TheLaughingCow wrote: ↑Wed May 12, 2021 2:55 am
For those who own no crypto. Under what conditions would you consider exchanging some USD for crypto?
Edit: This is a thought experiment. The point is to challenge Bogleheads' existing beliefs. At one point bonds were considered a safe investment and common stocks were regarded as excessively risky. Yet today the family who held stocks for the last 100 years is substantially richer than the family which held bonds. I do not want to be so attached to dogma that I miss fundamental shifts in the way the world works.
There is a point at which everyone would hold crypto, Boglehead or not. For example if your salary were paid in crypto, and the dollar was worthless, you would have no choice. I am asking, at what point would you decide there is some merit to holding some crypto "just in case" it really is the next big thing?
If you're going to answer "never", please just don't respond. This post is for people who don't own crypto, who can genuinely imagine a situation where they might need to get some. Saying you would rather starve to death than swap to a new economic system and use crypto is disingenuous and goes against the spirit of the question.
We do not own any crypto, but I do listen to younger colleagues in the break room every day talk about it (and they have been talking at a level of excitement for the past 3 years on a daily basis) to recognize that it reminds me a lot of similar behavior I personally experienced and witnessed in the 1995-2001 time frame.
I have posted about this on BH before, but my choice over the past 4-5 years has been to learn from history of prior rushes, and invest in the companies that sell the "picks, shovels, overalls, food, shelter, energy, and services" to the miners (to borrow an analogy). I began reading about the companies in 2015 and have been fascinated at how many have already come and gone within the space as the larger leaders have emerged and are well known. I grew up in an area of the US that historically was a very large part of the Gold Rush (area was mined for 126 years), so have spent a lot of time over the past decades studying the boom bust cycle that was created.
For now, we remain focused with a portion of our portfolio invested in the companies that provide the equipment and infrastructure rather than the actual cryptocurrencies. For the typical BH, these are all in the Total Stock Market Index Funds - so Bogleheads are already invested in the space regarding "picks, shovels, overalls, food, shelter, energy, and services". For most, that is probably plenty. We just have been tilting a small percentage in that direction via holding individual company shares of some of the more important infrastructure providers. I am also cognizant that the demand for the gear/services could fizzle out due to more supply than demand, so do consider the risk reward level scenario to keep the percentage invested in the space at a smaller, reasonable level.