By Dr. James M. Dahle, WCI Founder
Many doctors, including some white coat investors, buy cryptocurrency. Most of them readily admit they are simply speculating with a tiny percentage of their portfolio. It is essentially play-money for them. In fact, I have gotten into lengthy arguments with some of them only to discover they had less than 1% of their portfolio invested in crypto. I roll my eyes and walk away.
If they believed in it half as much as they say, they'd put their money where their mouth is. You can invest 1% of your portfolio into anything you want, whether it is your favorite stock, a cryptocurrency, the Brooklyn Bridge, a Nigerian scam, or your brother-in-law's new business, and you'll be just fine. Go have fun! In fact, many financial advisors have found giving their clients up to 5% of the portfolio to play with helps them to stay the course with the rest of the portfolio, which is more than enough to reach their financial goals.
But let's explore this idea a little more. Knowing what we know about cryptocurrency and its volatility, should you invest in it?
What to Consider Before Investing in Cryptocurrency
If you are considering investing real, serious money into cryptocurrency, I think you need to spend some serious time thinking about it. Ask yourself why you want to invest in it. If you cannot make a clear, logical case for it improving your portfolio performance, then I would suggest you stick with play-money type amounts. Do you need to take on that sort of volatility and risk of permanent loss of capital to reach your financial goals?
The vast majority of physicians willing to save 20% or more of their gross income and work full-time as a doc for 20 or 30 years can simply invest in boring old index funds, enjoy a very comfortable retirement, and leave millions to their heirs or a favorite charity. Before taking on the speculative risk that investing in cryptocurrency entails, you may wish to take on additional market risk and maybe even some leverage risk.
Investing is about reaching your financial goals while taking on the least amount of risk possible. It's a single-player game: you against your goals. It doesn't matter if someone else has a better return than you or whether you beat the market, much less whether you have the best thing to brag about at the next cocktail party. Yes, some people have become fabulously wealthy speculating in cryptocurrency. But plenty of investors have also lost tons of money, and far more people have become wealthy in the long run by following a reasonable investing plan that involves stocks, bonds, and real estate.
The main question one must answer before investing in a given cryptocurrency is whether it will go up in value between when you buy and when you sell. Unlike a company, a bond, or a property, there is no way to value a cryptocurrency, so there is no way to know when it is a good deal to buy and a good deal to sell. It is purely speculative. It's a guess. There is a price at which a Bitcoin is a good deal. There is also a price at which it is not a good deal. However, I don't know what either of those prices are. Neither do you. Neither does anyone else. How much of your nest egg do you want to bet on your guess?
Why I Don't Invest in Cryptocurrency
I do not invest in cryptocurrency and have no plans to do so going forward. I have been accused over the years of not understanding it. The argument goes, “If you only understood it, you would not only invest in it but beg your entire audience to do so as well.” Honestly, it's the same thing the whole life insurance salespeople say. I assure you that I understand it enough to make a decision of whether to invest in it. Here are the reasons I do not personally invest in cryptocurrency.
Cryptocurrency Is Too Speculative
Unlike stocks, bonds, and real estate, cryptocurrencies produce nothing. No earnings, no interest, no rents. I don't invest in any speculative assets (empty land, commodities, gold, or Beanie Babies). If the only way for me to make money on something is to sell it to someone willing to pay more for it, I'm not buying it with serious money. I just don't invest that way. Yes, every investment has some element of speculation in it, but if that is the primary element, I'm not interested.
Cryptocurrency Is Too, Too Volatile
After investing through four bear markets, I have a pretty good handle on my risk tolerance. I can lose 75% or so of an asset class and 50% or so of my portfolio before I stop sleeping at night. Cryptocurrency is simply too volatile for me as an investor. Too many cryptos have lost 90%+. Fifty percent drops are routine (sort of like when Bitcoin dropped 40.4% in a 44-day span in the spring of 2022). I don't have diamond hands or an iron stomach.
My Wife Won't Let Me
Even if I wanted to invest in cryptocurrencies, my wife wouldn't let me. We work together in our financial lives, and that has been a major key to our success. No way am I going to jeopardize that just so I can brag on my blog about a 10,000% return on the newest cryptocurrency.
Cryptocurrency Is Too Easily Manipulated
There is too much hidden behind the scenes and in the protocols for my taste. If a tweet from one person can move an asset 20% or if an investment becomes a popular subject on the wallstreetbets subreddit, I'm not interested.
Too Many Bad Characters
Cryptocurrency is the Wild West of the investment world. Thus, it attracts a lot of unsavory characters. I don't get my excitement from my investments. That comes from other aspects of my life. If I have to spend any time at all wondering if I'm getting scammed, that's not for me. Just look at the history of various cryptocurrencies. At least half of them involve a scam or scammer.
Don't Need to Take on That Risk
We've already reached all of our financial goals. We simply do not need to take on risk like that inherent in cryptocurrencies. Maybe if we did and we struck it big, we could leave a little more to charity. But that's about it. We already have more than we will ever need and more than we want to leave to our children.
So, if I'm answering my own question at the top of this article—Should I invest in cryptocurrency?—the answer is going to be a resounding no. But if you want to take a little piece of your portfolio and see if you can take it for a ride to the moon, have at it. Just make sure you can afford to lose everything you invest in crypto, because there's a chance that most or all of it could be gone faster than you can believe.
Have you invested in cryptocurrency? What was your experience like? Did you make a bunch of money, or did you lose your shirt? Comment below!
I think cryptocurrencies are finally starting to be seen as really an asset of the future. Not a day goes by in the financial markets without discussion of cryptocurrency news/events…so for example crypto news portals recently wrote about a meeting between the president of El Salvador and the head of Binance CZ exchange…That’s a big event! El Salvador is already mining bitcoin on energy from volcanoes, think about those words!
You’re clearly a fan, especially given the website you’re promoting with this comment.
Couldn’t you agree that equity markets are just as easy to manipulate as bitcoin? I mean all the fed chair has to do is wear the wrong tie at the next FOMC press conference and valuations tank and that’s not even including actual interest rate manipulation.
And the “bad character” comment is very confusing. You realize bitcoin is not a corporation nor has an owner. It’s open source. The whole point is removing trust as much as possible from financial relationships. The scams only happen on poorly vetted exchanges. It’s really just counter party risk due to not keeping personal custody or improperly doing so.
No, I’d say it’s much less easy to manipulate. Is there no manipulation? Of course not.
It’s a bit of a circular argument that scams only happen on poorly vetted exchanges. When a scam shows up, you then call the exchange poorly vetted. Many scams have occurred on some of the most “vetted” and popular exchanges over the years.
Sure, but let me rephrase then. There has never been a scam associated with the Btc network. The monetization process would stop and the asset would surely cease to exist at that point if proven infallible.
I totally agree! Don’t throw the kitchen sink at it. I always recommend to interested friends and family to do 1-5% but I first ask to just buy 50 bucks worth of btc before anything. You will have a difficult time understanding the risks and uses of this asset if you don’t have skin in the game. 5% rule works for traditional assets but I think 1-5% is OK given the short term volatility. I would just like to add that so many new entrants like to go right into the next best speculative project. 99.9% are scams, empty promises or projects that will inevitably fail like most venture endeavors. If you don’t own and feel comfortable with bitcoin then you def shouldn’t be purchasing crap coin projects unless it’s just another lottery ticket for you. Just my 2 satoshies.
I have a basket of crypto at a website that sells “buckets” of assets divided into “blue chips” (the top ten by market share), the “Metaverse” and “Web 3.0”. It’s play money. Currently it’s down 25%…
I bought and traded some Bitcoin during the pandemic and doubled my gambling stake. Having sold it all in 2021, I just paid taxes on the capital gains.
My effective tax rate was 22.7% this year and the crypto added to my income and my contributions to the IRS.
Due to a bit of poor planning (too little withholding), I owed as much in federal taxes as I made as a resident in 1990-91 and 1991-2. Usually, I get enough extra taken off my W2 income to offset my 1099 income, but I guess I worked too much and took out too little and I sold my JEEP for more than I had depreciated it to.
I was a bit distracted as this is my last year of full time practice and I’ll soon join the ranks of the “pretty much retired”. The feeling of writing a huge check to the “gubment” will never be repeated at this level in my life again. I hope.
It’s also the last year I will have been able to max out a 401, 457, SEP, and HSA.
I think of crypto as a gamble and a game, but I know people who mine it and make $30,000 a month after their $10,000 power bill.
I’ve never met anyone with more than 5% of their portfolio in crypto.
Looks like my biggest monthly expense in retirement will be health insurance from age 58 to 65.
I just started mining btc myself. It’s great seeing the fixed income coming in. Better returns than real estate for sure and a lot less capital intensive to start. Obviously more risk of course but the return makes it balanced IMO. At current network status and btc $ value the hardware pays itself off in 1.5 years. Life of the hardware is around 5 years. Last time I checked IRR was currently around 20-30% if I hold the assets till obsolescence. Better IRR if I sell the hardware 3-4 years in but the variables change daily.
Interesting angle to go in on the production side. Don’t know many doing that. Keep us informed of how it goes.
The other interesting aspect of mining is that one can bonus depreciate the mining equipment. That also increases the ROI.
There’s plenty out there with more than 5%. 50% I’ve seen in people with some money. 100% I’ve seen in people that don’t have much money. In fact, I’ve talked a bunch of Bitcoin fanatics into investing MORE in Bitcoin after they spent days telling me how awesome it was only to then reveal they only had 1% in it.
However, there is someone on the forum right now with 1500 crypto transactions last year and a huge tax mess sorting it out. All the usual investing recommendations apply in this space too like diversification and simplicity etc.
I had about 80 transactions in Bitcoin, Ethereum, and Solana. I used a website called Koinly to upload all the transactions via a linkage. It then turned out the appropriate Schedule D form with all the transactions, losses, and gains and I sent them to my accountant.
I use only one exchange (Coinbase Pro) and the Koinly report cost me $49. On my taxes, the accountant simplified the 80 transactions as “Coinbase – various” and listed the $8124 capital gain for 2021.
For the bulk of the year, I waited about six months for my 0.5 Bitcoin to go back up from losing half its value. I traded my last 0.5 coin near a prior top at $62,000. It promptly tanked to about $30,000. After six months or so, it came back up to the mid 60’s and I sold it at $63,000 ( a few thousand too early). That particular money was tied up for six months to earn $500. Not worth the sphincter tone but it was “play money”. I just wanted my $8000 stake back.
Overall, I like the idea of keeping to one or two coins and just buying them and holding them. My crypto expert friend gifted me about $5 of each of fifteen coins. I left them all at Coinbase. They are now worth about $400 (800% gain as a group). They may be a pain to sell, but at least I know my basis (ZERO).
Full disclosure: Put less than 1% into crypto, but did it early enough that it’s now 5% of my portfolio.
I set up a self-directed Roth IRA to handle my crypto “investment” because I was leery of the tax implications and I didn’t want to do all the record keeping and reporting that crypto trading would entail.
Nice. Glad it worked out well for you.
Jim,
Two most important points in your post that’s convincing enough not to jump into buying such investments.
1. Do you understand it?
No. Especially about what it’s real value is. Even if is in limited supply, why should it be valued at X? Also, can 1 bitcoin be broken down into multiple fractions of 100s or 1000 parts, like a stock split? If so, does it still hold the tag of being a scarce resource?
2. Do I need it in my portfolio to be financially independent or retire early/comfortably?
Like you mentioned, If not investing in crypto doesn’t affect your path to FI or RE, why bother?
Bitcoin, not “crypto”
I’m a physician who’s been in the bitcoin space a long time. I’m taking an MSc degree in Blockchain and Digital Currency, one semester left. I’ve made a lot of money buying and holding bitcoin. I’m watching this space mature and work out it’s kinks. James, there is more to learn on the nature of money; especially sound and unsound. For the last 100 years we moved away from and then totally disconnected from sound money (gold was a form of sound money). Since 1971, we’ve been basing our society on unsound (fiat) money. Things are clearly going to hell in a handbasket as a result. Bitcoin is a seminal invention, digital scarcity. The first, best, and possibly only real use of digital scarcity is as sound digital money that is sorely needed in our modern world. It has enormous potential to restore economic rationality for 8 billion humans.
I would encourage all physicians to do a deep dive into whatever aspect of bitcoin they find most interesting at swanbitcoin.com/canon.
I would also encourage all White Coat Investors to read two reports from Fidelity; Getting Off Zero and Bitcoin First. They can be found here:
https://www.fidelitydigitalassets.com/bin-public/060_www_fidelity_com/documents/FDAS/Getting-Off-Zero.pdf
https://www.fidelitydigitalassets.com/bin-public/060_www_fidelity_com/documents/FDAS/bitcoin-first.pdf
James, I love your blog, have read all your books and agree with you 99% of the time. On bitcoin, you’re wrong. Every physician will buy bitcoin at some point, either now, or once their other investments have all tanked. Save yourself, your family and your portfolio with a 5% allocation to bitcoin.
99% is better than most of my readers.
Maybe your crystal ball isn’t as cloudy as the rest of ours. Given your confidence, I’m curious how much of your portfolio is in Bitcoin.
Started investing with money found in the couch cushions, over the last 8 years at CAGR of 170% it’s become significant.
Please don’t trust me; do your own research at Fidelity. Articles referenced above. They’re as mainstream as it gets and they find a portfolio with a small allocation to bitcoin will increase returns while DECREASING risk.
Significant is in the eye of the beholder, but it would take returns like that to get couch cushion money to something significant in my life. $5 x 170% x 8 years = $8,303. Some people pay that much to have their taxes prepared.
Crystal ball clears with intensive study but it’s not easy. In the bitcoin space we call it ‘proof of work’. For an exercise, try to find a someone with 1000 hours of learning bitcoin between books, articles, podcasts, meeting who doesn’t believe in it.
Confirmation bias is one of the most robust biases
Good point I’ve worried about deluding myself! Please help me by rebutting the Fidelity reports. Those are some pretty serious investors not ‘crypto-bros’.
Why would someone spend 1000 hours on something if they didn’t believe in it already? People change religions with 1% of that much time put into it.
James, a blog post idea: analysis and rebuttal of the Fidelity reports I mentioned. Let’s get into some good old fashioned searching for the truth here. Would love to hear your counter.
Why do you care? You’ve made your decision. Ask yourself why it is so important to you that I agree with you on this point?
How you personally feel about it and whether you invest in it is not my concern (I suspect you’ll be fine either way). And again, I have mad respect for you and what you’ve done for the white coat investor community. But I worry that your message to physicians about bitcoin is somewhat incomplete, and in ways, inaccurate. You lump it with crypto and there are multiple profound differences. And also, Bitcoin as an asset class has matured much more than you give it credit. I think you, me and all physicians have much more to learn about how Bitcoin will change the world, and I want all to be prepared. My call is just for all of us to increase our understanding and knowledge about money.
You don’t think other readers have the ability to do what you’ve done and do their own research and form their own opinions? To take what they find useful from me and leave what they do not? I think you need a little more faith in your peers.
So how much money do you have in crypto and what % of your portfolio is it?
James, posting that kind of information (amount and percentage of portfolio, which also gives total portfolio value) in an open Internet forum is completely terrible opsec in Bitcoin (it is a bearer asset), an action I think you’d agree inadvisable for your readers; and actually a bit of a rude question. I’ve obviously touched a nerve with you and I aplologize if I’ve pissed you off. I certainly think my colleagues are highly intelligent and discerning. I wanted to highlight for them some sources I’ve found valuable in my own search for the truth; the interested ones will read the Fidelity reports and discuss with their advisors. I have enough bitcoin to make me want to understand it at a deep level. I have no ‘crypto’. I have a deep enough belief in bitcoin to believe it will eventually touch every person on this planet, and I wanted to encourage my colleagues to learn about it early in its adoption phase. If you’d like to discuss offline I’m more than willing; you have my email.
Let’s just hear the percentage of overall portfolio. That gives away no useful personal information.
Ok, that’s reasonable. How about 45% of the portfolio is bitcoin. 95% of that value is capital gains. Take that for what you will about my commitment (or over-commitment) to Bitcoin. My wife and I have always looked at that money as a flier, and we’ll be fine if it goes to $0 tomorrow. I’m not sure how this knowledge about me will make the Fidelity reports more or less credible to you. I sincerely hope you’ll read them as they significantly affected my view of Bitcoin as a maturing asset worthy of physicians investment.
Re opsec, I’m using AN email. I am using a VPN (and always do; we all should in my view).
If half your portfolio is bitcoin, when do you plan to sell? If you’re okay with half your net worth vanishing, why not de-risk some and put the money into some relatively stable assets?
Well, you’re certainly a believer at 45%. You’ve definitely put your money where your mouth is.
I’m surprised you view 45% of your portfolio as okay to take a flier on though. I don’t have that kind of risk tolerance. I definitely would not be okay losing 45% of my portfolio permanently. But perhaps my portfolio is a lot larger than yours if you got 45% of your portfolio from couch cushion money that did well. For example, it’s a lot easier to take a flier on $45K than $4.5 million. The first you can make up with a little extra moonlighting. The second might mean the kids don’t get an inheritance.
I’m surprised you’re using your real email if you’re so concerned about Opsec. I certainly wouldn’t have guessed that was a real email address. In fact, you could use a VPN to hide your IP address if you really cared.
It’s fine if you don’t want to say, but it certainly makes all your talk a little less believable. I mean, how hard is it to say “7% of portfolio, a low six figure amount.” Or “75% of portfolio, a 4 figure amount.”
Here, I’ll go first. I have 0% in crypto, a $0 amount. 🙂 Okay, maybe more relevant, 20% of my portfolio in bonds, a 7 figure amount.
By the way, Bitcoin is definitely a cryptoasset. It doesn’t take 1000 hours of learning to understand that.
The rabbit hole is very deep, folks. You can see from my numbers that we invested at most 5% of our portfolio into bitcoin; 95% of the value of it now is capital gains. We just agreed to let it run; we’ve just enjoyed the ride, but along the way we’ve developed a deep conviction that one of the foundational pillars of our global society, money, is fundamentally broken. This goes back to the decoupling from gold and the emergence of a pure ‘fiat’ system. I have made bitcoin a hobby over the past 8 years and I can promise you there is so much more there. Return to a hard-money standard will have enormous implications for mankind.
Yes, James, bitcoin is a ‘cryptoasset’, but that really just scratches the surface. Though it was I ‘flier’ when I first invested, it’s so much more to me now. It’s also pristine collateral, freedom money for billions of unbanked, marginalized people living on less than $10/day, an arbiter of truth, an ender of endless wars, a controller of out-of-control governments, a defanger of nation-state over-reach, a revealer of secrets. It is the SOLUTION to climate change and energy insufficiency. Only a deep dive down the rabbit hole will help you understand why I believe it is these things and more. That’s why I posit that much time is needed to fully understand this phenomenon.
GK, when will I sell? I don’t know, I’m still enjoying working and adding to the stack. Maybe when I need to spend some. When should one sell an asset with a 170% CAGR and the highest Sharpe ratio ever seen? It’s going to the next generation mostly. The suggestion of selling at all reveals that you’re thinking of it as a Lego brick in an investing stack where the goal is to create more dollars rather than a new form of money. I denominate my life in Bitcoin now. If I wake up with more bitcoin than i had the day before, I’m wealthier regardless of the current USD-BTC exchange rate. When you believe in it like I do, you see it as safer than bonds and believe it will one day subsume a giant chunk of the bond market. It will also likely engulf all of the value in overbuilt real estate (presently used for ‘investment’ purposes only). You know those houses, condos, apartments sitting empty while young people can’t afford a place to live? Bitcoin fixes that.
To understand bitcoin fully you have to dive deep; I stand by my 1000 hour estimate.
I’ve gotta run to my workout but will re-engage later this evening. I love talking bitcoin!
Well, if you believe your investment will end war and “reveal secrets” I certainly am not going to change your mind about it. I don’t doubt that you love talking about it and will likely leave many more lengthy comments on this thread.
Good luck. I sincerely hope it works out well for you to have 45% of your money in Bitcoin.
Wow, it’s going to end wars. Bitcoin is the missing link!
Human nature has been quarreling and warring for millennia; but bitcoin is going to change all that. It will change human nature (only the bad part).
I’ll go buy some now. Do I need a cold wallet or hot wallet or hot pockets? Can one of you guys let me know.
Totally willing to let you guys ridicule some of my more hyperbolic statements if it motivates just the slightest bit of curiosity in you.
It’s pretty hard to take you seriously while you’re making them I’ll admit.
Sorry Ty. Just having a little fun. Didn’t mean to make it seem like it was ridicule.
On a positive note, I do like your excitement and your willingness to stick your neck out for something you believe in.
I read both of those articles with interest. The evidence from 0% BTC to not-0% BTC is interesting. The second article, about currency, I found less compelling, because they seem to have disregarded a characteristic of currency which Dr. Dahle has called about before about cryptocurrency: stability. If I leave in the morning to buy a car and, by the time I get to the dealership, I need more money to buy it, that’s not a great currency. I’ve heard the same thing happens in hyperinflation- leave the house with a shopping cart full of marks and, when you get the store, you need two shopping carts. I’m not a currency guy- I’m just a vet- but it seems like the second article only talked about the upside and didn’t address this downside, at least.
I find it useful to use crypto to generate massive capital losses without the wash sale rules. They were supposed to get rid of this loophole in last years BBB legislation that died.
Other uses include 20% yield on stablecoins and an asset that can be borrowed against using DeFi loans. Interesting applications of NFTs also that generate income like virtual real estate.
So your favorite use of the asset is to lose money? 🙂
TLHing is like a consolation price; I’d rather never have to do it.
No its more massive losses on paper due to not having to deal with wash sale rules. Crypto is fairly volatile so these opportunities arise pretty frequently. It’s the same idea of roboadvisors (e.g. wealthfront) harvesting losses on long term stock holdings during volatile movements. There is no similar service on any of the crypto chains currently so has to be done manually.
Of course I dont advocate doing this on alt coins that will eventually go to zero. Safe bet is to do this on BTC or ETC.
I have the same criticism of it as I do the roboadvisors. How useful are losses to you? An extra $100K in losses isn’t ever going to help me unless I sell WCI. Sure, the first $3K a year is pretty handy. If you’re selling something you can use some more but after a while, additional tax losses aren’t very valuable. I wouldn’t do anything extra to get them. A bear market every 3-5 years seems to be more than enough opportunity to have more tax losses than most will ever use.
Cant speak for anyone else but I found it useful to offset 150k in capital gains last year and extra to carryforward for future tax planning opportunities. 3k per year against income is not what I find to be valuable.
I just think it gives the option to redeploy capital to what I think is the best and highest use. If i didnt have losses, would probably donate highly appreciated assets in a donor advised fund or borrow against it at low rates.
What were the gains from? I just have gains like that so rarely. I don’t think I’ve realized $150K in gains in my life so far.
Or have you had the gains and just flushed them out by donating to charity?
You know what the word realized means, right? If I donate to charity, the charity realizes the gains (by selling the shares), they just don’t have to pay on them. I’ve had plenty of gains, I just either still have them or gave those shares away.
No need to insult my intelligence. I never said you realized the gains, In fact I never even said “realized”, just implied you have had gains (either unrealized or realized). Using tax loss harvesting to offset realized gains has the same net effect of donating appreciated shares to charity and although it does not apply to your situation, I’m sure there are plenty that actively use it to achieve their financial goals.
Sorry if that came across insulting. It was actually intended exactly as it was written. There’s a large part of my audience that doesn’t know what realized means when referring to capital gains. I used the word earlier, then you responded to that, so that’s what I was referring to.
But yes, anyone who is realizing significant gains as part of their financial plan can use tax losses and probably a lot of them. But I would propose that MANY people who are really thinking about this never realize significant gains. Think about it. Let’s do a hypothetical.
Let’s say some retiree has been saving for 30 years and investing in stocks. Maybe he donates the most appreciated shares to charity from time to time. Tax loss harvests every now and then. Then gets to retirement. Needs 4% to live.
The portfolio is kicking off 2%, maybe 3% in income. So there’s 2-3% of the 4% needed. Capital losses aren’t going to help there. Now where does the rest cone from? It comes from selling he shares he bought within the last few years. So perhaps only 10% of their value is gain. And even that may be offset by tax losses. Even well into retirement the shares being sold are still probably 50-75% basis. All those shares bought in the first half of the career (and perhaps TLHed) are NEVER sold, and the heirs get them with a step up in basis at death.
I’m just saying tax losses aren’t nearly as useful as those selling tax loss harvesting services would like you to believe.
I get what you are saying regarding income from your investments partially covering the 4% withdrawal rate needed in retirement, but you are not accounting for asset location. If you retire at 60 and are looking to minimize income in order to finally perform Roth conversions after spending that majority of your career in higher tax brackets, then you might end up disproportionally withdrawing from your taxable account until you start taking social security and RMDs. This results in you burning through your taxable account much faster than you suggest. For simplicity’s sake, say your taxable account (50% of total portfolio) is 100% in VTSAX with a 1.34% dividend yield, then you are only getting 0.67% of the 4% you need from income in the taxable and will need to obtain the other 3.33%/yr from selling securities in your taxable account (6.66%/yr of your taxable account). If you are planning on doing this for 10-12 years in retirement, you can easily burn through a significant portion of your higher-cost basis shares (maybe even your entire taxable account) and will be glad that you have all those tax losses stored up. And that’s not even considering using those tax losses to offset selling a practice or real estate associated with a practice/business at the time of retirement.
Does any of this justify investing in a volatile asset for the sole purpose of TLH or paying for TLH services? No, but I think you are underappreciating how much benefit tax losses can serve even average investors in this community.
That’s a good counterargument. It IS usually best to spend first from the taxable account, but if that’s relatively small, you could end up selling even the low basis stuff.
But no, you still shouldn’t let the tax tail wag the investment dog.
Doctors are NOTORIOUS investors so I would listen to James before anyone else at this site. Sadly too many MDs think they are smarter than the markets; especially in stock investing
Agree Ken, don’t trust any individual including me, the vaunted leader of this site, or anyone. It takes a lot of learning for something as new, groundbreaking and awesome as Bitcoin. DYOR
Interesting post.
I’m not sure what the future holds.
Crypto “investing” seems to be more about opinions, beliefs, and speculation than anything else. How do I value it? What is the discounted cash flow?
I suspect BTC and Crypto and Blockchain are here to stay and lots of money will continue to be made.
On the other hand, there is a lot I don’t understand. Many doctors are in that boat.
Most physicians make a generous income and can fortunately afford to invest prudently and conservatively with a reasonable return.
They can live well and build wealth without needing to take speculative risks.
Crypto… no thank you! We definitely avoid it considering every couple of days there seems to be news of massive theft from hacks, even from so-called “Stable Coins”!
I was a little surprised to recently hear Paula Pant on your podcast say she only has “play money” in crypto, considering on her own podcast she is pretty passionate about crypto’s future. Of course, play money is all relative especially since I presume that she has very high net worth with her successful businesses.
Here’s some thoughts from an early career doc about my crypto journey in case you’re interested to see why one of your readers is into crypto. I am a diehard WCI follower for years so I follow your philosophies (living like resident, simplicity, low cost index funds). I don’t even buy individual stocks so crypto is basically the polar opposite of the WCI way. After paying off student loans and maxing out accounts, I began building my taxable account but also looked into other areas to branch out. Real estate seemed like the next stage but getting bombarded by expensive real estate courses like Passive Income MD and syndications was a major turnoff. Plus sometimes the real estate community almost feels just as scammy as the crypto scene, which is honestly a true hive of scum and villainy.
I became interested in crypto obviously for its history of very high returns but there are a couple factors that prompted me to take more risk instead of sticking with my usual index funds. One is I have to support my parents with my W-2 income. They are immigrants and do not have anything substantial in terms of retirement accounts. I am happy to do it for cultural reasons and for what they sacrificed to support the family, but realistically this is a major drag on personal wealth building. Second is getting illusioned with medicine in the past couple years and trying to achieve FI more quickly. I am hoping with a 5-10 year time frame, crypto will help to achieve my financial goals.
Last year during the bull market I started setting up exchange accounts and buying small amounts to get used to the environment (prior to this the only thing I bought was mutual funds so didn’t know any of the basics like limit orders, etc). This led to a lot of additional crypto-specific and financial education besides the usual topics that WCI usually covers. Once the crypto market crashed mid 2021 I started to buy more heavily. Currently crypto is about 15% of my total investment portfolio and accounts for about 50% of my weekly/monthly investments, with the rest going into my taxable account mutual funds.
In the past year I’ve been fine tuning my approach but basically I focus on the blue chips (bitcoin and Eth with a much lower percentage in altcoins), dollar cost average weekly, and earn interest by staking/lending. Getting 5-10+% interest on what is theoretically an appreciating asset is one of the most appealing parts about crypto to me.
So you feel that you do need the returns that might come from gambling on crypto in order to meet your goals? I’m sorry to hear that. I’m glad I’m not in that position but I suppose it’s probably not all that uncommon, even in the WCI audience.
15% and growing huh. Where do you plan to stop if you’re putting in 50% of savings?
Agree with you about the hype in real estate.
Awesome Charlotte make sure to read the Bitcoin First report from Fidelity. You’ll be out of ‘crypto’ soon enough. Bitcoin is the only investable asset at this point. All should have some. Get off zero.
Fascinating reading the answers on this one. Sadly or fortunately, I’m with Buffett on this one. His BRK.B is my largest single stock holding at 5.5%, although BRK.B is like a mutual fund to me, full of recession proof value plays in an uncertain world.
So, my largest single holding is Buffett at 5.5%. My Bitcoin holdings have never been above about 1.5% and are currently at a tiny 0.25%, having dropped off markedly. That means I am about 22 times more comfortable with WarrenCoin? I’m not sure how to quantify that. Like WCI says, you vote with your asset allocation.
I am 58 and retiring this year, so my risk tolerance is not the same as a 30 something. If I were 30 and had a 30 year horizon, I might consider buying half a Bitcoin and keeping it in case any of the Bitcoin bulls are right about it going to $100,000 or more per coin after the next halving. The trouble is that at 30 years old, my wife and I owed $120,000 in student loans and I had a negative net worth. At that time, I could not scrape together $25,000 to buy a vacant lot in Florida on a canal… that land is now worth $250,000.
A half a Bitcoin now costs about $20,000. If you gave Warren that $20,000 in 1992 and kept it for the last 30 years…you might have some Bitcoin like returns.
I own a bunch of different index funds. Some of the underlying companies own crypto. That’s plenty of crypto exposure for me.
The market has spoken James. You lost this battle a long time ago. You don’t need to invest in Bitcoin or Crypto. No one cares if you understand it or not.
The market cap is sitting at about 2 trillion for the entire asset class. Maybe you want to wait until it is 5, 10 or 20 trillion. But eventually, by just being exposed to any index fund, you will have a big exposure to crypto.
But you keep investing in negative yielding bonds that are melting like icecubes.
Interesting criticism from a proponent of an asset that is down 27% over the last year. If bonds are melting like ice cubes I’m not sure how to describe Bitcoin’s recent performance.
If the market is speaking on this topic, it doesn’t seem to be saying what you think it’s saying.
But thanks for stopping in with your anonymous comment. Care to tell us how much money you have in Bitcoin? The last guy wasn’t even willing to tell us how many digits in his number.
Wow–usually, I have to light a political fuse on Facebook to get such passionate responses! FWIW, I’m a 57 yo doc who is just dipping my toe in a crypto fund (on Yieldstreet) with a very small percentage of our assets. I consider it a “big swing with a little money”, consistent with other investments in things like a family/personal real estate development, art, cannabis investing, etc., that together are only 5-10% of our portfolio. And I do this only because I feel confident that the remaining 90-95% of our portfolio that we’ve patiently saved and invested in stocks/bonds/real estate over the last 25 years will provide enough for retirement. Everyone gets their “juice” in different ways and this is ours–but our main portfolio still provides our safety belt. FWIW.
To be honest, this article reflects a very un-informed and a closed-mined outlook (thinking in-the-box) which seems exactly opposite to the philosophy of this website.
My background: I have been in clinical dental care all my life. Started getting frustrated and looking for different avenues to earn money. Attended a short crypto training course in Jan 2022, researched a lot and then started investing in Crypto. Since then, I have consistently made profits month after month. Currently 10% of my portfolio is in crypto and am planning to increase it to 25% within the next year. In my opinion, people who have been referred to as having less than 1% of their portfolio in crypto, most likely do not understand the space at all and have gotten into it because someone else told them to get into it.
Disclaimer: My experience in this field is less than 6 months. I wish I had long term data to back my claims, but I am confident that my claims will be the same a few years from now, based on the results I have achieved and the research I do on a daily basis in this field. The comments are not investment advise in any way and everyone should do their own research before investing in any avenues.
Here is a brief critique of the article. I urge the author not to take my comments personally but take it as a way to get more informed about the space. The goal here is to learn from each other with the goal of getting better than our previous selves and not let our ego get the worst out of us. Let us help each other to be financially free and make decisions based on unbiased information. Whether to invest in these avenues or not, is finally a personal choice. To be clear, like any other investment, crypto can be very risky if you dont know what you are doing. So, do adequate research before doing any investments.
The author says:
“Cryptocurrency Is Too Speculative”.
So are stocks. Cryto appears to be speculative presently because the general perception is that there is no tangible product that someone is buying/selling. However, this is just a perception. Please read about Blockchain technology and its future applications to get a more detailed understanding of the technology rather than just concentrating on cryptocurrency buying/selling which is just one small aspect of Decentralized finance. You will understand that the speculativeness is unfounded and there is an actual tangible product at the back end.
“Unlike stocks, bonds, and real estate, cryptocurrencies produce nothing. No earnings, no interest, no rents.”:
Please read about Crypto Lending, Liquidity pools, and Yield Farming. The most passive way to earn is crypto mining. Read about Helium mining that can generate an easy passive income of an average of $400 a month for installing a $550 miner (the device is as big as a wireless router) and a radio antenna in your house. Electricity cost is just a few dollars a month. Also read about mining gaming tokens that only need an idle GPU or sometimes only a CPU which we all have at our homes or workplaces. Infact we have lots of idle CPUs in our clinics that can generate passive income when not being used with minimal setups and minimal periodic interventions.
“If the only way for me to make money on something is to sell it to someone willing to pay more for it, I’m not buying it with serious money. I just don’t invest that way.”:
This is how the economy works my friend. You have something to sell and someone is willing to buy it whether it be your clinical skills, stocks or a virtual asset such as crypto. Problem is people are yet to wrap their minds around the perceived mentality of not having a tangible product to buy or sell. Hence the appearance of speculation.
“Cryptocurrency Is Too, Too Volatile”
Thats true. However, volatility is the biggest reason that I make consistent profits every month. I buy low and sell higher (roughly 2 transactions per month per currency will yield at least 10% monthly, I emphasize, MONTHLY return not annual return). Additionally, because of the volatality, decentralized platforms offer staking/yield farming rewards which are insanely high (the reward pools I invest in generate a consistent 60%-100% annual yield).
“Too many cryptos have lost 90%+. Fifty percent drops are routine. I don’t have diamond hands or an iron stomach.”
Like any other investment strategy, for crypto as well one needs to f***ing know what they are doing. Read about Stop Loss orders and why they are important. This is are very similar to stocks.
“My Wife Won’t Let Me”
No comments on personal issues.
Cryptocurrency Is Too Easily Manipulated
The stock market is the same.
Too Many Bad Characters
Again, one needs to know where to invest and when to invest and how much to invest.
Concluding remarks: Dont take the comments personally. Have an open mind, learn from others and be better than your previous self then help others get better than their previous selves.
Bottom line: Nothing I write will ever convince a “Bitcoin Bro” to do anything different. Maybe I should put a disclaimer at the top of the articles that anyone who “researches crypto daily” should not read any further because they won’t like what it says.
Sorry you hate dentistry so much that you felt gambling with crypto was a better option. I suggest you have an open mind, learn from those who hit FI before becoming frustrated with their chosen career, and be better than your previous self to help others get better than their previous selves.
Hope your bets pay off. It’s beyond me why you’re limiting your stake to 10% of your portfolio on something you feel is such a sure bet that it’s worth leaving a comment like this on a post like this. I suspect you have some lingering doubts in the back of your mind that perhaps you were just lucky over the last year or so. I think you’re right to have those doubts.
Great article Jim and great comments. I characterize myself in a “believer” in blockchain, not necessarily crypto. Unfortunately it really is like a religion, and just as productive in terms of discussion.
I have huge doubts in long term viability so I limit my exposure. I view my investment as long term “currency and financial infrastructure insurance”
My philosophy has been to hedge my bets so to speak, meaning to have enough exposure in Bitcoin to keep my relative net worth if for some reason the Bitcoin maxis are right and Bitcoin takes over the world. For example in the extreme and highly highly unlikely case that Bitcoin replaces the dollar as a reserve currency I have the same proportion of Bitcoin to maintain net worth.
My other insurance bet is that blockchain replaces the rails of the financial system at some point. The current system is archaic in terms of speed and processing time. The goal of the market currently is to “clear” transactions in 2 days. With blockchain that has the potential to go down to 2 seconds. Gary Gingsler, the head of sec, has spoken favorably of this. Unfortunately those 2 days and the associated fees are extremely profitable for a lot of main stream institutions so I am not holding my breath that this will happen with out government intervention. And if the government forces the change it is highly unlikely they will concede control to a decentralized blockchain. Most likely if transactions are cleared on a blockchain it will be a centralized one in control of some government entity. We will benefit by cheaper transaction fees and faster clearance times but most likely not benefit by being holders of the native blockchains currency . There are a few blockchains that have a shot with good government connections that I have a small position on.
It’s a very small cost as insurance against a very small risk. This aligns with my risk tolerance, just like insurance money for cars or house it’s a sunk cost.
That sounds entirely too reasonable. You sure you’re a crypto investor? 🙂
I agree with you that the almost religious belief in it is a huge turn-off. The “crypto missionaries” stop by this website almost every day.
Knew from the title that there’d be >50 comments…
I’ve had >10% of my portfolio in crypto at one point. Currently with zero percent.
Long time reader of the blog and at this point believe moving forward any similar articles should be a pro/con post with two authors. I think you’ve posted similar calls that nobody’s answered so understand if you can’t find anybody…I can nominate Sanket Nagarkar or TY to start.
I can’t get a single person to submit a single pro article on crypto. The crypto bros don’t want to actually go through the trouble to put their own ideas out there especially under their own name. They just want to snipe at mine anonymously in the comments section.
Jim,
Love your site, your message, and believe you’ve had an enormous positive impact on the finances of your target audience. I’m incredibly grateful for everything I’ve learned from you, and recommend your site and books often whenever personal finance comes up in conversation.
I also believe that your attitude towards cryptocurrency comes off as unnecessarily antagonistic, and while you may have a superficial understanding of the asset class, you haven’t put in the time or energy to really delve deeper into the real and theoretical benefits of this transformative technology.
To echo another’s comments, there is Bitcoin… then everything else, with regards to cryptocurrency. I’m invested in Bitcoin, as well as a number of other cryptocurrencies, but they are completely different animals, with their risk being an order of magnitude apart (bitcoin being much less risky than others).
Bitcoin is digital gold, or digital energy, as Michael Saylor likes to say. It is a way to preserve your time and energy, by working and producing money, across time and space. But going from analog to digital is not a linear, but exponential improvement, and Bitcoin is an exponential improvement on gold as sound money.
Why sound money? To quote Satoshi Nakomoto (the creator of Bitcoin), “The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.”
Look at the M1 money supply graph (https://fred.stlouisfed.org/series/M1SL) and tell me there’s not a problem! When you are saving your money in USD, the most stable of fiat currencies, everytime the Fed prints billions or trillions of dollars, your savings and thus your time and energy, are being debased. Every other fiat currency basically has the same problem, except worse (see Venezuela, Turkey, etc.)
The majority of your readers are high income professionals in Western democracies. That is not the case for billions of people on this planet, who struggle without access to basic financial services, experience high inflation, or live under authoritarian regimes. Bitcoin is a way forward for many of these people who don’t share our financial priveledge, providing access to sovereign money which they can take across borders without fear of confiscation, which they can use to send or receive remittances to family without losing huge percentages to fees (see Western Union), or where they can save money with access to a smart phone when they don’t have access to a bank account, and not worry about inflation eroding their purchasing power.
I would encourage you to read some of the articles by Alex Gladstein of the Human Rights Foundation, such as https://bitcoinmagazine.com/culture/check-your-financial-privilege.
This is one of the best introductions to Bitcoin in the context of the history of money, older but still holds up well: https://vijayboyapati.medium.com/the-bullish-case-for-bitcoin-6ecc8bdecc1.
And finally, ignoring the tongue in cheek title, is also an excellent article, and I believe more or less encompasses a lot of the reasons why many of your readership have dismissed Bitcoin and cryptocurrency: https://www.citadel21.com/why-the-yuppie-elite-dismiss-bitcoin.
As for common criticisms, there have been so many articles written addressing these, however this one by Fidelity is a good starter: https://www.fidelitydigitalassets.com/articles/addressing-bitcoin-criticisms.
I don’t expect you to actually read these for yourself. After all, like you’ve mentioned in the past, you have your financial plan, you’ve been incredibly successful, and have already achieved all of your financial goals without any crypto allocation.
However, I sincerely hope for the sake of your readership, that you actually do delve more deeply into the topic for a few reasons. One, it is super fascinating! It’s a rabbit hole, and there is a plethora of great information out there waiting to be consumed. Two, cryptocurrency, but particularly Bitcoin, has matured greatly as an asset class. You still talk about it as if it is an extremely niche multi-million dollar penny stock, however it is a multi-trillion dollar asset class, who’s ownership is skyrocketing, with a faster adoption curve than the internet.
I do not think your readers need to go all in. However, I do believe that if your readers did their due diligence, they would allocate a small position of their portfolios to Bitcoin (do not invest in other cryptocurrencies unless you are passionate about the asset class and can keep up to date with the rapidly evolving field) as a long term hold. I think that it can and should replace a significant portion of negative real yielding bonds in most people’s portfolios. A small (1-10%) position with incredible asymmetric upside is a smart bet!
As for skin in the game, I am not most of your readers. I first learned about Bitcoin in college, and first bought some, as well as mining equipment, in medical school with borrowed money from my parents (no income). When I first “went down the rabbit hole”, I came away with a deep conviction that this COULD be the future reserve currency of the world, not a guarantee, but a possibility. As time has gone on, I believe that probability has increased exponentially. Fortune 500 companies, hedge funds, sitting members of Congress, Ivy League endowments, and even a nation-state (El-Salvador) etc. all hold Bitcoin. My small investment has grown to be the majority of my portfolio, with my miners effectively dollar-cost averaging the cost of electricity into Bitcoin over the years. I have maxed out Roth IRAs for my spouse and I throughout residency in traditional broad market index funds, and own no individual stocks. However my initial investment in cryptocurrency has become low to mid 6 figures, and within the past couple of years has outgrown my traditional investments. That may sound like a small amount to you, however as a trainee, it is as much money as I’ve earned in my short career. While I could rebalance into more traditional investments, I’m happy to continue to hold my gains, and will be continuing to invest into both cryptocurrency and traditional investments as an attending.
For your readers, the risk-adjusted return for Bitcoin has never been better. When I initially bought in years ago, any number of things could have gone wrong for Bitcoin to fail. But it has now, as a trillion dollar asset (at all time high, currently below this), I believe achieved enough network and Lindy effect, that the tail risk of going to zero is nearly non-existant. It is the most powerful computer network in the world, a trillion dollar honey pot that has never been hacked (the network itself, not individuals or exchanges who fall prey to phishing scams, etc.). It is a true sovereign money, backed by math and code rather than repeatedly broken trust of governments, and a way to protect yourself from the continued debasement of the USD and other fiat currencies, as the US tries to inflate away its 140% debt to GDP ratio.
Jim is right, that most of you don’t NEED Bitcoin to meet your financial goals, at least now. But most of you already own some Bitcoin, as by owning the broad market, you own parts of publicly traded companies which hold Bitcoin on their balance sheet (see MSTR, TSLA, SQ, etc.), and this will likely increase over time. Why not “get off zero” on your own balance sheet, spend some time learning about an interesting topic at the intersection of finance, technology, and geopolitics, and put a small percentage of your portfolio into this new asset class. Almost everyone who actually puts in the time to learn about Bitcoin, increases their allocation.
Jim, I sincerely thank you for your contributions to my own personal finances, as well as those of other high income professionals. I hope you can take some time, maybe winding down from a heli-skiing or backpacking trip, to truly put in some continuing financial education on this new asset class, so you can give a more informed opinion to your readers. Yes, scams abound, and most (but not all) crypto is noise… however Bitcoin is true signal. I would encourage you to invite someone knowledgeable on the topic to discuss it from first principles and how it can help your audience on your podcast. May I suggest Preston Pysh of The Investors Podcast, a former military officer and value/Buffet investor turned Bitcoin proponent, or Michael Saylor, CEO and founder of the publicly traded company Microstrategy, who after going down the rabbit hole, has become one of the largest Bitcoin holders in the world.
I’m sure this comment will get buried, and Jim, you probably won’t read any of those articles, but if this gets even one of your readers to learn more about Bitcoin, and make a small allocation, then I will consider that a success. Get off zero, and enjoy the journey!
Love,
A bitcoin bro, crypto missionary, and burnt out resident, excited to finally get paid more than $15/hour after 10 years of post-undergrad training.
Congrats on the great success you have had. One thing to be cognizant of is that if you have a huge amount of your portfolio in crypto it might be wise to diversify out. I have done some reading that makes me wonder about the integrity of the “pipelines” from the cryptoverse back to the real world. The problem is that it is pretty easy to get money into bitcoin, but getting it out might not be so easy.
Say you have $500K in bitcoin. As bitcoin, it is pretty useless; there isn’t a lot of useful stuff you can spend it on, so it isn’t really functioning as a “currency”. The only way to recognize the gains is to sell it on an exchange and take the proceeds off the exchange as fiat. The integrity of that process and the “stability” of stablecoins is where the big questions lie. The problem that will arise is when stocks/bonds/real estate start crashing and people holding lots of money in crypto decide all at once that they need to turn it into cash. It is very unclear that the “pipes” from crypto exchanges back to the real world are of sufficient diameter and integrity to handle large-scale sales and withdrawals of cash. If there is a panic in crypto-world and people have big problems getting money off the exchanges, the perceived value of bitcoin could plummet. It might recover after a while, but you never know.
I became sufficiently worried about that scenario that I cashed out about 2/3 of my crypto and (as I look at the markets starting to turn) I wonder if removing a good chunk of the rest might be a good idea. Since you have done so phenomenally well, I would encourage you to take some profits; as they say, nobody ever went broke taking a profit.
Pevend,
I appreciate the advice and concern. My perspective is that I think there is a high probability that bitcoin will be worth considerably more in a decade than now, and that I have a limited opportunity to invest my rapidly depreciating USD at a “bargain”, particularly while on a resident salary.
I don’t place on needing to sell my cryptocurrency at any time in the near future. I still have a sizeable investment, low six figures, in “traditional” assets, which is respectable for my career (late residency, prior to first attending job). Any excess money I have been able to invest for the past couple of years, I have put into crypto, as I would like to buy it as low as possible, and I view the time opportunity cost as too great (would rather invest a small amount now, then a larger amount as an attending in 2 years). As an attending, I plan to invest into both crypto and traditional assets, albeit at a higher asset allocation than most peopl here are likely comfortable with. However, I plan on saving a large amount of my income overall, and if crypto ends up not panning out, should still be able to retire comfortably on my traditional investments, just not as early as planned if crypto ends up being successful.
With regards to the hypothetical situation of a broad market crash (see COVID crash), bitcoin and crypto would likely crash as well due to a total market liquidity crisis, however I think as bitcoin continues to grow, particularly among institutional investors, it will be seen more as an inflation hedge and risk-off asset, vs it’s current high correlation with risk-on assets like tech stocks. Obviously, that’s not a certainty, and many here likely think that is improbable, but that’s where I think it is going in the long term after hundreds of hours of research.
In addition, fiat currency has the real problem of not being able to withdraw it in turmoil. See Ukranians who had to flee their country in neighboring countries, without access to their bank accounts. See Russians who were unable to withdraw cash when the Ruble initially crashed, and are barred from exchanging into USD to avoid rapid currency devaluation. These are real world examples of the problems with censorable, centralized fiat currency. Bitcoin, as a decentralized protocol, cannot be censured, and even if attempted to be stopped (which I believe is highly unlikely in the US), can only be stopped at regulated institutions. There is always peer to peer decentralized protocols which can be used to exchange as long as there are buyers and sellers. It is also a nearly trillion dollar asset, with immense liquidity, which can easily absorb billion dollar orders. Obviously that won’t stop a ton of people selling, but as you said, that doesn’t stop the same from happening in stocks, bonds, real estate, etc. so why does it matter if bitcoin drops in a crash as well? To me, it is a long term hold, similar to my stock portfolio, which I don’t plan to touch until retirement.
I also think it is easier to spend and use bitcoin than you may know, learn about the Lightning network, and I routinely use bitcoin rails to purchase gift cards (Instacart, Amazon, Doordash, etc.) at a 5-10% discount on sites such as Bitrefill, using Strike, an app on my phone which allows me to spend USD from my bank account as an ACH transfer, convert instantly to bitcoin lightning network, and is final cash settlement, anywhere in the world, within seconds, for less than a penny fee (this can also be done to send payments to others, with basically no fee, across the world, without a trusted third party). I can also do this through my Rasperry Pi bitcoin node which runs at my home, runs the lightning network, and I can control through my phone, requiring no third party, allowing me to confirm that my transactions are valid with no trusted third party.
I would encourage you to learn more about bitcoin, and reconsider your thesis after that. It sounds like you bought something you did not have a firm understanding of, and may be why you have sold “early”. However, if after more education you still do not feel comfortable with the asset, then no problem! There are no called shots in investing as Jim likes to say, and I’m sure you will have great financial success without bitcoin.
Cheers,
R
While getting cash in a crisis can be tough, is it really any tougher than finding somewhere that you can spend Bitcoin for essentials? None of the places I routinely spend money take Bitcoin. Even just to buy something on Amazon you’re having to go through a work around. And even that is new since the lightning upgrade. I mean, look at all that you’re having to do just to spend it. You think average Joe can handle all that? No way. Not to mention the fact that you have to track and pay capital gains taxes every time you spend it because the IRS views it as an investment, not currency. It’s just not a useable currency yet and after 12 years, I’m starting to lose hope that it ever will be.
Lost a long reply, so had to rewrite this and apologies if it sounds jumbled. Appreciate the response Jim.
Currently, bitcoin functions mostly as a store of value, however, it is still so early, and I think over time it’s volatility will decrease, and as adoptions grows it will be used more as a medium of exchange and unit of account.
In crisis, if fleeing your country with the clothes on your back, it’s a great benefit to be able to have a digital savings account that can hold an infinite amount of wealth, with only 12 words in your head. That bitcoin, can then be used to buy either goods and services directly, or of course, exchanged for a local currency using an exchange or peer to peer. Bitcoin has deep global liquidity.
Bitcoin is also an open permissionless network, similar to the internet. As such, it has incredible apps being built on it by incredible developers around the world. Strike, which I mentioned earlier, is one such app, and actually doesn’t use bitcoin the asset, but bitcoin the network as a payment rail. It takes your USD, converts it to bitcoin, and instantly sends it anywhere in the world on the bitcoin network, and the merchant or person receiving your transfer receives either bitcoin or it is converted instantly to their local currency, with nearly no fees (sub 1 cent). This all happens within seconds, and you actually never possess bitcoin, so you don’t owe any capital gains, and Strike isn’t even exposed to bitcoin volatility, as they are converting instantly between a currency and bitcoin, and merely using it to instantly provide global final settlement. This is an order of magnitude improvement over current global payment systems. Have you tried to send an international wire recently? With lightning network, you can send money anywhere in the world, within seconds, for under a cent. The merchant doesn’t even need to use Strike the app. They can use any lightning wallet, of which there are dozens if not more, and because it’s an open interoperable network, it just works.
That cumbersome process I used to buy Amazon gift cards at a discount, really isn’t difficult, and the same as buying gift cards anywhere else. If I buy an Amazon gift card at Safeway, I need to put it in my cart, use a credit card or Apple Pay on my phone, and then use the gift card at Amazon.
The way I buy it, uses a single site or app (Bitrefill or Fold), I add the card to my shopping cart, and pay with an app (Strike, or any of a number of lightning wallets) rather than a credit card, and then I use the gift card at Amazon. It still may be a hassle to the average Joe, but 5-10% off of Amazon is nothing to sneeze at given the percent of my household spending that ends up being done at Amazon. And it’s no harder to use than buying anything on any online retailer. Easier in fact, because instead of typing in your credit card info, you just scan a QR code with your phone.
Bitcoin is also so early, it’s only 12 years old Jim! The capital gains thing is purely a political designation and doesn’t reflect the asset’s monetary properties. There is also legislation being brought to avoid capital gains for smaller bitcoin purchases. This may not pass, but it is something being actively pursued by sitting members of Congress.
Think about the internet. It was created in the 70s, and didn’t achieve mainstream adoption until the late 90s, early 2000s? Even the internet of today is unrecognizable from the internet of the 90s, let alone the 70s. Geocities websites vs Netflix/TikTok/Youtube? Pixelated text-based websites vs streaming 4k video?
David Letterman made fun of Bill Gates for embracing the internet in 1995. In 1998, Nobel prize-winning economist Paul Krugman said that the internet would have no more impact on the economy than the fax machine. Times change, technology changes, and with it so does the world.
Bitcoin is being adopted at a faster rate than the internet. It has grown from being an idea in a whitepaper, first sent between 2 people in 2009 from a Cypherpunk mailing list, to being used to buy a pizza for 10,000 bitcoin, to last year being a trillion dollar asset, with holders around the world ranging from kids in 3rd world countries, to sitting US senators, to hedge funds and some of the most valuable compaines in the world. That’s in just 12 short years.
The US dollar as we know it (fiat currency, completely off the gold standard), is about 50 years old. I can’t wait to see what bitcoin is doing at 50 years old! I believe in the math, code, and the immutable monetary policy of bitcoin, over the geriatric politicians and economists who can’t balance a budget, print trillions of dollars out of thin air, and thought that inflation would be “transitory”. Who could have possibly predicted that when you increase the money supply by 40% within a few years, inflation would become a problem? They keep kicking the can down the road, and now have dug a 140% debt to GDP ratio hole that can never be filled, except with persistent high inflation. Your money, all the time, blood, sweat, and tears, we put into our jobs to earn that money, gives us a slice of the USD pie. And everytime they print money, your slice of pie gets smaller and smaller.
Would you rather hold a million dollars of USD, gold, or bitcoin for the next 20 years? Gold may keep up with inflation (unless bitcoin takes away the majority of its monetary premium, which I believe it will). USD, guaranteed to lose a significant portion of its purchasing power (you like to talk about the effect of 1% AUM fees on a portfolio, what are the effects of 2-8% inflation on cash over 20 years?). Bitcoin, our crystal balls are cloudy, and we probably have different predictions, but I think it will have the greatest purchasing power of the 3. The beauty of real life, is you don’t have to go all in. Just replace a small portion of your negative yielding bonds with bitcoin. A 95% cash and 5% bitcoin portfolio has outperformed the stock market over the past decade.
I think that the risk adjusted return of bitcoin has never been better than it is at this point in time. Surviving the journey from zero to a trillion dollars was the hard and risky part. Now, when it has proven itself as a technology, is starting to become embraced by the political and institutional class, and before the masses pour in, is the best time to get in. I believe that sooner or later, everyone will have bitcoin exposure; I just hope that after learning more about it, it’s sooner, rather than later. You want to be towards the earlier part of the S curve of technology adoption, and not the tail end. Everyone gets in at the price they deserve, as they say.
As I mentioned in my prior comment, Jim, I really hope you take the time to read and learn a little more about bitcoin. I think it would great for you to have a bitcoiner on your podcast, to educate yourself and your audience. I think many people in your audience can benefit from a small allocation to bitcoin, as an asymmetric upside bet on the future of money, and a reasonable part of a well-balanced, diversified portfolio. Years ago, bitcoin was a crazy speculative bet, that I wouldn’t recommend to friends and family. Now though? I think it makes good financial sense to have some exposure.
There are many people more qualified than me to discuss bitcoin, and educate your audience. However, if you have trouble finding any, feel free to reach out via email, and I’d be happy to discuss it with you either personally, or on your podcast. If not, no sweat, it’s been a treat to get to “talk” to one of my financial heroes, and I will continue to recommend your material to friends, family, and colleauges. I’ll just also tell them to get some bitcoin :).
– R
Yes, that happens a lot when you write a comment longer than the original post. I find it fascinating that so many WCIers are willing to leave 1000+ word anonymous comments telling me “I just need to learn a little more” but not a single one is willing to put their name on a guest post and send it in.
I find it fascinating that you thought Bitcoin was a bad deal at < $1,000 but a great deal at $40,000. How has that technique worked out for you in other asset classes? Personally, I wouldn't hold $1,000,000 in cash, Bitcoin, or Gold for 20 years, so that's kind of a false trichotomy. I agree if your country is melting down, Bitcoin is a great way to squirrel money out of the country. But that doesn't make it a "great investment."
There is an abundance of great material in article, book, and audio formats on Bitcoin, written by people much more talented than myself. I recommended a few of them which I thought you would find interesting and relevant to this conversation in my first comment. One on how bitcoin benefits those less fortunate than us, and how we in stable western democracies are quicker to dismiss its current real-world benefits coming from a place of financial privilege (https://bitcoinmagazine.com/culture/check-your-financial-privilege). One on why people like us (successful, educated, upper-middle class to wealthy) tend to dismiss bitcoin (https://www.citadel21.com/why-the-yuppie-elite-dismiss-bitcoin). And another on the properties of money, and why bitcoin is the best form of money humans have come up with (https://vijayboyapati.medium.com/the-bullish-case-for-bitcoin-6ecc8bdecc1).
Did you read those? I don’t expect you to have in this short time frame, you’re a busy guy, but just checking in case. Have you spent greater than a few hours over the past 5 years really learning about bitcoin (I don’t mean articles written in mainstream media by people who don’t understand it because they’ve never even tried using it)? Or have most of your thoughts on the topic come from when the 2017 parabolic rise and 2018 crash, when it was decried Tulip mania and dead forever? Bubbles don’t typically repeat multiple times, each time reaching higher highs and lows? Do you know how the lightning network works? Do you know about the block size wars, which demonstrated that bitcoin is truly decentralized, and could not be altered against what the everyday users and node operators desired, despite the majority of miners and large exchanges in the world trying to do so?
Not being accusatory, but trying to understand how much reading you’ve done on the topic, and if your criticism comes from a real understanding of the topic or more so from ignorance (mean this in the nicest way possible, I know in general you are extremely intelligent, thoughtful, and well informed)? Or a prior decision that it wasn’t worth your time, and thus you weren’t going to put any significant effort into learning more about it?
Like I mentioned previously, you don’t need bitcoin! However, I think many of your readers could potentially benefit from it, particularly if it potentially aligns with their values (freedom, lack of censorship, financial inclusion, financial sovereignty, and , and I think it’s not genuine to criticize something without really understanding it.
I never said it was a bad deal at < 1k, just that it’s a better investment now at 40k. At <1k, it was an incredibly risky speculative investment. At 40k, it’s a 750 billion dollar asset class which has Lindy effect. By surviving and growing to this stage, it has been significantly de-risked. It’s also a technology network which becomes exponentially more valuable with more users, much like the internet.
Was Facebook a better investment when Mark Zuckerberg started it at Harvard, and it was only used on a single campus? Or was it a better risk adjusted return after it had spread to every college in the US, and was then opened up to the general public, but before people's parents started using it? Was Airbnb a better investment when it was an idea being rejected by VCs (no one will want to sleep in a strangers home!), or after it had proven it’s business model but before it reaches global adoption? Seems to me like the best risk adjusted return is when you’ve gotten past the extremely risky startup phase, but before it’s reached complete mainstream adoption. Similar to how bitcoin has proven to become the most powerful computer network in the world, never being hacked, with 99.99 % uptime (better than the traditional banking system and even Fedwire), and bootstrapped itself to being a trillion dollar asset starting to be adopted by institutional investors, but before 50% of people have it in their portfolios. That time is now.
I think bitcoin has less risk than a single stock/company in the long term, but just using these as example. And I know you are not an individual stock investor, neither am I! I'm just advocating that it is a perfectly reasonable thing for white coat investors to allocate a small percentage of their portfolio to it, and most importantly, learn more about the asset so they have the knowledge and conviction to weather drawdowns, and hold it long term, just like they should learn about the stock market, and have the knowledge and conviction to weather drawdowns, and hold it long term.
Finally, if you truly find it fascinating why so many of your peers are telling you they think you need to learn more when discussing this topic, maybe it's a sign to learn more? I obviously can't know this for sure, but in reading your criticisms of bitcoin, it sounds like it's coming from a place of a lack of understanding, and this is why people who do understand it, bring this point up.
At some point in the future, I’d be willing to write you a guest post on bitcoin. The ideas will largely be plagiarism from others, but I’m happy to if you really have that much trouble finding someone to write a guest post. I do however wish to remain anonymous. Happy to dox myself to you personally, but ideas should stand on their own merit, and I don’t feel the need to give out my personal information to your entire audience. Also happy to come on your podcast at some point if you’d prefer. However, I'd encourage you to talk to discuss the topic with someone more well regarded in the space if possible if it's meant to be more educational rather than just a discussion of how bitcoin and crypto have affected my own personal finances as a physician.
If you made it this far Jim, I appreciate your time, and thoughtful response, even if we don't agree on this topic. This is literally the only topic I disagree with you on, and I truly can't thank you enough for all the work you've done to improve physician personal finance. I'm glad you advocate for us, and I hope our discussion may convince you to at some point spend a little time learning a bit more.
Get off zero!
– R
I wonder if I respond that you’ll feel like you to type another 1000 words into the the internet….
How could I possibly read all of your links? I don’t even have time to read your entire comments. What do you think I do all day? And you’re one of literally hundreds of thousands of readers, many of whom want me to spend all day thinking, reading, and writing about THEIR favorite financial subject and all of whom want me to actually spend time creating real content, not just responding to comments.
Instead, today I’m doing 3 SCUBA dives. I’m not exactly trying to put in that infamous “1000 hour to understand Bitcoin here”, I read enough to make a decision for myself and moved on to the rest of my life like a rational human that feels no need to justify his investing decisions to his favorite bloggers on the internet.
Are you upset that I’ve responded and tried to have a civil conversation in good faith with you? Sorry if I hit a nerve, but this has all been coming from a good place with me, just trying to give my 2 cents and educate some of your readers and my peers. If you’re truly upset about that, then that’s honestly sad and disappointing. If you’re not, then sorry for misinterpreting.
My 1000 word response:
You seem to take time to read articles about other topics related to finance? Doesn’t seem that difficult to find time over the past couple years or the next couple years to do a little reading? I understand you wouldn’t have had time within the past few days, and said that I assumed you hadn’t had time yet. A few hours is a world of difference from a thousand, and would go a long way to having a much firmer basic grasp of the subject, before giving a relatively uninformed opinion to your hundreds of thousands of readers.
I don’t feel a need to justify myself to you. Rather give my own opinion to your readers, who are my peers, about why I think your opinion doesnt come from a place of understanding. Which it seems is justified, and that’s okay!
My offer stands to write a guest post or come on your podcast, but sounds like you don’t have any interest in that! That’s okay with me, just please don’t complain about people not trying then, because it isn’t true.
Enjoy your scuba diving! I’m glad that you have that opportunity, and wish you nothing but the best.
– R
No I’m not upset. I’m in Roatan diving. Hard to get upset here. I’m just pointing out that I’m not volunteering to spend all day “having a civil conversation” with anyone about Bitcoin because I have better things to do. I’d rather go do another dive.
Nearly every day for the last 6 months I have had someone post a lengthy comment somewhere on this blog recommending I read yet another article or watch yet another video (or two or three) about Bitcoin, all while accusing me of being “uninformed” mostly because I don’t agree with the commenter’s semi-religious belief in Bitcoin as the “ender of all wars” (no kidding, that’s what one person thought last week). Forgive me if it gets old. I’ve read many of them. It’s pretty clear most of the writers all live in the same echo chamber.
People come here for my take on personal finance. So I give my take. Most who don’t agree with my take don’t feel a need to leave a daily 1000 word comment on the site, but the Bitcoin believers seem to.
Awesome, glad you’re having a great time diving! No worries, sorry if it’s been repetitive for you, this is the first time I’ve commented, and I haven’t typically read comments on your blogs, just was interested in this topic. I’m glad you weren’t upset, and hope that if we ever meet, possibly at a future WCICON, we can shake hands and laugh/cry about how destitute or wealthy I am :P.
Civility and being able to disagree is an amazing thing; if you’ve read a fair amount and come away uninterested or thinking it’s not for you, there’s obviously no issue with that. From my perspective, some of your criticisms just come across as not correct, and that’s why I think you get these responses. We’re all intelligent people, and don’t like to think our opinions are wrong. I’m sure you feel similarly if you hear someone talking about a topic you are passionate about and think they have a misunderstanding.
It’s funny with regards to your whole life insurance comparison, I was actually thinking it was a similar comparison but from the other direction, haha!
Enjoy your vacation, and if you ever actually want a guest post or podcast guest, my email is open.
– R
There are a half dozen other posts on this site about crypto, and every one of them has a variant of this same conversation on it at least twice.
If you think I’m like some bizarre outlier in my opinions, I would suggest submitting a non-anonymous guest post and then you can take the heat from the anonymous comments gallery. You might be surprised just how many people disagree with you.
I certainly don’t think you’re bizarre or an outlier. Otherwise we wouldn’t be early :). And I agree with you on literally everything else you discuss. Don’t feel like making a guest post non-anonymous, and don’t see how that should affect the comments gallery. Thoughts and ideas are the same, whether someone knows my name and where I work and live.
The nice thing about our circumstances is that we are both going to be fine, regardless of how bitcoin does, and the future and the market will tell us who ended up being right in the long run. Since my initial (very) small allocation in 2015, the market has validated my decision with a 16,000% gain. We’ll see if that continues over the coming years.
– R
Maybe you bought in 2015. Maybe you made a 16,000% gain. Maybe you didn’t. Or maybe you’re just trolling me for kicks. That’s the problem with being anonymous on the internet. My point is that it is easy to take potshots anonymously from the comments section about how stupid a non-anonymous blogger who lives his financial life in public is. It’s much harder to put your name and your portfolio in print for people to remind you about for the next decade.
Can’t control what you choose to believe. Think I’ve presented myself as forthright, and could easily still make things up even if I put my real name out there. As a PGY-6 in a demanding final year of training, responding to these comments has taken a significant portion of my free time the past couple of days, so I hope they weren’t interpreted as trolling. It’s been a cool experience to “speak” with you after reading your blog and listening to your podcasts for all these years since I started medical school. Just a bit disappointing in that I think your overall attitude towards me, has come off defensive. I understand after hearing how much you’ve heard these same arguments, that it’s old, just was personally dissapointing to me to have my first interaction with someone I look up to come off that way. I don’t think you’re wrong to have that attitude, and empathize, that’s just my own feelings about it.
I certainly do not think I’ve been taking potshots, and absolutely do not think you are stupid! I’ve said multiple times I agree with 99% of what you write and teach. The basis for my entire financial life is the white coat investor philosophy! I just have put in considerable time and effort into learning about this new asset class, which you admittedly have read some about, and decided wasn’t for you and moved on. That’s totally reasonable and makes sense, particularly in your circumstance where you have literally zero need to take any additional risk to meet your financial goals and then some.
My initial investment is 16,000% up, however that was a very small amount, and I’ve been consistently mining and buying over the years, putting more money in the past year or two than all the prior years combined. So I have purchases that are in the red from near the all time high, and purchases that have done very well from big drawdowns in years past. I automate my purchases, and mining is a steady DCA via electricity cost. It’s been an overall great investment for me, and I know I have the risk tolerance for it, and I have conviction that the upside is worth the downside risk.
Ultimately, it doesn’t matter what you or I think, and whether you believe me or not. I know the truth of my portfolio, and you no longer give specifics aside from % of yours, presumably out of wanting a degree of privacy from the masses given your visibility online. I’ve given my %, which varies a lot based on volatility, but currently is approximately a 40/60 split stocks to crypto. Have minimal bonds given my age, risk tolerance, and belief that bonds will remain negative real yielding due to the persistent high inflation which will ultimately be needed to inflate away our countries massive debt obligations.
We’ll see what the market bears over the coming decade. Inflation is one of the greatest risks to an investor, as you often say. I just think bitcoin is the best solution to that problem, and that I will continue to be rewarded for reaching that conclusion earlier than most.
Again, appreciate everything you do. Think you’re extremely smart, hard working, and have changed the lives of your very large audience for the better. So thank you for everything you do.
– R, a proud WCI AND bitcoin advocate
Hello R, I read the links. I came away with the question: If I don’t currently invest in currency, why would I invest in Bitcoin? It seems like the articles are making an argument as to why Bitcoin will be a viable currency. But I don’t invest in any currency currently. So making the argument to invest in Bitcoin because it will be a viable currency doesn’t seem compelling to me. Also, interestingly, the Vijay table of good stores of value attributes continues not to include “stability”. I guess stability isn’t necessary for a currency? But then he uses the example of the Argentine peso as a bad currency because it isn’t stable. A lot like Bitcoin isn’t stable.
Vetducator,
I don’t invest in currency as well. In it’s current form, bitcoin is not what you would traditionally think of as a currency. It is a new type of money, and it in the process of being monetized. Ask yourself how a non-nation state decentralized currency would become the world reserve currency, and what that process would look like? It obviously can’t go from not existing to being globally adopted, with price stability, and used as a global unit of account overnight.
Naturally, there will be volatility as early investors and speculators buy and sell, with new market participants coming in. It’s volatility has actually been decreasing significantly over time, and is now more on par with tech stocks for example.
The thought process is that as adoption increases, it’s price will appreciate due to fixed supply, until eventually reaching a steady state, at which point volatility should be much lower, changing only with the change in the size of the global economy. It has no central control, only immutable issuance, and there will never be more than 21 million bitcoin, last mined around 2140.
If the bitcoin thesis plays out, it will become a currency. However, at that point, it will be a stable asset, and the only reason to have it would be as a savings vehicle. A much better savings vehicle than USD or other fiat currencies, because of it’s fixed supply, without having it’s value inflated away. There would be less need to purchase investments (what percent of most people’s portfolios are in cash?), and you would only invest money that you thought would outperform the slow appreciation of purchasing power of bitcoin.
There are a few reasons to buy it now, before that has happened. One is as an inflation hedge; it is sound money, there is a fixed supply, and your share of the bitcoin you hold can never be diluted from a denominator of 21 million. In this regard it is like digital gold. Not everyone holds gold, and I don’t either, but I think there is a much greater chance of bitcoin becoming a global reserve currency rather than gold again. The other reason is it’s asymmetric upside as a speculative investment. I think it has de-risked significantly enough that the tail risk of going to zero is extremely low, however, the upside is still tremendous.
I think a 1-5% allocation is reasonable for people first learning about it, and if you learn more and think it will succeed, than put more in. If all the S&P500 companies put 5% of their corporate balance sheets into bitcoin, it’s price would rise to $500k-1M. If a small percent of the $100+ trillion bond market goes into bitcoin, it’s more. If a portion of the wealth in real estate realizes that they can better perserve their wealth with digital value, which doesn’t have property tax, doesn’t depreciate, doesn’t need repairs, isn’t at risk of earthquake, floods, etc. and goes into bitcoin, it’s more.
“There are no called shots in investing”, and by reading this site, you will likely do fine without bitcoin. But I think it’s a reasonable thing to invest in, and a truly fascinating topic that touches on finance, geopolitics, sovereignty, math, and computer science. As we say in medicine, I think the benefits outweigh the risks. Thanks for taking the time to read those articles! If you’d like to learn more, consider reading some material from https://casebitcoin.com/, or https://www.hope.com/. The Investors Podcast has bitcoin episodes by Preston Pysch that are very good, the first episode is a great start if you prefer audio format. https://www.theinvestorspodcast.com/bitcoin-fundamentals/bitcoin-common-misconceptions-w-robert-breedlove/.
Good luck whatever you choose to do!
– R
That’s kind of my experience when I read articles. They don’t resolve my concerns. So I state my concerns. And people post links to more articles. That don’t address my concerns. So I state my concerns. And people post links to more articles. That don’t address my concerns. Around and around and around we go. The only thing I can compare it to is talking to whole life insurance agents.
The first question I ask anyone giving financial advice is “if you are so smart, why are you bothering to give advice to me?”
Crypto in general and bitcoin in particular are speculative investments. As such they are not suitable for everyone. However, they are suitable for some, as a risky investment with immense potential. These types of investment require deep study and understanding, which takes time and effort. Bitcoin and the subsequent altcoins have the potential to be transformative. Large number of very smart people are developing applications using these protocols to reformulate financial transactions as we know them, eliminating banks, credit cards, and the fees associated. I am particularly interested in the potential replacement of government issued money, especially in countries with irresponsible monetary policies(maybe even the USA). A stable, online, encrypted , universally accepted, private currency, which can be used anywhere in the world with a swipe of a cellphone has some real appeal in times of worldwide inflation. Will these things happen? What crypto will win? Can algorithmic stablecoins succeed? I don’t know the answer. However, if there is a 5% chance of a 10000 times return, it might be worth a little speculation.
I find it interesting that everyone says “these investments require a great deal of study.” That’s not necessarily true. Whether you’ve spent 1000 hours studying it before buying or not, you get the exact same returns. Maybe the more you study the more convinced you are that it will go up in the future. But to me it seems at least as likely that the more convinced you are that it will go up in the future, the more you study it.
But I agree with your point that one can get rich speculating. And other than people that have bought in the last 15 months, everyone so far that has bought and held Bitcoin has done very well.
The cryrpto market has being profitable for the pro who understand the crypto market structure. People ask themselves if this is the right time to invest? before jumping into conclusion I think you should take a look at things first and consult a professional to make quick profit in short period of time. BTC is the best cryptocurrency to make earnings due to the recent outbreak. Sometimes when we have that specific money that we want to invest in a particular thing, we always lose focus and then invest or spend the money wrongly, I almost found myself in this situation luckily for me I came across a mining pro who many had reviewed how he helped them made profit in this crypto space, I email him at digitalcurrency14 @ gmailCom He explained to me the process and we both got a deal. Somedays later I got my return on investment, I never knew I could make so huge profit in a short period of time, Digital Currency is a gem…If you’re reading this and you want to make money in this crypto space I’ll urge you to do same