Bitcoin is still early

[The White Coat Investor]

you miss the point
No one is expressing an opinion that municipal bond funds are going to zero, that they’re a Ponzi scheme, that they have no value.

If there is anyone that wants the other side of that but I will happily take that one as well

Nor is anyone expressing an opinion that muni bonds will grow to the sky and/or change our entire economic system. They're boring. Not worth talking about. Not worth betting on. Similar to most good, long-term investments. Like index funds. Like an income property.

That's the point. When your investing becomes exciting enough to offer bets on, you'll usually discover you're just gambling/speculating, not actually investing.

[xraygoggles]

No one is expressing an opinion that municipal bond funds are going to zero, that they’re a Ponzi scheme, that they have no value.

You can think that:

1) BTC (& all of crypto) is a Ponzi/pyramid scheme & still
2) buy them for speculation.

That's all I do. I'm a profit maxi.

[G]

I follow this thread, but rarely comment. Both of you --Jim and Jaco-- make valid points and in a sense, you're talking past each other.

BTW, I happen to own a tiny bit of the bitcoin "derivative" ...I won't be DCAing there since I'm much more excited about everything else. Plus, there is a big art sale coming up--I'm curious to see how that market looks. (I think I know the answer: too rich for me.)

[jacoavlu]

Nor is anyone expressing an opinion that muni bonds will grow to the sky and/or change our entire economic system. They're boring. Not worth talking about. Not worth betting on. Similar to most good, long-term investments. Like index funds. Like an income property.

That's the point. When your investing becomes exciting enough to offer bets on, you'll usually discover you're just gambling/speculating, not actually investing.

you still miss the point

the point isn’t that it’s exciting to bet on the price of anything. I certainly never expressed this.

small wagers with proceeds to charity is just a way to engage with someone who express a strong opinion or a certainty

[Tim]

you miss the point

my response was to someone who has chosen to invest 3% of their portfolio in a derivative of bitcoin (gbtc) and is talking about bitcoin being “on sale” and “missing out”

so the point I’m making is 1) if you believe bitcoin has some place in your portfolio then there is no good reason not to simply buy and hold bitcoin directly, as opposed to some derivative which has woefully underperformed bitcoin

and 2) if you’re changing your allocations because of price or macro or fomo then you should probably step back, slow down, reset

I believe in your points. My point of view is What Is an Accredited Investor?
An accredited investor is an individual or a business entity that is allowed to trade securities that may not be registered with financial authorities. They are entitled to this privileged access by satisfying at least one requirement regarding their income, net worth, asset size, governance status, or professional experience.

Crypto's and the professional expertise of knowledge made the amateurs ripe for picking mostly due to the lack of regulation (which was the fundamental idea). Most don't put in the 200 hours of study nor the time to monitor the market to play the game. You have never said its not high risk, easy or for amateurs. Many thought they were competent and pay tuition. Most of your posts are simply pointing out your view about false confidence in the level of expertise, never once have you once indicated a recommendation that crypto in any for is needed. You have actually pointed out one needs to put the time in. Hat tip for the warnings as well.

[SpacemanSpiff12]

sorry to break it to you but gbtc is a shitcoin

anyone with conviction is buying. Same as we were buying at 69k or whatever it was. And 59k and 49k and 29k lol. Just like I was and still am buying VTI and VXUS.

i see no reason to approach bitcoin any differently than the rest of your financial life.

If you want to invest in Bitcoin, I think GBTC could work as a medium-term investment. I'd welcome hearing reasons that my rationale is wrong.

GBTC is currently trading at a 31% discount to NAV. Grayscale is actively working to convert to an ETF, going as far as retaining a former US solicitor general and suing the SEC to make their case. The conversation was recently denied, but they appear committed to make the transition.

If/when they convert to an ETF, the discount to NAV is expected to quickly close. If it takes 10+ years for this conversion to happen then any advantage of the discount will be eaten away by the outrageous 2% expense ratio, but it seems unlikely that a spot ETF wouldn't be approved within a decade. It's also possible, albeit unlikely, that the trust would allow Reg M redemptions or simply liquidate, at which point the bitcoin would get distributed at value.

GBTC is also one of the only Bitcoin options for non-self-directed IRAs.

In the long-term I agree that buying Bitcoin directly and taking self-custody makes the most sense - NYKNYC and all - but I think GBTC could make sense for some.

[jacoavlu]

If you want to invest in Bitcoin, I think GBTC could work as a medium-term investment. I'd welcome hearing reasons that my rationale is wrong.

GBTC is currently trading at a 31% discount to NAV. Grayscale is actively working to convert to an ETF, going as far as retaining a former US solicitor general and suing the SEC to make their case. The conversation was recently denied, but they appear committed to make the transition.

If/when they convert to an ETF, the discount to NAV is expected to quickly close. If it takes 10+ years for this conversion to happen then any advantage of the discount will be eaten away by the outrageous 2% expense ratio, but it seems unlikely that a spot ETF wouldn't be approved within a decade. It's also possible, albeit unlikely, that the trust would allow Reg M redemptions or simply liquidate, at which point the bitcoin would get distributed at value.

GBTC is also one of the only Bitcoin options for non-self-directed IRAs.

In the long-term I agree that buying Bitcoin directly and taking self-custody makes the most sense - NYKNYC and all - but I think GBTC could make sense for some.

grayscale has little incentive to actually see a conversation to ETF through. They earn their 2% fee on the NAV despite the discount. Their “efforts” might be entirely for show.

it’s just a lazy way to get some quasi exposure. Buying microstrategy and or a basket of mining stocks could arguably be better than gbtc because of the fee and the misaligned incentives.

Part of the ethos of bitcoin is practicing some self responsibility. It’s not hard to buy and hold bitcoin. Using a collaborative custody platform is a good middle ground for someone that’s not yet ready to go the full self custody route.

[SpacemanSpiff12]

grayscale has little incentive to actually see a conversation to ETF through. They earn their 2% fee on the NAV despite the discount. Their “efforts” might be entirely for show.

it’s just a lazy way to get some quasi exposure. Buying microstrategy and or a basket of mining stocks could arguably be better than gbtc because of the fee and the misaligned incentives.

Part of the ethos of bitcoin is practicing some self responsibility. It’s not hard to buy and hold bitcoin. Using a collaborative custody platform is a good middle ground for someone that’s not yet ready to go the full self custody route.

Regarding incentives, if they cut their ER from 2% to 0.5% but attract 8X the investment base because they're the first spot ETF, they'd double their income. It's impossible to know how hard they're really trying, but their efforts seem to be in good faith. They recruited thousands of testimonials from consumers, hired legitimate lawyers, are filing a lawsuit, etc.

I don't think self-custody is for everyone. At least not right now. Setting up a Ledger wallet and transferring Bitcoin from Coinbase Pro wasn't hard, but I don't think my parents or non-tech friends could do it. For a newcomer looking to buy a small amount, I think it makes sense to just keep it parked on FTX or Coinbase.

You didn't mention the discount to NAV... at some point you have to agree it's compelling, and I think 30+% is pretty compelling.

[jacoavlu]

Regarding incentives, if they cut their ER from 2% to 0.5% but attract 8X the investment base because they're the first spot ETF, they'd double their income. It's impossible to know how hard they're really trying, but their efforts seem to be in good faith. They recruited thousands of testimonials from consumers, hired legitimate lawyers, are filing a lawsuit, etc.

I don't think self-custody is for everyone. At least not right now. Setting up a Ledger wallet and transferring Bitcoin from Coinbase Pro wasn't hard, but I don't think my parents or non-tech friends could do it. For a newcomer looking to buy a small amount, I think it makes sense to just keep it parked on FTX or Coinbase.

You didn't mention the discount to NAV... at some point you have to agree it's compelling, and I think 30+% is pretty compelling.

I don’t have a lot of insight into gbtc. I don’t own it. I certainly would not buy it for speculation on the possibility of etf conversion and the discount closing. Not interested.

im not trying to convince my parents or anyone in my circle to buy bitcoin. I use bitcoin and mine bitcoin and hold bitcoin because I think it has value as a non sovereign, decentralized, permissionless money. If someone has an interest I’ll talk about it. That’s uncommon for me irl

[The White Coat Investor]

you still miss the point

the point isn’t that it’s exciting to bet on the price of anything. I certainly never expressed this.

small wagers with proceeds to charity is just a way to engage with someone who express a strong opinion or a certainty

You're still here talking about it. This thread is now 191 pages long. Why do you think that is? Could it be that perhaps BTC is fun to talk about and exciting to own and think about it? Naaahh, that couldn't be it.

You might say you don't think this is exciting, but every day you come back here and post on this thread once or twice. The actions are revealing. It's no longer just an investment, it's a lifestyle!

[jacoavlu]

You're still here talking about it. This thread is now 191 pages long. Why do you think that is? Could it be that perhaps BTC is fun to talk about and exciting to own and think about it? Naaahh, that couldn't be it.

You might say you don't think this is exciting, but every day you come back here and post on this thread once or twice. The actions are revealing. It's no longer just an investment, it's a lifestyle!

for those in the crowd you might see that Jim isn’t really interested in honest engagement on the topic. But I sense some fomo. I am not surprised. I might behave the same if I had receipts railing against the asset since 20x ago.

[The White Coat Investor]

for those in the crowd you might see that Jim isn’t really interested in honest engagement on the topic. But I sense some fomo. I am not surprised. I might behave the same if I had receipts railing against the asset since 20x ago.

Oh we're going ad hominem now are we. Is it the 70% loss that I'm afraid of missing out on? FOMO is what you should have accused me of 6 months ago, but seems like a silly accusation at this point. If I had FOMO about not buying BTC in 2017, I could go rectify that "mistake" right now.

Justify your gambling habit however you like. But don't blame me for it.

[jacoavlu]

Oh we're going ad hominem now are we. Is it the 70% loss that I'm afraid of missing out on? FOMO is what you should have accused me of 6 months ago, but seems like a silly accusation at this point. If I had FOMO about not buying BTC in 2017, I could go rectify that "mistake" right now.

Justify your gambling habit however you like. But don't blame me for it.

Jim you resorted to commenting regarding frequency of posting on the bitcoin thread. Which of course has no relevance to the actual asset and which isn’t really that frequent de novo in my case. I will for sure admit I spend too much time here. I’ve taken breaks for a time only to wander back. I was a mod at one time but stepped away because it wasn’t healthy. Make fun of me for it if you like. As far as this thread I tend to respond to others’ posts, such as yours, rather than coming here to get others to discuss bitcoin. I think the frequency of crypto related posts on your blog seems to have increased too

if you have a disagreement with anything I’ve posted you are free to respond specifically and I’m happy to engage

[xraygoggles]

Another record high CPI print, & BTC flat today.

It's quite evident at this point that bitcoin may be a hedge against monetary inflation - ie: liquidity, easy money, "money printer go brrrrr" (but the jury is still out on this) - but it's certainly NOT a hedge against price inflation.

[jacoavlu]

Another record high CPI print, & BTC flat today.

It's quite evident at this point that bitcoin may be a hedge against monetary inflation - ie: liquidity, easy money, "money printer go brrrrr" (but the jury is still out on this) - but it's certainly NOT a hedge against price inflation.

it’s up 4% compared to when I went to bed last night. And of course equities were down today. But it doesn’t matter. All “bitcoin is __ “ analogies are pretty much meaningless. I like to say “bitcoin is just money” but even that breaks down. Nobody knows nothing.