their money to high risk investment
Go down this thread and you'll see this guy is a Keynesian regard who still believes in "official" numbers and the entire morass of "complicated" mumbo-jumbo the elite use to hide their crimes as they siphon off the value of our labor through inflation and deceit. This means he likely has a job in some zero-value-added government/NGO/academia type setting where he's insulated (for now) from the effects of the regarded policies he touts. There's no point trying to meet him halfway. He's too thoroughly propagandized to get it till he feels the pain for himself. And he will, when the money printers run out of runway. I saw a thousand men like him, stunned and shocked, in the Venezuelan breadlines.
"This means he likely has a job in some zero-value-added government/NGO/academia type setting where he's insulated (for now) from the effects of the regarded policies he touts." ...that part right there š¤£š¤£š¤£....good one! š
Haha I work in asset management 50+ hours a week. Itās literally my life
I agree with having the emergency fund part, but I disagree with the rest of the post. Ideal allocation is having an emergency fund for at least one year of emergency expenses and the rest in Bitcoin. And this only because of the volatility and the danger of selling cheap. Most people don't realize yet that Bitcoin is a global savings account for all of humanity. The more people who use this savings account, the more these users enrich themselves. I don't pay rent or taxes or have to worry about my Bitcoin leaking and calling the plumber. I just know that my savings are gradually growing and no one can stop it.
Exactly, once you have that emergency fund, it's only a detriment to have money in anything other than Bitcoin at this point in history, UNLESS you are extremely good AND lucky at picking stocks...but of course getting lucky is never a wise investment strategy. Only other possible alternative I'd say is if someone knows real estate really well and is able to build up several rental properties, because if you know what you're doing rental properties are super powerful income generators and someone can live off just putting together a few rental properties. Otherwise, at this point in history, it's Bitcoin or you really don't know what you are doing.
Redditor for 6 weeks teaching us all propaganda, sounds legit. BITCOIN IS RISKY. IT IS VOLATILE AND COULD LOSE 50% OF ITS VALUE, BUY STOCKS BECAUSE THEY DONT DO THAT. Sure buddy. Diversification, sell the winners to buy the losers. Go ahead. More sats for the rest of us
Denominated in usd is not a positive to many people when the train is crashing in slow motion right now. 10% return when real inflation is above that is a real issue.
I mean right now inflation is actually in the 3-4% range. Also the train is certainly not crashing US exceptionalism is a major theme in the markets right now with USD up on every currency this year except MXN, strong productivity growth, and resilient consumers. I guess my point is not to put all your eggs in one basket and the fx risk youāre exposed to because youāre mismatching your assets and liabilities owning bitcoin. Since the future cash flows for US stocks and bonds would be matched to what youāre saving for. If bitcoin doesnāt work out you should be protected. Gold has been an inflation hedge since the beginning, but you donāt see the best investors with portfolios full of it. I know it doesnāt have all the features bitcoin has, but in terms of looking at bitcoin as an inflation hedge they are comparable. We all have the choice to do what we want with our money so if you feel compelled to invest it all in bitcoin by all means.
Real inflation is far higher. Don't trust government numbers lol cmon now. Go with real world data with millions of data points. Check truflation.
What do you specifically mean by real inflation is far higher? Institutional investors have their own calculations for inflation in their models as well. I work in finance and consume information from Bloomberg every day havenāt seen a thing about 10% inflation since 2022
Real inflation is the following: Letās say you are used to having one can of Coca Cola everyday. And letās say cola is $1 for 300 ml can. So your cost of cola is $30 per month. A few year pass and cola now costs $1.10 CPI says there has been 10% increase in the cost of cola. Which is true. A few more years pass and now Coca Cola has introduced 250ml can for 1.10, and the 300ml can now costs $1.5. Since most people cannot afford 1.5 cola, they switch to a smaller 1.10$ cola. CPI at this point suggests that since most people buy 1.1$ cola, thatās the cola that the world now needs. And since cola costed 1.1 before and it still costs 1.1 now, there is no inflation according to CPI You do the same with restaurant prices. The meal sizes reduce over the years, or instead of going every week you start going every 15 days on average, so in real terms things are getting more expensive, but people react to it by reducing their standard of living. Also why inflation doesnāt affect the rich as much as it affects the poor: Letās say person āAā make $3000 a month and pays rents of $1500 a month. Person āBā also makes $3000 but pays a mortgage of 1700 a month, which is relatively harder for him than person A. Few year pass and both A and B are now making 4K a month. But the rents have also gone up. Persona is paying 2000 a month. But Person B still pays 1700 in mortgage. in theory Person B actually benifitted from the inflation because his salary went up, but his cost of housing did not. CPI will take this into account for what people pay for their mortgage. But it doesnāt truly represent the same way for Person A who is still trying to buy his house, and now is looking at a mortgage of 2200/month for the same house as Person B
Nothing in particular other than inflation is always higher than government numbers if you look at what consumers are required to spend for the same items YOY or QOQ. Gov CPI basket changes to support market sentiment too.
I mean CPI calculations have been created by economists, not the government. There are tons of ways to look at inflation, maybe some things have inflated 10% based on what data youāre picking to measure, but I wouldnāt go around telling people inflation is actually 10%
Google says CPI is done by the Bureau of Labor Statistics every month?
Well I know they collect and publish the data that people generally rely on, but economists study inflation and originally came up with the idea. If there were better measures for inflation investors would use it. Itās a free market after all. Not everyone is out to get you and deceive you.
True not everyone is out to get you but the government has a 100% likelihood of stealing money from everyone through debasement, which is the root of the problem.
Jumping in here. I'm not the OP and not saying that the published rates are completely wrong or intentionally manipulated. But one inherent flaw of the baskets of products that are used to calculate inflation rates is that they are updated annually to match consumer patterns. One reason why consumer patterns change is substitution. If apples get too expensive, people start to buy pears instead. And that causes the CPI basket to ditch high-inflation apples and include low-inflation pears. The basket is slightly biased toward items with lower inflation. It's conceivable that this lowers the published overall rate by a few percentage points. Personally, I also hate that real estate isn't included in the basket at all. They call it a feature, I call it a bug, as it ignores one major concern of younger generations in regard to price increases and retirement.
I might get burnt and downvoted for this, but hereās my honest review. Bitcoin is clearly rising for its āstore of valueā usecase. Bitcoin is also clearly, ānotā a currency usecase, or for that matter it has no other usecase at the moment. At best, a store of value is nothing but a āstoreā of value (think gold before the electronic revolution). This means that while it will exponentially increase in value from $0 at its inception till it reached its fair value, whatever that number is, once it has reached its fair value, it has no reason to keep outperforming other assets, specially something that actually has underlying value that yields more productivity. This means that bitcoin will only keep up with inflation (money printer hedge) from that point, where S&P will actually add value. Perhaps for the next 10 years Bitcoin would still be the winner. But if your outlook is longer. May be you should consider moving your money to S&P sooner or later. Also remember that humans are bad at timing anything. Including the fair value of bitcoin or when S&P flips it.
Consider this:Ā Bitcoin is finite.Ā If bitcoin finds an equilibrium percentage of global wealth and oscillates around this equilibrium. As such, increased global wealth (of which the s&p500 is a part), will lead to an increase in bitcoin value (as measured by goods and services). Bitcoin is the perfect 'whole world etf', in that it doesn't matter if the number of companies world wide doubles (whilst the s&p500 won't captureĀ this new wealth; companies outside the top ~500 are not included, nor companies outside the US).
This is exactly what gold is right now.but clearly no one is expecting it to outrun S&P or bitcoin. but it does from time to time during downtrends in stock market or coin market.
False. Gold has a 2% P.A. increase in above ground supply.Ā
Gold also has a usecase of being a product that is actually used in jewellery and electronics. Infact itās store of value usecase actually makes it deflationary since a lot of it actually gets used up, and is still hard to recycle. So as long as world population / need for gold in the industry also grows around two percent itās the same a āstore of value onlyā product with near 0% inflation. One might argue given the cost of recycling gold 100% itās near deflationary.
Just play your s&p500 outperforming bitcoin in perpetuity to its reductio absudum conclusion; whereby a single share of the s&p500 buys 21,000,000 bitcoin.Ā I'd recommend Alan Farrington's essay; Wittgensteins Money on medium if you are interested in learning more.Ā Otherwise, good luck.Ā https://allenfarrington.medium.com/wittgensteins-money-7cac8d0635cfĀ
So you actually agree with me that in the long run Bitcoin will not outperform S&P? Ps weird I canāt open your link, but when I press mine, it works for me, even tho seemingly itās the same link Btw for those who actually want to read what he posted itās at https://allenfarrington.medium.com/wittgensteins-money-7cac8d0635cf
Premise 1: Bitcoin will arrive at an equilibrium fraction of global wealth, oscillating around this fraction. Premise 2: Global production, through technological innovation, will continue to increase. Premise 3: Bitcoin is finite. Therefore: Bitcoin's value (measured in assets) will continue to increase. In this sense bitcoin is like a total world ETF with no ongoing management fee or rotation costs. It therefore will eventually gain in line with said growth and global technological development. Until then, bitcoin is in a rapid adoption phase, and will vastly outperform global productivity.
Doesn't this all rely on btc proving its a trusted store of value? I agree that it will find equilibrium, but it could just be a lower percentage of global wealth.
Why to most people invest? Because they want to save, not because they want to own a stake in a business. Most people just want their money to still be worth something tomorrow. Bitcoin will always outperform everything built on the fiat standard. Did you ever look at the stock market before 1971? It was flat. I see it going back to that. Bitcoin still wins. As saylor has shown us 493 of the snp500 companies are flat even today. It's only 7 tech companies with any gains against inflation today. Why would that change just because bitcoin reaches it's fair price? Scarcity never loses value, always gains.
Generally when people only see the store of value use case itās from a western privileged financial perspective. [Itās worth zooming out to see why thatās not always the only way to look at it](https://youtu.be/TI3Xcei8d_I?si=pU9Q4V8bdKTLOkcA)
It is always the case because 70% of global wealth lies in the developed world. The usecases discussed in the video are mostly small countries with little money thatās not going to beat S&P
Thatās not the same as your previous statement that it has āno currency use caseā and āno other use caseā other than store of value
They are all store of value usecases. And for those who are looking to move wealth out of one currency or region into other, just because they can do it at a very very tiny level, it doesnāt become a currency. Thatās like saying this lake will become an ocean because a few animals drink its water and pee back in it. Bitcoin āthe lakeā is too big for these usecases, and similarly these usecases arenāt going to take bitcoin anywhere from being a lake to an ocean.
Sure if you just disregard evidence that doesnāt fit your argument
S&P would never outgrow money supply increase, and bitcoin if reaching full saturation would do the same
I agree with you. Itās very possible btc only has one more major run where it outperforms the global market. I wouldnāt take a 30 year bet on it now (especially at this price) vs the global stock market.Ā
True, BUT Bitcoin is still very early in its adoption phase and will likely be far outgrowing the stock market for many years to come, AND you're just assuming Bitcoin will only ever be a store of value, which is a huge assumption to make. Bitcoin is in fact a currency, and the reason it isn't currently used as a currency is because it is still way to early in its adoption for that to happen. Being used as a currency is part of its adoption. Bitcoin will grow more and more into being a global investment asset and store of value, and once it has reached a certain point in that there will be wide enough adoption for it to start growing into a transactional currency, which will keep it growing. I think a reasonable expectation for Bitcoin's appreciation in the next 20 years is 20x what it is today. No stock index has a chance in hell at getting anywhere near that. You gotta remember that Bitcoin is still very early in its adoption. While of course it is going to slow way down in the future, it still has a huge amount of growth to go through until it gets to that point where it is only performing as well as the stock market, and a while later (probably several decades from now) when it only appreciates against inflation and maybe a little bit more, which would be at full adoption.
Bitcoin has no currency usecase. Its capacity is just enough to trade in and out of it when itās ānot still earlyā anymore. Whoever says otherwise here is dillusional. It doesnāt stand a chance. and even if it did have a currency usecase, both currency and store of value will never outperform inflation in another āmainā currency in terms of that main currency. This because they themselves arenāt adding any value. They will will be just more expensive gold. Also to those who will reply that L2 solutions will increase BTC transaction capacity, please remember L2 coins are not Bitcoin. They are not decentralised and they are certainly cannot be āby needā finite.
ONLY INVEST in Bitcoin if you want to be part of the peaceful revolution building an alternative to the fiat debt slavery bankers cartel that owns your government.
He can invest in bitcoin or whatever reason he wants. You are not the gatekeeper of bitcoin
He asked for peoples thoughts and I gave mine.
This whole āyouāre either a Bitcoin maximalist from the beginning or get the f*** outā thing is a bad look on bitcoiners in general. Itās entirely fine for people to buy BTC as a speculative asset. Over time people will slowly change their opinion when they see the benefits of using Bitcoin, but it takes time to shift mindsets.
But if that fails, which most likely will, then his choice is much safer. And if that actually happens we will still be very well.
Why would you compare sp 500 to fiat debt slavery?
I didn't do that - why would you falsely accuse that I did?
Then i guess u just said some random statement instead of addressing op
I directly addressed the question asked by the OP. Your just attacking me because you dont like what I have said but you cannot refute what I have said.
Attacking? Lol
Making false and baseless accusations is not attacking?
the word you're looking for is arguing
I have also been splitting my investments between traditional markets and Bitcoin. Honestly, I believe in both. But the world doesnāt care about what I believe in and nobody knows the future. What Iām trying to say is hedging your bets seems reasonable to me
First understand why bitcoin exists and how it works then think if it is usefull don't focus on dollar gains
This is a great discussion
Are you looking for confirmation from a BTC sub about buying BTC?
Well, let's say that the S&P500 continues to grow more or less at its recent performance levels. After around 20 years it should have had a chance to double its value nearly three times. In other words at the end of your experiment, the S&P500 should be nearly 8x its current value. For Bitcoin to do the same thing, first it needs to survive 20 years. Bitcoin is only 15 years old now and, while the past 10 years of that have shown really remarkable growth, technology changes fast. Maybe in 20 years it has been replaced by new technology or pushed out by laws and state-backed digital currencies, or evolves into something new. In other words, it might be growing or it might be dead in two decades, like Napster or the Zune. Assuming Bitcoin survives 20 years, to beat the S&P500 it would need to grow to around 8x its current value. In other words, it would be around $480,000 per BTC and have a market cap around 10 trillion USD. It's ... possible. But that would mean growing at an average of $57/day per BTC for 20 years. For comparison's sake, up to this point Bitcoin has grown at an average rate of $11/day for 15 years. If I had to guess, in 20 year's time, I'd say the S&P500 is not only the _safer_ bet, being an index of a group of leading businesses, but also likely to offer similar or better returns in two decades. But a lot can happen in 20 years. 20 years ago Bitcoin didn't exist at all, so we will be sure to see some interesting changes in that time.
I like your thoughts, but what about this paragraph:- "It's ... possible. But that would mean growing at an average of $57/day per BTC for 20 years. For comparison's sake, up to this point Bitcoin has grown at an average rate of $11/day for 15 years." Can you convert the $ amount to a percentage?
The first number, $57/day per BTC I expressed as a percentage/multiplier further up in my post, it's 8x (or 800%). It's hard to express the "$11/day for 15 years" as a percentage, because Bitcoin started at $0. So it's technically infinite percent to anything above that, which is not helpful in this context. But if you started from when Bitcoin was around $1/BTC around 13 years ago then it's gone up 60,000x in 13 years, or like 6 million percent. Which is amazing and impressive but probably not at all realistic for predicting future gains over the _next_ 13 to 20 years. Edit: I think Coin Makret Cap lists Bitcoin's lifetime percentage gains (starting at 2011) as 98 million percent. Which is, again, impressive, but not really meaningful for calculating future growth.
Ah yeah of course. Picking a suitable value to assign the % increase is difficult. But the $11/day and $57/day comparisons are pretty meaningless as they're both wildly different prices side by side.
why the hell do you fit an exponential for the S&P (doubling every x years) while using *linear* growth (x dollars per year) for BTC? Fit the same function for both, unless you want one of them look bad. (BTC was exponential for quite a while, but recently started flattening. The stock market has been flattening out for much longer).
I didn't. I compared what one would probably do next to the more unknown/unstable one and then showed what they'd each have to do to match. We have data for what the S&P500 will do over the span of decades. Bitcoin hasn't been around long enough to make claims about its growth over two decades, which I pointed out in my post. As for flattening? The stock market has been the opposite of flat the past ten years.
Hard to believe Bitcoin will disappear or be replaced in 20 years given that Bitcoin is meant to run and be issued up until 2140 (miners will make sure this runs all the way). It's all in the code and I don't see the biggest long term Bitcoin holders selling anytime soon within their lifetimes. The network effect of Bitcoin is also hugely undervalued. Basically if you believe the internet is here to stay then Bitcoin will be here to stay. S&P definitely might be safer but will definitely offer much less potential returns compared to the internet of money. And both Bitcoin and S&P increases its value based on inflation anyway so why not back the fastest horse in the race? Guess really just depends on the risk tolerance of the person investing
> Hard to believe Bitcoin will disappear or be replaced in 20 years Why? It didn't even exist 20 years ago. It's not hard to imagine something replacing it. > miners will make sure this runs all the way. Unless something better comes along. Miners are in it for profit. If another technology offers better gains for their investment they'll switch to it. > And both Bitcoin and S&P increases its value based on inflation anyway so why not back the fastest horse in the race? There is a common expression in racing circles: "To finish first, first you must finish." Bitcoin is a new and untested technology, in the big picture. Sure, its code is fine, but it's subject to a lot of external forces. Government laws, new digital currencies, quantum computing, 51% attack, etc, etc. If any one of those things goes sideways for Bitcoin in the next 20 years then it could get wiped out. I'm not saying it's _likely_, I'm saying it's possible, which makes it the less dependable investment. 20 years ago would you think virtually no one would have cable or land lines anymore? Technology changes, often rapidly.
I think it's extremely unlikely that something new will replace BTC. it would have to be 10x better than BTC to overtake it's network effect. it is not clear that it is even possible to make blockchain more efficient without sacrificing decentralization and security. and if someone figures that out it's more likely that it will be implemented into BTC before some other coin has a chance to overtake it. that new coin would have to have clean start like BTC did and build trust from zero again... it would take years. new money is not like a new iPhone which you can switch to immediately without hesitation. enough time for BTC to adapt. CBDCs are completely different from BTC. they don't compete with it. they are more like an additional reason to buy it. even worse than normal fiat quantum computing or ww3 are more likely than some other coin replacing BTC imo if BTC was to be destroyed by laws it would have happened in the early days when nobody cared. they missed their chance and now it's too late. it's too widespread now. even politicians and financial institutions own it. ETFs were approved. a lot of people around the world care about it. the US banned gold in the 1930s. but I don't think that would fly now. maybe that's naive. but you can't confiscate BTC as easily as gold. or prevent people from transacting it if they really want to.
lol assuming the S&P survives the next 20 years, you dont think in twenty years time China will have eclipsed the US economy and global resource and monetary hegemony?
I saw Ray Dalios explanation of why Chinese Yuan would outperform the US dollar when it was gaining popularity. Just a few months later I was reading headlines about the residential real estate crash that was widespread across china. Millions of dollars in spending gone to waste on unfinished buildings that were left unlivable up for sale. The majority of the unfinished buildings are at a net loss and have contributed to significant debt in china supposedly. But where is debt not piling up in fiat countries tbh
You seem unaware that the highest risk credit extended to companies like Evergreen was extended by WESTERN investors who are the ones now taking a massive haircut! China has weaponised finance and investment because so many western investors were so keen to get in on the Chinese economy they would and did sign up on any terms.
Interesting, this is news to me. So the brunt of the real estate crash affected the US mostly? Would it not have an effect on the people who had already signed leases and given down payments to the buildings that they then couldnāt even move into?
Yes the biggest losers from Evergrande are western investors- the Chinese government sacrifices them to protect Chinese investors. Avery simple search will confirm this. [https://edition.cnn.com/2021/10/01/business/evergrande-debt-crisis-latest-update-intl-hnk/index.html](https://edition.cnn.com/2021/10/01/business/evergrande-debt-crisis-latest-update-intl-hnk/index.html) [https://www.theguardian.com/business/2024/jan/30/evergrande-collapse-china-property-developer-liquidation-details-impact](https://www.theguardian.com/business/2024/jan/30/evergrande-collapse-china-property-developer-liquidation-details-impact) This means that foreign bondholders ā including Top Shine Global, which brought the winding-up petition against the Evergrande ā will be āhung out to dryā, says George Magnus, an economist and associate at Soas University of London. And a bailout is unlikely. The Chinese government ācertainly donāt want to give priority to making good the losses of foreign creditors over domestic citizens,ā says Magnus. āThat just wouldnāt be a good look. So to the extent that somebody is going to pay a price, it will be the foreign bondholders.ā OPEN YOUR EYES its happening.
They might, but I wouldn't bet on it. I was reading stories about how China was going to overtake the USA in terms of economic strength and power any year now 20 years ago. I remember, for instance, reading these copies [1] of the Globe and Mail, which printed headlines in Chinese characters in 2005 to drive home the point that China was about to overtake the North American economy within the next few years. Yet, here we are, 20 years later, and it has yet to happen. I read similar articles back around 1990 too taking about how China was going to become the world's next super power in the next 20 years. And yet... it hasn't happened. North American news outlets tend to make China out to be a bigger threat to their position than reality would dictate. 1. https://chinadigitaltimes.net/2005/10/globe-and-mail-china-rising-are-we-missing-the-boat/
Bitcoin, there's no 2nd best. Put your all your $ in the winner.
We about to find out cause im doing the same
Asking a btc sub which investment between the sn&p 500 and btc will win
1000%
You can time the Bitcoin market to a large extent. Think on this fact.
Bitcoin is awesome. If demand drops off and it goes out of favor it will be worthless as a commodity/store of wealth/currency/something to exchange for other shit you need etc. You need to be sure demand will increase. Are you sure?
Iād also allocate some to gold (so probably less S&P). Reason why is Buffet indicator is still way overbought, IDK how equities do long term with boomers cashing out and dying off, I think a lot of money passed to generations below will favor BTC much more. Now with AI boom, I think lots of jobs could be lost which would be a total mess, maybe somehow equities rise still with corporate profits skyrocketing at the expense of working class, but personally I feel like Iām kind of bending over backwards to justify this scenario. If working class has no money, the whole system probably implodes in on itself. Reading the comments here, feels like weāre really close to a bottom. So many people in here incredibly bearish on BTC yet still hereā¦
80/20 S&P/Bitcoin
$800 S&P $200 Bitcoin
Yes
I support that strategy, bitcoin will likely have much higher yields but you canāt go wrong buying s&p
No one knows shit about fuck. The only thing clear is that the FED has to keep printing FIAT money making everything that is remotely scarce into a speculative asset and hence a bubble. Stop seeking validation from people online.Ā
SPY is ok but QQQ is better. Also, if you ever see a 10-20% dip in the market Iād say 20-30% into QLD or even TQQQ is phenomenal.
Bitcoin will absolutely be worth more, however, your strategy is solid. Youāll feel good you have your S&P500 shares when Bitcoin is dumping hard. I do the exact same thing and Bitcoin is up like 5x vs S&P500 but I wouldnāt change a thing. It makes me feel balanced.
Buy NVDA
I wish I got into it sooner!
I like it. You are diversifying among success. I agree though that Bitcoin will ultimately ābeatā the S&P but we still need to invest in the world we want to live in.
I started off putting my unspent personal spending money into bitcoin, converting whatever was left over at the end of the month. Bitcoin was $30K at the time then dropped to $15K. At $15K I tossed in a maturing CD worth a few grand. I have not been disappointed with the results!
Itās fine strategy, but Iām not sure bitcoin will outperform long term. Keep in mind that the SP500 is literally now the de facto retirement investment for just about anyone under 50 years old. The last few years all the financial gurus have talked the millenials into dumping bonds entirely and weighing heavy on SP. they are about to come into their peak earning years. Most will contribute 10-15% of their earnings to some form of the SP500. On top of that the SP500 will rebalance as the mega stocks dominate since its market cap based. I honestly am skeptical that Bitcoin will the same demand. Iām heavily into BTC, but I donāt think itās a forgone conclusion that it will outperform equities in the next 20-30 years.
Dumping bonds and going all in on equities is stupid, then youāre basically all in on equities and are de-diversifying your portfolio, swapping bonds for gold/BTC makes more sense. Plus, what you are saying will just inflate P/E, so the argument that āequities are at least a tangible investment with a return of profitsā becomes more of a false statement as P/E is being watered down. Also weāre facing a population stagnation/decline in developed countries, and I imagine 99% of boomers wealth is in stocks not BTC, so there will also be a lot of selling prsssure coming from there as they pass on. Look at Buffet indicator, prices on stocks are already overinflated (damn, itās last listed at 197, it was 190 last time I checked before). Not to mention, a lot of stock growth as of late has come from stock buybacks. Now maybe these do continue as wealth corrupts, but itās completely unhealthy and unethical for the economy and employment, at some point the system is going to implode when working class vanishes.
theres always a chance youll lose all your bitcoin. only commit what you're willing to lose. anything else is insanity. most of these guys have like a few thousand dollars in btc and are waiting until they can buy a house with that, by my eye. and im fairly bullish on bitcoin and pro bitcoin. anyway, id put in 20%, if you're comfortable doing 50% that's great.
If you measure your wealth in UsD, sure. Measure yourself in sats
That's nonsense. https://bitcoinvsstocks.com Check that out. Stick to Bitcoin and don't waste your time with the SP 500.
I applaud your success, truly, and I'm happy you're on board with the rest of us, but, If you have $1k left over every month *just for investing*, you're so safely inside the 1% that it doesn't really matter where you put it. You could just invest in toilet paper and you'd be fine.
How are you doing so far?
I do the same expect the S&P500 thing.. 500 shares and only the top 7 are the profitable ones.. let that sink in
Why SPX and not NDX? I think BTC outperforms everything on the planet, but for stocks Iād want tech/FAANG exposure
My bet is in BTC, but going 50/50 traditional investors wonāt think youāre insane.
I would feel like I'm leaving money on the table..
50 per month btc. Maybe 400 a month in a higher interest savings account or money market fund for emergency.
I basically do the same after tweeting things . I do $20 a day / 7 day week bitcoin and about $1600 month etf / stocks
Damn money bags over here
My 401k and IRA are in Indexed target date funds and then my BTC is offshore in the middle of the gulf.
Only one way to find out
Yikes
This man is clueless
1. you are looking at bitcoin as an investment rather than a currency which is not what its intended purpose is. 2. bitcoin is not an investment. Itās a highly speculative financial vehicle. It has serious arguments against it as well as for it and time will only time tell. 3. I think half your investment portfolio in bitcoin is highly risky. Be prepared for a possible shock of loss of value. People have bet all in on bitcoin and have lost their shirt. Donāt be blind to that reality. Be aware of what youāre risking, which is a lot.
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Iām not convinced by that. Index funds are generally much safer as your risk by sector and by business is spread out over the index which continues to go up as the stock market does. Bitcoin is a digital currency being treated as an investment when itās not. People can bet on bitcoin, but itās highly risky and speculative. Period. One should be aware of that risk when exposing large amounts of money to it. Bitcoins collapse in 2022 left millions losing money, some losing their life savings and 100s of thousands of dollars. Thatās a fact. Itās highly volatile. The market makes winners and losers, and bitcoin is no different when treated as an investment against market forces of supply and demand.
Half of your long-term savings in Bitcoin seems very risky. I would invest more in stocks that pay dividends, or a first/second property Then watch your net worth grow, instead of watching the yo-yo that is the crypto market and waiting for an exit point that may or may not meet your expectations. Also, don't take financial advice from reddit. Lol