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Discuss Latest WCI Blog Post: Investing in Crypto-Assets with Hedge Fund Manager, Dr. Jeff Ross

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  • Discuss Latest WCI Blog Post: Investing in Crypto-Assets with Hedge Fund Manager, Dr. Jeff Ross

    An interview with Bitcoin enthusiast Jeff Ross, where he discusses why Bitcoin is 'better money' and why he's not concerned about the recent cratering of prices.

    The post Investing in Crypto-Assets with Hedge Fund Manager, Dr. Jeff Ross appeared first on The White Coat Investor - Investing & Personal Finance for Doctors.



    Click here to view the article!
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  • #2
    Can't believe no one has commented on this one yet.

    First off, the story about the "Rich Dad plagiarism" was hilarious, actually made me laugh out loud in my car.

    To the topic at hand, I found this to be a very good podcast. I have been "anti-crypto" for many of the same reasons as Jim. It was an interesting exercise to have a discussion in the point-counterpoint style to look at bitcoin from multiple angles.

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    • #3
      Dr Ross is a relatively rational bitcoin maxi (key word relatively) and overall was a good overview of bitcoin vs crypto.

      BUT - when he said there's a 90% chance of going to 500k by 2030 or whatever, that was cringeworthy. ngl.

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      • #4
        I wish there was more pushback. Also just decided to check out his twitter... its hard to take bitcoin/crypto people seriously....

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        • #5
          Good interview. Great job asking hard questions without being a jerk. I think some of my favorite questions: “ If it is going to replace $ and it will be used as currency: 1. volatility? 2. why is it taking so long?

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          • #6
            Dr Ross obviously made no headway with his “bitcoin, not crypto” message. From today’s blog by Jim:


            it seems very obvious to me that Bitcoin is not going to be the long-term winner in the crypto space. It's too slow and too energy-intensive and does not have the functionality of later-generation cryptocurrencies. It may still be going up in price but not as much as the better cryptos are. It's going to lose eventually, so I'd get rid of it. Ethereum is doing its best to adapt to the changing environment around it. I don't think I'd necessarily drop that one yet. But you've got to be paying attention to something like a Solana or Avalanche.

            Link https://www.whitecoatinvestor.com/ho...ryptocurrency/


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            • #7
              Originally posted by Turf Doc View Post
              I wish there was more pushback. Also just decided to check out his twitter... its hard to take bitcoin/crypto people seriously....
              crypto twitter is not the place to look for seriousness lol

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              • #8
                So much for cloudy crystal balls.

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                • #9
                  Originally posted by Turf Doc View Post
                  I wish there was more pushback. Also just decided to check out his twitter... its hard to take bitcoin/crypto people seriously....
                  Crypto is either/or. Very little middle ground.

                  You either believe crypto has tremendous value because of the tech/non-fiat nature or it's complete made-up BS for suckers.

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                  • #10
                    Originally posted by Turf Doc View Post
                    I wish there was more pushback. Also just decided to check out his twitter... its hard to take bitcoin/crypto people seriously....
                    That's because you don't get it man - ur NGMI (not gonna make it) - as they say in crypto argot.

                    J/k - if you start with the maxim that 99.9999% of people in bitcoin/crypto/web3/metaverse/NFTs et al are only in it for "number go up", then it all makes sense. B/c the only way the price goes up is to shill it to others. With this in mind, it makes sense why ppl on social media are so vehement & strident in their beliefs.

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                    • #11
                      Originally posted by xraygoggles View Post

                      That's because you don't get it man - ur NGMI (not gonna make it) - as they say in crypto argot.

                      J/k - if you start with the maxim that 99.9999% of people in bitcoin/crypto/web3/metaverse/NFTs et al are only in it for "number go up", then it all makes sense. B/c the only way the price goes up is to shill it to others. With this in mind, it makes sense why ppl on social media are so vehement & strident in their beliefs.
                      Lol.

                      I agree with him that *if* bitcoin is still in use, as time goes on it will be more valuable (i.e. worth inflated dollars which really says more about the dollars than bitcoin) than it is now and that maybe it is deflationary in nature rather than inflationary like fiat currency. But my problem is - who compares bitcoin to fiat currency? I would never just save my money in US dollars or some other currency and assume that was how I was going to be wealthy, I would invest it in real assets like stocks, bonds and real estate. So really we should be comparing bitcoin to these other asset classes, and of course I expect those to outpace inflation. And he said as much himself - he thinks bitcoin can replace needing to invest and you can just be a saver without needing to invest.

                      I totally see the utility of using bitcoin to send money anonymously, without the need for banks, decentralization etc, but I don't see how even with those benefits it means its a smart idea to just hold bitcoin in cold storage. I feel like people mix up its utility as a tool with its worth as a speculative investment. And even with its utility as a tool, i predict that at least 95% of people will never have any actual need to use bitcoin.

                      And again, with the volatility that bitcoin has, i don't see how we can even begin to discuss its worth as an investment simply because people cannot handle that kind of volatility. People have a hard time holding US stocks of companies that they actually use every single day, in a market with a 100+ year track record of ~10% returns, when it goes down even 20-30%, and we're to advise people start holding bitcoin to any degree that actually matters? Come on....

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                      • #12
                        Originally posted by Turf Doc View Post

                        I agree with him that *if* bitcoin is still in use, as time goes on it will be more valuable….. and we're to advise people start holding bitcoin to any degree that actually matters? Come on....
                        we pretty much agree. I’ve said before it doesn’t go sideways forever relative to USD. Long term it goes to zero or it goes up.

                        so it really just boils down to the *if* part

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                        • #13
                          This was definitely an interesting and enjoyable podcast. Jeff Ross made some interesting points and was level headed.

                          I think one of his points was totally inconsistent.
                          He talked about how Bitcoin will be available as an option at the point of sale, just like credit cards are an option, by the end of this year. He mentioned, starbucks, mcdonald's etc.
                          He also acknowledged that taxation is a major issue in that each purchase would be a taxable event. He then mentioned that eventually it will be recharacterized as a currency by the end of the decade.

                          Bro, how do you do reconcile end of the year with the end of the decade?
                          Otherwise, I'm going to be generating a taxable event every time I buy my Pumpkin Spice Latte this Fall. You kind of need both conditions for it to be a viable currency.
                          What would the IRS do if all PSL purchases were made with btc?


                          Also, I listened to it on Podcasts, so i didn't see facial expression. I could only imagine how WCI was chomping at the bit to go into attack mode, but he held back (lol). For example when he asked the question, " How do you decide if you're short or long btc"? I was cracking up. It's framing a question about market timing for an asset that can't be valued consistently with any measure. But Ross's answer was decent.

                          Also, Ross mentioned that the more someone owns btc, the more comfortable and confident they become with it. I think he is describing the endowment bias/effect. This isn't a positive, it's a flaw. One of our behavioral biases that hurts us. Valuing an asset we own as worth more than it's market value (just because we own it).


                          Last edited by HM7; 05-22-2022, 09:51 AM.

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                          • #14
                            Originally posted by HM7 View Post

                            I think one of his points was totally inconsistent.
                            He talked about how Bitcoin will be available as an option at the point of sale, just like credit cards are an option, by the end of this year. He mentioned, starbucks, mcdonald's etc.
                            He also acknowledged that taxation is a major issue in that each purchase would be a taxable event. He then mentioned that eventually it will be recharacterized as a currency by the end of the decade.
                            I'm not sure I see the inconsistency. Jim asked a direct question about the use of bitcoin for transactions:
                            But I feel like in the beginning, the idea was that it was a currency, a currency we'd actually be using in our day-to-day lives. And over the last decade-plus, that hasn't really panned out. I'm still not using Bitcoin as currency. I'm not buying gas with it. I'm not buying pizza with it. I'm not using it to move money around between my accounts. Why aren't we yet using Bitcoin as currency? What happened? How could so many people be so wrong about that?


                            Which Jeff answered, and pointed out that progress is being made, including integration into POS terminals, so the foundation for easy and convenient day to day use is being built.
                            And its just reality that the current rules in the US are such that disposal of bitcoin at a net gain or loss is a taxable event. As far as that changing within the decade, well that's a wild guess. I will say that there are a few politicians that have discussed legislation to make small transactions not taxable, but I wouldn't hold my breath waiting for that.

                            If you use the same platform to buy bitcoin and spend/sell bitcoin, they will do the gain/loss tracking and reporting for you. There are people that do this. You can even get like a debit card tied to the functionality.

                            There are also platforms that allow payment using the bitcoin network - ie not using visa or mastercard or amex or discover - which involve the spender purchasing bitcoin with fiat, bitcoin transferring to the spendee, and the spendee has the option to receive payment in bitcoin, or instant convert to fiat. So there is no taxable gain/loss transaction. The merchant can avoid CC processing fees and they don't have to have exposure to bitcoin the asset if they don't want.

                            And maybe it will come as a shock to some, but there are people out there who exchange their bitcoin for goods and services and don't report those transactions to the IRS.

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                            • #15
                              The taxes is the real hang up for me and I don’t see why the government would ever change the tax rules. Could someone provide a reason? Jeff throws out a random prediction but doesn’t elaborate further. Why would the government change this rule?

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