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Lately I have had a bullish attitude towards Bitcoin. Historically I did not like Bitcoin as an asset class; it just didn't make sense to me personally.
This is a sentiment shared by a lot of people in "traditional finance."
Traditional Finance has really become a mush word. It doesn't really mean what is used to. Due to regulations in the US most traditional finance has stopped going to work for big investment firms; if you have an investment manager, he/she is just selling an investment product, they really have no idea how capital market actually work and where the risk is. This is largely because if you work for these firms you are not allowed to trade and if they catch you, you get fired. There is only a few big investment firms with power left, so their employees are pretty intimated and play by the rules; if you get fired when working for 1 of the big firms, the others know and it impacts your career prospects.
Most famous investment bankers left Wall Street and started PE firms a long time ago. Because of this most of "traditional finance" have gone into corporate finance for firms backed by Private Equity, that's where the action is. This trend will likely end soon as Private Equity got considerably less sophisticated in its approach over the years; they have been growing companies inefficiently off cheap debt and now those rates are no longer cheap. They don't have time to figure out how to actually run the business, they think they can just refinance and throw money at it.
Maybe they are right? Maybe they are too big to fail?
So why I am so passionate about Bitcoin? Well historically Bitcoin's Sharpe ratio was just terrible. A Sharpe ratio is essentially comparing the risk to reward on an investment. That was true until we got all this inflation across the US and massive interest rate hikes. The economy is fine right now, most debt is fixed until renewal. Big banks have an inventive not to call debt on big firms they sell bonds too because if the firm goes bankrupt, the bank loses all their principal. If banks make too many bad bets, the losses hurt their credit rating and then they have higher interest loans themselves. It can be house of cards if people are asleep at the wheel.
So now, as an investor, I really don't know what to do. I am just getting my money out of stocks and into money markets and Bitcoin. Please I am in the dark just like the rest of you so I have no idea how will end and if this will pay off. Simply put, my risk appetite has changed dramatically. I love the stock market, but the average rate of return on a diversified market portfolio is 7% overtime. If I compare it to a money market fund that is currently paying 4.5%, that just doesn't make sense to me. Why would I invest for a 7% return when I have so much downside risk? I have no idea but right now I am moving against the grain.
I am sorry if this seems a bit like a ramble. This is just where my headspace is right now. I am making a lot of interesting moves off chain. I am buying bitcoin not for me but for my descendants. Maybe I am wrong? I have to be wrong to grow, so I hedged what I am doing as much as possible.
My Hive and Hive Engine stuff is not part of the calculous; this stuff is staying on chain unless something happens to me. If something happens to me, my wife should be allowed to cash out and I hope my friends on chain would respect that decision.
This isn't necessarily a Big Short moment like when the real estate crashed. Who knows how long it will take Bitcoin to moon. I have no idea but I have lost faith in the stewards of the current economy. They need to go bankrupt to get replaced. Most of them put their money where their mouth is so they probably will; they got cocky.
That doesn't mean we need to go down with them.
It's been my experience Crypto is filled with mostly good people, it just doesn't seem that way because everyone's mistake and bad deeds are on chain for perpetuity. In the real world people lying and cheating to save their reputation and sometimes works. On chain there is evidence, and admitting you were wrong is hard. We have had some clear bad actors over the years in crypto broadly speaking, but that doesn't mean it's the rule or needs to be the norm going forward. I'm not trying to argue or be a contrarian on how we treat bad actors, I just love trying to create value and I don't see how chasing a bad actor forever makes me money or fixes anything?
Some people may read this and think I am speaking to something specific. I am not, just speaking generally. I look forward to continue to make new friends and sharing my journey on chain and on Twitter.
I am confidant we are on the other side of the hill; it just takes society a really long time for everyone to wake up to the change that happened in their lives. Bitcoin has already revolutionized the world; people just haven't noticed.
Thanks for reading my ramblings and I hope you enjoyed the spiel. I may be more afk in the coming months as I take care of getting what needs to be done on my end.
Everyone needs to do their part, I am tired of waiting, I am no longer afraid and ready to do what I think I am being called to do. That doesn't mean a more risky strategy, just a more dynamic long-term plan. I am confidant we will get through this together and I will see all my crypto friends who stayed honest on the other side.
Let's do this!
Hurt
You can find me on this blog, Discord, and Twitter! Until next time ✌️
My Blog -> https://peakd.com/@hurtlocker
Join the Hive PIZZA Guild Discord -> https://discord.com/invite/hivepizza
Follow me (@hurtlocker) on Twitter -> https://twitter.com/Hurtlocker360
What about the investment in property in your country? What is the normal ROI in the long run?
It's really a mixed bag with real estate in the US. It largely depends on where you live and how the property taxes are setup. We own some property but the value has changed largely because of inflation in my opinion. I wasn't really expecting that so now our property taxes have become an outsized burden compared to our financial plan.
At least for now there is no property tax on BTC, so I will keep buying me some BTC (:
Nice sharing! I don't think it is a bad thing to own some bitcoin too. Like all investments, don't put all the eggs in one basket and it's good to have some diversification outside of traditional investments, i.e cryptos. That's what I think!
!PIZZA
Thanks relf! To be honest my exposure to crypto has been relatively small over the years. I am making btc in particular a larger piece of my overall investment strategy. Will it work? No idea but it's been a lot of fun so far! 😁
!PIZZA
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