Non US Investing: Should we put 5% of port in Bitcoin?

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ohboy!
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by ohboy! »

Jantoven wrote: Mon Mar 01, 2021 8:58 pm
ohboy! wrote: Sun Feb 28, 2021 8:09 pm
Ramjet wrote: Sun Feb 28, 2021 8:01 pm I find the suggestion of converting 1%-3% of your portfolio to cryoto and letting it ride without rebalancing reasonable

I don't own any crypto
I own a lot more than 1-3%. But would agree I’m over-risked, and 1-3% is reasonable. I would not leave out other cryptos though, especially Ethereum. I don’t personally care so much for ADA or BNB but I have some.

The crypto industry/space/community has established itself enough where I don’t see it going away. Hard to say which will have the best price performance going forward. I have spent a good deal of time educating myself on crypto and still believe Ethereum has the best future potential. I admit though that I know nothing about the future. So I hold 50 different coins, mostly weighted by marketcap. After 5 years, so far so good.
Out of curiosity - what is it about Ethereum that makes you think it has the greatest potential?
Vitalik Buterin and the developers and community he attracts. If you don’t have any ETH, or have never used metamask, it’s hard to explain all of the applications and protocols built on Ethereum. Though if you look at the top 100 crypto coins, probably half of them are Ethereum tokens. The stablecoins, decentralized exchanges, decentralized lending platforms, NFTs, etc.

ETH stores value (monetary)
ETH can be staked to generate yield (capital)
ETH is used to pay for transactions (commodity)
Jantoven
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Jantoven »

ohboy! wrote: Tue Mar 02, 2021 12:24 am
Jantoven wrote: Mon Mar 01, 2021 8:58 pm
ohboy! wrote: Sun Feb 28, 2021 8:09 pm
Ramjet wrote: Sun Feb 28, 2021 8:01 pm I find the suggestion of converting 1%-3% of your portfolio to cryoto and letting it ride without rebalancing reasonable

I don't own any crypto
I own a lot more than 1-3%. But would agree I’m over-risked, and 1-3% is reasonable. I would not leave out other cryptos though, especially Ethereum. I don’t personally care so much for ADA or BNB but I have some.

The crypto industry/space/community has established itself enough where I don’t see it going away. Hard to say which will have the best price performance going forward. I have spent a good deal of time educating myself on crypto and still believe Ethereum has the best future potential. I admit though that I know nothing about the future. So I hold 50 different coins, mostly weighted by marketcap. After 5 years, so far so good.
Out of curiosity - what is it about Ethereum that makes you think it has the greatest potential?
Vitalik Buterin and the developers and community he attracts. If you don’t have any ETH, or have never used metamask, it’s hard to explain all of the applications and protocols built on Ethereum. Though if you look at the top 100 crypto coins, probably half of them are Ethereum tokens. The stablecoins, decentralized exchanges, decentralized lending platforms, NFTs, etc.

ETH stores value (monetary)
ETH can be staked to generate yield (capital)
ETH is used to pay for transactions (commodity)
Awesome, thanks for the response.

What is to prevent something like DOT, for example, from potentially taking ETH's place? I ask this as someone who is looking into crypto but admittedly does not have much knowledge.
glorat
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by glorat »

Ignoring our own personal attempts to value Bitcoin etc. and assume we don't know better than the market about its valuation... we could just follow the market

BTC market cap - $600bn
World Equity Market Cap - North of $60,000bn

Conclusion: If you're following the market weights as a principle, BTC should be less than 1% of your portfolio and is therefore so small as to consider getting into on that principle.

ref: https://siblisresearch.com/data/us-stock-market-value/
ohboy!
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by ohboy! »

glorat wrote: Tue Mar 02, 2021 10:26 pm Ignoring our own personal attempts to value Bitcoin etc. and assume we don't know better than the market about its valuation... we could just follow the market

BTC market cap - $600bn
World Equity Market Cap - North of $60,000bn

Conclusion: If you're following the market weights as a principle, BTC should be less than 1% of your portfolio and is therefore so small as to consider getting into on that principle.

ref: https://siblisresearch.com/data/us-stock-market-value/
Not sure where you got $600BN. Much closer to $1T. Still, 1% is an ok allocation. And .5% to other coins perhaps.

Though anyone who actually wants to learn about the crypto space and see some of what it entails will probably quickly up it to 5%. Bitcoin is the grandfather of crypto. But the family is huge. The money being generated by some decentralized apps is astounding. Uniswap, for example, is a decentralized exchange that is taking in $100m a month in fees. Money that flowed into crypto in 2017 was put into developing quite a network of applications that are steamrolling disruptors.
jg12345
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by jg12345 »

ohboy! wrote: Wed Mar 03, 2021 12:10 am
glorat wrote: Tue Mar 02, 2021 10:26 pm Ignoring our own personal attempts to value Bitcoin etc. and assume we don't know better than the market about its valuation... we could just follow the market

BTC market cap - $600bn
World Equity Market Cap - North of $60,000bn

Conclusion: If you're following the market weights as a principle, BTC should be less than 1% of your portfolio and is therefore so small as to consider getting into on that principle.

ref: https://siblisresearch.com/data/us-stock-market-value/
Not sure where you got $600BN. Much closer to $1T. Still, 1% is an ok allocation. And .5% to other coins perhaps.

Though anyone who actually wants to learn about the crypto space and see some of what it entails will probably quickly up it to 5%. Bitcoin is the grandfather of crypto. But the family is huge. The money being generated by some decentralized apps is astounding. Uniswap, for example, is a decentralized exchange that is taking in $100m a month in fees. Money that flowed into crypto in 2017 was put into developing quite a network of applications that are steamrolling disruptors.
Thanks for this, helpful.

My quick look gives:
- crypto market: 1.1 T
- total stock market: 80+ T

1.2% and you're ok, 5% seems a lot unless you assume you know more than the market.

For OP, I quickly glanced through the video:
1) at the beginning guy on the right makes three points to reassure that bitcoin is safe:
- many people gave me money... mmm, ok, so this is going into "you'll find someone else buying, we all believe in this" (until they don't)
- "bitcoins are very much used". Is it? I do not know, and I might be wrong, but I don't see it so much used
- "12 years uninterrupted operation => I see no chance of left tail". Arguable that 12 years is time enough to use it as an argument for probability of 0 returns.

3) another theme I see is bitcoin being the next gold... I doubt one can use bitcoin in a very bad event such as country collapse, civil wars, etc.

4) Carrington events or low orbit EMP are also rather risky for bitcoins (this point courtesy of valuethinker)

Bitcoins not for me, but as glorat mentioned, not knowing anything I would consider only up to 1%.
ohboy!
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by ohboy! »

jg12345 wrote: Wed Mar 03, 2021 4:17 pm
ohboy! wrote: Wed Mar 03, 2021 12:10 am
glorat wrote: Tue Mar 02, 2021 10:26 pm Ignoring our own personal attempts to value Bitcoin etc. and assume we don't know better than the market about its valuation... we could just follow the market

BTC market cap - $600bn
World Equity Market Cap - North of $60,000bn

Conclusion: If you're following the market weights as a principle, BTC should be less than 1% of your portfolio and is therefore so small as to consider getting into on that principle.

ref: https://siblisresearch.com/data/us-stock-market-value/
Not sure where you got $600BN. Much closer to $1T. Still, 1% is an ok allocation. And .5% to other coins perhaps.

Though anyone who actually wants to learn about the crypto space and see some of what it entails will probably quickly up it to 5%. Bitcoin is the grandfather of crypto. But the family is huge. The money being generated by some decentralized apps is astounding. Uniswap, for example, is a decentralized exchange that is taking in $100m a month in fees. Money that flowed into crypto in 2017 was put into developing quite a network of applications that are steamrolling disruptors.
Thanks for this, helpful.

My quick look gives:
- crypto market: 1.1 T
- total stock market: 80+ T

1.2% and you're ok, 5% seems a lot unless you assume you know more than the market.

For OP, I quickly glanced through the video:
1) at the beginning guy on the right makes three points to reassure that bitcoin is safe:
- many people gave me money... mmm, ok, so this is going into "you'll find someone else buying, we all believe in this" (until they don't)
- "bitcoins are very much used". Is it? I do not know, and I might be wrong, but I don't see it so much used
- "12 years uninterrupted operation => I see no chance of left tail". Arguable that 12 years is time enough to use it as an argument for probability of 0 returns.

3) another theme I see is bitcoin being the next gold... I doubt one can use bitcoin in a very bad event such as country collapse, civil wars, etc.

4) Carrington events or low orbit EMP are also rather risky for bitcoins (this point courtesy of valuethinker)

Bitcoins not for me, but as glorat mentioned, not knowing anything I would consider only up to 1%.
I still don't know where you are getting your numbers. Total crypto market right now is around 1.5T (coingecko.com).

Bitcoin is the grandfather of crypto but in terms of new development, it's not much of the story. Look at uniswap. That's a decentralized exchange that generated $100m in trading fees last month. That's $1.2B a year in revenues. People say crypto isn't creating value, they are wrong. Not only is it creating value, but it's completely transparent, every transaction. No fudged quarterly reports. Everything is accessible, to anyone. On the other side of the trading, anyone can be a liquidity provider and make a return of the fees. This is the power of decentralization. I would recommend everyone look into it further. But as they say, you can lead a horse to water but you cannot make them drink.

defipulse.com is a decent index of decentralized protocols, their total value locked in the protocol and their respective rankings. This isn't just a store of value / gold competitor. There is a lot of finance and tech going on here and it's going to continue to make big waves.
SlowMovingInvestor
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by SlowMovingInvestor »

The reason most swapping fees are high is that gas prices are high. I'm not sure that contributes value, more like the opposite - it adds friction !

[ Yes, I know Ether is supposed to fix it's scaling problems and that gas prices will come down, let's see if that happens]

ADDED: And I should add that a lot of trading on Uniswap or elsewhere is likely just arbitrage bots. Akin to, but much slower than HFTs in stock/option exchanges.
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backofbeyond
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by backofbeyond »

While I'm not a Non US investor, most of my career has been spent outside the US and once I retire, I plan on spending most of my time living & traveling outside the US.

I was initially a skeptic of Bitcoin. But I also don't mind taking small risks that have potential large pay offs. After doing a fair amount of research, I decided to put 1% of my wealth in bitcoin (technically bitcoin miner stocks) last August. However, when I went to hit the buy button, I just couldn't do it. So, I decided to go in at 1/2 of 1%. Just for the record, I bought most of it in my Roth IRA account.

Fast forward: A couple weeks ago, bitcoin hit $58K. That .5% had ballooned to over 12% of my net worth. :shock:

Of course, since then it has fallen, currently it's at $47k as I write this. Regardless, I will let it ride if it goes to $1 or infinity and beyond.

BHs are generally a conservative bunch. So it's not unusual that the masses would be against such a "bet".

But when I read all the reasons above on why not to invest, I look at my 6 figure "bet" and think: Nothing succeeds like success.

Other's mileage may vary.
The question isn't at what age I want to retire, it is at what income. - George Foreman
gips
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by gips »

i dont think the question is if one should invest 5 per cent, it should be is 5 per cent the right amount? why not 10 per cent? or 20?

i mean, just where did this 5 per cent number originate? personally, i’ve made a lot of money with btc but i think it’s crazy to invest (gamble) more than 1 per cent.
anoop
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by anoop »

I thought about crypto for a bit but after realizing that I would need to open an account elsewhere decided against it. Also look closely at commissions and also whether you can move assets without incurring a tax hit.
ensign
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by ensign »

galeno wrote: Sun Feb 28, 2021 2:55 pm https://youtu.be/Zz6RK361Gxo

The above video is an excellent argument in favor of old seasoned retired investors like us buying and holding perhaps 5% of port in bitcoin.

I'd like to know what other veteran non-USA investors think about it.

If you asked me about my opinion regarding Bitcoin before I saw this video I would dismiss Bitcoin as a modern version of the Tulip Bulb mania.

Anyway. What do you think?
No. Wait, let me think about it. Hell, no.
Gadget
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Gadget »

anoop wrote: Thu Mar 04, 2021 8:44 pm I thought about crypto for a bit but after realizing that I would need to open an account elsewhere decided against it. Also look closely at commissions and also whether you can move assets without incurring a tax hit.
You really just need one account at a major exchange like Coinbase.

There is no tax hit for moving crypto around. Even if you're burning crypto to complete the transaction. The tax hit is only selling, or exchanging one crypto to another. Or if you're at a place like blockfi that gives interest payments back on your crypto.
anoop
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by anoop »

Gadget wrote: Fri Mar 05, 2021 1:38 pm
anoop wrote: Thu Mar 04, 2021 8:44 pm I thought about crypto for a bit but after realizing that I would need to open an account elsewhere decided against it. Also look closely at commissions and also whether you can move assets without incurring a tax hit.
You really just need one account at a major exchange like Coinbase.

There is no tax hit for moving crypto around. Even if you're burning crypto to complete the transaction. The tax hit is only selling, or exchanging one crypto to another. Or if you're at a place like blockfi that gives interest payments back on your crypto.
I would need to have access to the wallet for that. I just went through the process of consolidating accounts and simplifying my financial life, so I don't want to reverse course and open a new account. I already have an account with PayPal and they are offering crypto, but I would not have access to the wallet, which means if I ever wanted to transfer them I would have to sell.
jg12345
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by jg12345 »

ohboy! wrote: Wed Mar 03, 2021 6:26 pm
jg12345 wrote: Wed Mar 03, 2021 4:17 pm
ohboy! wrote: Wed Mar 03, 2021 12:10 am
glorat wrote: Tue Mar 02, 2021 10:26 pm Ignoring our own personal attempts to value Bitcoin etc. and assume we don't know better than the market about its valuation... we could just follow the market

BTC market cap - $600bn
World Equity Market Cap - North of $60,000bn

Conclusion: If you're following the market weights as a principle, BTC should be less than 1% of your portfolio and is therefore so small as to consider getting into on that principle.

ref: https://siblisresearch.com/data/us-stock-market-value/
Not sure where you got $600BN. Much closer to $1T. Still, 1% is an ok allocation. And .5% to other coins perhaps.

Though anyone who actually wants to learn about the crypto space and see some of what it entails will probably quickly up it to 5%. Bitcoin is the grandfather of crypto. But the family is huge. The money being generated by some decentralized apps is astounding. Uniswap, for example, is a decentralized exchange that is taking in $100m a month in fees. Money that flowed into crypto in 2017 was put into developing quite a network of applications that are steamrolling disruptors.
Thanks for this, helpful.

My quick look gives:
- crypto market: 1.1 T
- total stock market: 80+ T

1.2% and you're ok, 5% seems a lot unless you assume you know more than the market.

For OP, I quickly glanced through the video:
1) at the beginning guy on the right makes three points to reassure that bitcoin is safe:
- many people gave me money... mmm, ok, so this is going into "you'll find someone else buying, we all believe in this" (until they don't)
- "bitcoins are very much used". Is it? I do not know, and I might be wrong, but I don't see it so much used
- "12 years uninterrupted operation => I see no chance of left tail". Arguable that 12 years is time enough to use it as an argument for probability of 0 returns.

3) another theme I see is bitcoin being the next gold... I doubt one can use bitcoin in a very bad event such as country collapse, civil wars, etc.

4) Carrington events or low orbit EMP are also rather risky for bitcoins (this point courtesy of valuethinker)

Bitcoins not for me, but as glorat mentioned, not knowing anything I would consider only up to 1%.
I still don't know where you are getting your numbers. Total crypto market right now is around 1.5T (coingecko.com).

Bitcoin is the grandfather of crypto but in terms of new development, it's not much of the story. Look at uniswap. That's a decentralized exchange that generated $100m in trading fees last month. That's $1.2B a year in revenues. People say crypto isn't creating value, they are wrong. Not only is it creating value, but it's completely transparent, every transaction. No fudged quarterly reports. Everything is accessible, to anyone. On the other side of the trading, anyone can be a liquidity provider and make a return of the fees. This is the power of decentralization. I would recommend everyone look into it further. But as they say, you can lead a horse to water but you cannot make them drink.

defipulse.com is a decent index of decentralized protocols, their total value locked in the protocol and their respective rankings. This isn't just a store of value / gold competitor. There is a lot of finance and tech going on here and it's going to continue to make big waves.
Ok cool 1.5T! then it's close to 2% instead of 1%. However the other points I've made are not really answered by the fact that there "is value generated by trading fees" (or maybe it's my limited understanding of your reply?)

As another poster below said he did, investing around 1% AA in crypto sounds perfectly acceptable to me (but something I probably won't do)

Thanks also for sharing all the other infos!
diabelli
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by diabelli »

The idea of incorporating a small percentage amount of BTC into portfolio is understandable to me.
Problems I've been unable to get past:

1. What to do if/when the small percentage becomes a percentage above goal due to "outperformance" of the BTC? Selling to maintain the asset allocation defeats the purpose of the lottery ticket to begin with, and you get slammed with taxes (+ any complications thereof).
2. I feel great with a few hundred dollars in BTC, and I've found that only dollar-cost-averaging into it feels reasonable. But as soon as it becomes a substantial amount of money I question my sanity (i.e. for having like >$10000 in this thing) and I yank it out. Again defeating the purpose --> just taking a moderate short-term gain and getting taxed.
3. Automating investments into this during pull-backs and crashes doesn't feel nice as it does with indexing (i.e. I'm not thinking Wooh! It's on sale!). Instead I'm convinced every time that it's the beginning of the end of BTC. I suppose that means I don't really believe in its durability / longevity.

I should probably just take out all of my remaining AAVE, BTC, ETH. But in the case of AAVE and ETH I'd be selling at a bit of a loss. When I realize I'm *waiting for another run-up so that I can get out* I realize how silly the whole thing is.

Luckily the other 95% of our monthly investments goes to VTWAX, whew.
Laurizas
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Laurizas »

diabelli wrote: Sat Mar 06, 2021 9:00 am 1. What to do if/when the small percentage becomes a percentage above goal due to "outperformance" of the BTC? Selling to maintain the asset allocation defeats the purpose of the lottery ticket to begin with, and you get slammed with taxes (+ any complications thereof).
So just don't look at BTC as if it was a lottery ticket and do not add new money into BTC.
qwerty123
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by qwerty123 »

diabelli wrote: Sat Mar 06, 2021 9:00 am The idea of incorporating a small percentage amount of BTC into portfolio is understandable to me.
Problems I've been unable to get past:

1. What to do if/when the small percentage becomes a percentage above goal due to "outperformance" of the BTC? Selling to maintain the asset allocation defeats the purpose of the lottery ticket to begin with, and you get slammed with taxes (+ any complications thereof).
2. I feel great with a few hundred dollars in BTC, and I've found that only dollar-cost-averaging into it feels reasonable. But as soon as it becomes a substantial amount of money I question my sanity (i.e. for having like >$10000 in this thing) and I yank it out. Again defeating the purpose --> just taking a moderate short-term gain and getting taxed.
3. Automating investments into this during pull-backs and crashes doesn't feel nice as it does with indexing (i.e. I'm not thinking Wooh! It's on sale!). Instead I'm convinced every time that it's the beginning of the end of BTC. I suppose that means I don't really believe in its durability / longevity.

I should probably just take out all of my remaining AAVE, BTC, ETH. But in the case of AAVE and ETH I'd be selling at a bit of a loss. When I realize I'm *waiting for another run-up so that I can get out* I realize how silly the whole thing is.

Luckily the other 95% of our monthly investments goes to VTWAX, whew.
1. You do lose some of the upside by selling as it goes up, but you still get a nice benefit from outperformance if it occurs.
2. It sounds like you are relatively risk averse, so I would caution you from putting too much in. Crypto tends to be very volatile, and hence can have both extreme upticks in price and extreme drops in price - if you historically have pulled your money out when something like this occurred, you will want to limit how much you put in. Ideally you would put some amount in, and just ignore it unless it exceeds some target percent of your total allocation. That said, I will note that realizing a gain like you mentioned isn't a horrible thing - it sounds like you made money, and any tax was a percentage of your gain.

My advice to you would be:
* Select an amount you are willing to just write off, and put that amount into crypto, and just leave it + completely ignore it for 5 years. Write down in your investment policy statement exactly what your plan is (do not touch for 5 years unless value grows to be X% of total net worth)
* Or don't put anything into crypto - you're already investing into a broad market index fund - is crypto a risk you need / want to take?
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sperry8
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by sperry8 »

galeno wrote: Sun Feb 28, 2021 2:55 pm https://youtu.be/Zz6RK361Gxo

The above video is an excellent argument in favor of old seasoned retired investors like us buying and holding perhaps 5% of port in bitcoin.

I'd like to know what other veteran non-USA investors think about it.

If you asked me about my opinion regarding Bitcoin before I saw this video I would dismiss Bitcoin as a modern version of the Tulip Bulb mania.

Anyway. What do you think?
Here's how I think about it. You didn't want Bitcoin at $3,000. Why do you suddenly want it now at $50,000? The answer is simple imo. It's fomo. And fomo isn't a strategy.

I read somewhere that a very small % of people own the bulk of Bitcoin. As such it can be manipulated. It also could be taxed and regulated or worse, made illegal. There are numerous competitors any of which could have better uptake over time. There is of course limited history and no way to value (other than to say that more people are suddenly interested) which smacks to me of the greater fool theory.

You didn't want it at $3,000... nor at $10,000. Not at $20,000... but suddenly, at $50,000 BH is filled with threads asking, "should I get in now"? Fomo. The psychology of humankind never fails. And history rhymes.
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Valuethinker
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Valuethinker »

The fact that a thread with this title could even get this many posts is a measure of how deep into this crazy negative real interest rate cycle we are.

Because the usual answer boils down to "... it's not irrational when you look at interest rates ...".

Well. Quite. A negative yield implies that we should always prefer future consumption to present day consumption. So if we think interest rates are going to be negative (real) forever, we should save absolutely every penny we earn (down to living on the streets, in starvation) because our future self will thank us for it.*


* an overgeneralisation, to be sure. But the arrow of lower and lower discount rates points that way.
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Forester
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Forester »

Valuethinker wrote: Sat Mar 06, 2021 9:43 am The fact that a thread with this title could even get this many posts is a measure of how deep into this crazy negative real interest rate cycle we are.

Because the usual answer boils down to "... it's not irrational when you look at interest rates ...".

Well. Quite. A negative yield implies that we should always prefer future consumption to present day consumption. So if we think interest rates are going to be negative (real) forever, we should save absolutely every penny we earn (down to living on the streets, in starvation) because our future self will thank us for it.*


* an overgeneralisation, to be sure. But the arrow of lower and lower discount rates points that way.
Interested, what's your take on inflation in developed economies, in the 2020s? Existing state of affairs, or higher inflation?
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Stork
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Stork »

sperry8 wrote: Sat Mar 06, 2021 9:37 am
galeno wrote: Sun Feb 28, 2021 2:55 pm https://youtu.be/Zz6RK361Gxo

The above video is an excellent argument in favor of old seasoned retired investors like us buying and holding perhaps 5% of port in bitcoin.

I'd like to know what other veteran non-USA investors think about it.

If you asked me about my opinion regarding Bitcoin before I saw this video I would dismiss Bitcoin as a modern version of the Tulip Bulb mania.

Anyway. What do you think?
Here's how I think about it. You didn't want Bitcoin at $3,000. Why do you suddenly want it now at $50,000? The answer is simple imo. It's fomo. And fomo isn't a strategy.

I read somewhere that a very small % of people own the bulk of Bitcoin. As such it can be manipulated. It also could be taxed and regulated or worse, made illegal. There are numerous competitors any of which could have better uptake over time. There is of course limited history and no way to value (other than to say that more people are suddenly interested) which smacks to me of the greater fool theory.

You didn't want it at $3,000... nor at $10,000. Not at $20,000... but suddenly, at $50,000 BH is filled with threads asking, "should I get in now"? Fomo. The psychology of humankind never fails. And history rhymes.
In particular taxed or regulated. John Kay writes much better about this: https://www.johnkay.com/2018/03/05/bitcoin-boon-bubble/
Hustlinghustling
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Hustlinghustling »

sperry8 wrote: Sat Mar 06, 2021 9:37 am Here's how I think about it. You didn't want Bitcoin at $3,000. Why do you suddenly want it now at $50,000? The answer is simple imo. It's fomo. And fomo isn't a strategy.

I read somewhere that a very small % of people own the bulk of Bitcoin. As such it can be manipulated. It also could be taxed and regulated or worse, made illegal. There are numerous competitors any of which could have better uptake over time. There is of course limited history and no way to value (other than to say that more people are suddenly interested) which smacks to me of the greater fool theory.

You didn't want it at $3,000... nor at $10,000. Not at $20,000... but suddenly, at $50,000 BH is filled with threads asking, "should I get in now"? Fomo. The psychology of humankind never fails. And history rhymes.
Counterpoint to this is that this is also precisely how indexing and market-cap based investing works too. The more a stock grows in value and the higher its stock price, the more you buy due to market cap weighting. Tesla being great example of this where it ballooned it's way into everyone's SP500 holdings. While I understand your point of why at 50k and why not at 3k, index investing seems to suggest that the fundamental characteristic and relevance of an asset changes as it grows in value so the consideration is arguably not the same as when it was trading for multiples lower
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Valuethinker »

Forester wrote: Sat Mar 06, 2021 10:14 am
Valuethinker wrote: Sat Mar 06, 2021 9:43 am The fact that a thread with this title could even get this many posts is a measure of how deep into this crazy negative real interest rate cycle we are.

Because the usual answer boils down to "... it's not irrational when you look at interest rates ...".

Well. Quite. A negative yield implies that we should always prefer future consumption to present day consumption. So if we think interest rates are going to be negative (real) forever, we should save absolutely every penny we earn (down to living on the streets, in starvation) because our future self will thank us for it.*


* an overgeneralisation, to be sure. But the arrow of lower and lower discount rates points that way.
Interested, what's your take on inflation in developed economies, in the 2020s? Existing state of affairs, or higher inflation?
I have absolutely no clue. By its nature, Brexit should lead to higher prices overall in the UK.

The price of inflation protection (index linked gilts) is very high right now (ie negative real yields= guarantee to lose money if inflation is as the market expects).

Gold is pretty much the standard inflation hedge, if that's one's real concern. Commercial property also -- but right now, with the uncertain post Covid world, I am very cautious. There's a lot of commercial property that is now effectively worthless (retail, primarily but also I think organisations will require less office space).
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Valuethinker »

sperry8 wrote: Sat Mar 06, 2021 9:37 am
galeno wrote: Sun Feb 28, 2021 2:55 pm https://youtu.be/Zz6RK361Gxo

The above video is an excellent argument in favor of old seasoned retired investors like us buying and holding perhaps 5% of port in bitcoin.

I'd like to know what other veteran non-USA investors think about it.

If you asked me about my opinion regarding Bitcoin before I saw this video I would dismiss Bitcoin as a modern version of the Tulip Bulb mania.

Anyway. What do you think?
Here's how I think about it. You didn't want Bitcoin at $3,000. Why do you suddenly want it now at $50,000? The answer is simple imo. It's fomo. And fomo isn't a strategy.

I read somewhere that a very small % of people own the bulk of Bitcoin. As such it can be manipulated. It also could be taxed and regulated or worse, made illegal. There are numerous competitors any of which could have better uptake over time. There is of course limited history and no way to value (other than to say that more people are suddenly interested) which smacks to me of the greater fool theory.

You didn't want it at $3,000... nor at $10,000. Not at $20,000... but suddenly, at $50,000 BH is filled with threads asking, "should I get in now"? Fomo. The psychology of humankind never fails. And history rhymes.
This I think is a fairly perfect description of what is going on.
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Gadget »

Valuethinker wrote: Sun Mar 07, 2021 7:57 am
sperry8 wrote: Sat Mar 06, 2021 9:37 am
galeno wrote: Sun Feb 28, 2021 2:55 pm https://youtu.be/Zz6RK361Gxo

The above video is an excellent argument in favor of old seasoned retired investors like us buying and holding perhaps 5% of port in bitcoin.

I'd like to know what other veteran non-USA investors think about it.

If you asked me about my opinion regarding Bitcoin before I saw this video I would dismiss Bitcoin as a modern version of the Tulip Bulb mania.

Anyway. What do you think?
Here's how I think about it. You didn't want Bitcoin at $3,000. Why do you suddenly want it now at $50,000? The answer is simple imo. It's fomo. And fomo isn't a strategy.

I read somewhere that a very small % of people own the bulk of Bitcoin. As such it can be manipulated. It also could be taxed and regulated or worse, made illegal. There are numerous competitors any of which could have better uptake over time. There is of course limited history and no way to value (other than to say that more people are suddenly interested) which smacks to me of the greater fool theory.

You didn't want it at $3,000... nor at $10,000. Not at $20,000... but suddenly, at $50,000 BH is filled with threads asking, "should I get in now"? Fomo. The psychology of humankind never fails. And history rhymes.
This I think is a fairly perfect description of what is going on.
How can bogleheads think this is a good description?

If it were, we'd be telling new posters that VTI is near all time highs. They didn't want it in 2008, so they shouldn't get FOMO and buy in now. They should wait for a huge crash in the US stock market before buying VTI. No one would say that...
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by diabelli »

Yeah I'll just go ahead and point out here that VTI means ownership of a bunch of companies with actual earnings. Not something of entirely arbitrary value
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by SEAworld9 »

diabelli wrote: Sun Mar 07, 2021 10:19 am Yeah I'll just go ahead and point out here that VTI means ownership of a bunch of companies with actual earnings. Not something of entirely arbitrary value
What happens when more and more of those companies start buying Bitcoin? At what point is it validated? Not being snarky; actually asking the question.
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Hustlinghustling »

diabelli wrote: Sun Mar 07, 2021 10:19 am Yeah I'll just go ahead and point out here that VTI means ownership of a bunch of companies with actual earnings. Not something of entirely arbitrary value
What about companies that produce equipment for Bitcoin mining? There's real cash flow, based off a real demand people have, but the underlying driver of the industry is still the same hype for bitcoin. Even moreso, the cashflows generated by such businesses are clearly correlated to how much dollar value people assign a Bitcoin... Is this really any different?

I'll put it out there that this "arbitrary" distinction is more a degrees of separation. And if we zoom out enough, ultimately our fundamental preferences and demand for anything that drives consumption or a value in something beyond a certain baseline level of survival is very much culture dependent and "arbitrary" just the same.
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by SlowMovingInvestor »

Hustlinghustling wrote: Sun Mar 07, 2021 4:53 pm
diabelli wrote: Sun Mar 07, 2021 10:19 am Yeah I'll just go ahead and point out here that VTI means ownership of a bunch of companies with actual earnings. Not something of entirely arbitrary value
What about companies that produce equipment for Bitcoin mining? There's real cash flow, based off a real demand people have, but the underlying driver of the industry is still the same hype for bitcoin. Even moreso, the cashflows generated by such businesses are clearly correlated to how much dollar value people assign a Bitcoin... Is this really any different?
Other than a few very small companies devoted to mining, and maybe 3 medium to large companies that would generally have fairly large markets for their products even without mining, how many of these are there (compared to the VTI) ? It's a very niche marke.

NVDA would be a very successful company without the mining market-- in fact, they're trying to tweak their GPUs so that they can't be used for Ether mining, and aren't used for bitcoin mining these days.
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Dottie57 »

:thumbsup :annoyed :annoyed :annoyed :annoyed
David Jay wrote: Sun Feb 28, 2021 2:58 pm You are going to give up your IPS because you watched a YouTube video???
+1
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Hustlinghustling »

SlowMovingInvestor wrote: Sun Mar 07, 2021 5:50 pm
Hustlinghustling wrote: Sun Mar 07, 2021 4:53 pm
diabelli wrote: Sun Mar 07, 2021 10:19 am Yeah I'll just go ahead and point out here that VTI means ownership of a bunch of companies with actual earnings. Not something of entirely arbitrary value
What about companies that produce equipment for Bitcoin mining? There's real cash flow, based off a real demand people have, but the underlying driver of the industry is still the same hype for bitcoin. Even moreso, the cashflows generated by such businesses are clearly correlated to how much dollar value people assign a Bitcoin... Is this really any different?
Other than a few very small companies devoted to mining, and maybe 3 medium to large companies that would generally have fairly large markets for their products even without mining, how many of these are there (compared to the VTI) ? It's a very niche marke.

NVDA would be a very successful company without the mining market-- in fact, they're trying to tweak their GPUs so that they can't be used for Ether mining, and aren't used for bitcoin mining these days.
I'm not speaking of VTI, but a broader point on what we dismiss as arbitrary value (the part of my quote you cut off). Mining companies is just an easy and direct illustration of this
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by InvestInvest »

I will start dollar-cost averaging into bitcoin a few months after it has started to crash (as it probably will). It seems stupid to me to chase the parabolic move that is going on right now, but the history of bitcoin price really speaks for itself.
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Valuethinker »

SlowMovingInvestor wrote: Sun Mar 07, 2021 5:50 pm
Hustlinghustling wrote: Sun Mar 07, 2021 4:53 pm
diabelli wrote: Sun Mar 07, 2021 10:19 am Yeah I'll just go ahead and point out here that VTI means ownership of a bunch of companies with actual earnings. Not something of entirely arbitrary value
What about companies that produce equipment for Bitcoin mining? There's real cash flow, based off a real demand people have, but the underlying driver of the industry is still the same hype for bitcoin. Even moreso, the cashflows generated by such businesses are clearly correlated to how much dollar value people assign a Bitcoin... Is this really any different?
Other than a few very small companies devoted to mining, and maybe 3 medium to large companies that would generally have fairly large markets for their products even without mining, how many of these are there (compared to the VTI) ? It's a very niche marke.

NVDA would be a very successful company without the mining market-- in fact, they're trying to tweak their GPUs so that they can't be used for Ether mining, and aren't used for bitcoin mining these days.
That's really interesting on NVDA.

Last time Bitcoin was this strong (when it hit $20k) the talk was very much that it was shortages of GPUs produced by NVDA that were slowing up the mining market. People were buying other computers to rip out the NVDA graphics chips, I believe.

Are the miners now using custom ASICS? (Not the shoes ;-)). In which case who is specc'ing and designing them? (I assume that TSMC is actually fabricating them?).
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Valuethinker »

Hustlinghustling wrote: Sun Mar 07, 2021 4:53 pm
diabelli wrote: Sun Mar 07, 2021 10:19 am Yeah I'll just go ahead and point out here that VTI means ownership of a bunch of companies with actual earnings. Not something of entirely arbitrary value
What about companies that produce equipment for Bitcoin mining? There's real cash flow, based off a real demand people have, but the underlying driver of the industry is still the same hype for bitcoin. Even moreso, the cashflows generated by such businesses are clearly correlated to how much dollar value people assign a Bitcoin... Is this really any different?

I'll put it out there that this "arbitrary" distinction is more a degrees of separation. And if we zoom out enough, ultimately our fundamental preferences and demand for anything that drives consumption or a value in something beyond a certain baseline level of survival is very much culture dependent and "arbitrary" just the same.
I entirely agree with the anthropological/ sociological perspective you have adopted in the second paragraph.

As to the first. Beware bubble logic. We (I) thought companies like Sun Microsystems, Oracle, HP, Cisco were "safe" during the dot com bubble, because they had real sales and real earnings*

Instead when the dot com and VC industries collapses, they stopped buying all that software and hardware (and typically, naive Founders had been paying full rate card prices, when in fact industry practice was to give large discounts). The sales and earnings of the whole tech sector went down the plughole (people forget, perhaps, that at that time Apple was little more than a historic curiousity).

"Torpedo stocks"- you had implosion in earnings, but also implosion in PE multiples, so the effect was at least doubled (or tripled).

Bitcoin mining shares are dependent on high prices for Bitcoin, in principle. There will turn out to be a circularity there which will become very evident.

Similar things happened in US financial services in the housing bubble. It wasn't just housebuilding companies that got overvalued - deriving huge earnings from the inflation in US housing prices.

* accounting fraud. Enron. Worldcom. Nortel. And as Buffett pointed out at the time, the cost of stock options was not properly accounted for in the earnings. So the whole sector (Tech Media Telecoms) was on make believe.

Rest assured, this current speculative mania we are in will, in time, have proven to have hidden some major bits of corporate fraud and malfeasance. Enron, Madoff etc. There always is.
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by backofbeyond »

Hustlinghustling wrote: Sun Mar 07, 2021 4:53 pm
diabelli wrote: Sun Mar 07, 2021 10:19 am Yeah I'll just go ahead and point out here that VTI means ownership of a bunch of companies with actual earnings. Not something of entirely arbitrary value
What about companies that produce equipment for Bitcoin mining? There's real cash flow, based off a real demand people have, but the underlying driver of the industry is still the same hype for bitcoin. Even moreso, the cashflows generated by such businesses are clearly correlated to how much dollar value people assign a Bitcoin... Is this really any different?

I'll put it out there that this "arbitrary" distinction is more a degrees of separation. And if we zoom out enough, ultimately our fundamental preferences and demand for anything that drives consumption or a value in something beyond a certain baseline level of survival is very much culture dependent and "arbitrary" just the same.
I originally invest in just one crypto miner: HVBTF.

However, when things started to go parabolic, I decided to spread it around to other miners, companies that make the equipment, ones that make the cards, ones that allow people to use/buy etc.

So these are the companies that I have researched that have "something" to do with crypto that I personally invest in:

CAN
CLSK
ARBKF
RIOT
HVBTF
MARA
DMGGF
TSLA
HUTME
SQ
GBTC
PYPL
MOGO
BTBT
MSTR
BRPHF
SOS
FTFT
NVDA

Do your own research of what each company does before investing.
The question isn't at what age I want to retire, it is at what income. - George Foreman
casually average
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by casually average »

Blockchain technology is revolutionary. Bitcoin is a bubble. Stay away from it. Stay away from NFTs. Stay the course. You will profit from the blockchain technology once the crypto companies become part of your world index.
1% better every day. Any day. For the rest of my life.
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by mrekvy491 »

The only advantage I could think of that it can be useful in countries with capital controls. I remember you being unhappy about Interactive Brokers not offering the service through the banks in Panama, and the banking regulations set by your local government, so Bitcoin could be useful from that aspect at least. You will still be able to take your Bitcoin with you when the banks force you certain exchange rate, or hold only local currencies etc.

But if you want Bitcoin just because your bonds are not yielding much, I don't think it is a good move. You could just reduce the bond allocation and hold some cash. The Fed talks suggest the interest rate hikes will happen around 2023. I don't see the inflation skyrocketing to the 70s styled so the bond/cash portion of your portfolio losing value significantly.

There also are other alternatives like value stocks, financials, REITs, international stocks, gold. Or you could even accept a small decline and reduce the spending to certain extent.

Moreover, I don't think the 5% will give you such a moonshot that would change your portfolio growth significantly.

Being 'seasoned' does not make you immune to making unnecessarily risky moves. If you are retired already, is it really that important to have that amount of Bitcoin?
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by GR8FUL-D »

backofbeyond wrote: Thu Mar 04, 2021 6:38 pm
I was initially a skeptic of Bitcoin. But I also don't mind taking small risks that have potential large pay offs. After doing a fair amount of research, I decided to put 1% of my wealth in bitcoin (technically bitcoin miner stocks) last August. However, when I went to hit the buy button, I just couldn't do it. So, I decided to go in at 1/2 of 1%. Just for the record, I bought most of it in my Roth IRA account.

Fast forward: A couple weeks ago, bitcoin hit $58K. That .5% had ballooned to over 12% of my net worth. :shock:

Of course, since then it has fallen, currently it's at $47k as I write this. Regardless, I will let it ride if it goes to $1 or infinity and beyond.
If you don't mind sharing:

Which bitcoin miner stocks did you buy, and metrics / info did you use to choose them?

A month or two ago those stocks were 12% of your net worth--what % are they now?

Are you still not buying any btc, ether, or other coins?
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by latetodinner »

Bitcoin was my first investment, after paying back the mortgage. I was young and stupid and didn't think about it as investing (I had little clue what my net worth was or where it was invested in). I DCAd starting at 7k, stayed out during the explosion where it touched 20k, then started again after it fell. I bought a little bit every month, eventually having an average cost of 10k. I decided I put in enough <local currency> and stopped.

Now (60k) it's about 4% of my portfolio. Not enough to make it worth the hassle to sell some.

Why does Bitcoin have value? Because you need it to pay for Bitcoin transactions. It's hard to move Bitcoin (to mine a block). Provably hard.

Not everything that's expensive has value - a bonfire made of a million 100$ bills would be very expensive, but probably not worth very much. At most a few TV interviews. But many things have value mostly because they're expensive.

I worry about the Satoshi coins moving, or other stashes of many thousands of Bitcoin. Not for the sake of my measly holdings, but for the sake of the Great Bitcoin Experiment. To bank the unbanked :)

I really like the idea of money that the bank can't confiscate. Whenever I think of that notion, I recall the time a bank error made my card declined at the ATM (despite having a positive balance). I called the bank to find out what's wrong and got yelled at that I am negative 30k and will not be allowed to withdraw funds or use my credit card. I loaned money from a coworker to pay for the bus home. Fortunately it only took a day to resolve the error.

They've been passing laws here, making it illegal to use cash for large purchases. The more I write, the more I'm talking myself into trusting a different banking system than my country's. It probably won't be Bitcoin, though. Way too volatile.
Last edited by latetodinner on Mon Apr 19, 2021 10:44 am, edited 2 times in total.
My tax situation is pretty weird
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by SlowMovingInvestor »

latetodinner wrote: Sun Apr 18, 2021 1:45 pm
Why does Bitcoin have value? Because you need it to pay for Bitcoin transactions. It's hard to move Bitcoin (to mine a block). Provably hard.
That seems a little ... circular. Something has value because you need to use it to transfer ? If anything that would make it less valuable (that it has a higher transaction cost).

[ Mining isn't the same as transacting, it's just one form of transaction.]
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by latetodinner »

SlowMovingInvestor wrote: Sun Apr 18, 2021 1:53 pm That seems a little ... circular. Something has value because you need to use it to transfer ? If anything that would make it less valuable (that it has a higher transaction cost).
I didn't think I need to comment on it being a circular argument :)

As for transaction cost - it makes it less liquid (there's already "dust", I believe - Bitcoin values too small to be worth the transaction fee to move. Maybe forever). Does that necessarily make it worth less?
SlowMovingInvestor wrote: Sun Apr 18, 2021 1:53 pm [ Mining isn't the same as transacting, it's just one form of transaction.]
You can't place a transaction on the blockchain without a new block getting mined. The miner will allow your transaction on his block, if you pay them enough.
My tax situation is pretty weird
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by SlowMovingInvestor »

latetodinner wrote: Sun Apr 18, 2021 2:11 pm
SlowMovingInvestor wrote: Sun Apr 18, 2021 1:53 pm [ Mining isn't the same as transacting, it's just one form of transaction.]
You can't place a transaction on the blockchain without a new block getting mined. The miner will allow your transaction on his block, if you pay them enough.
Now yes, but lightning is supposed to fix that.

If BTC is intended to support an alternative monetary system, then it needs to be easier and cheaper to transfer, not harder.
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Valuethinker »

galeno wrote: Sun Feb 28, 2021 2:55 pm https://youtu.be/Zz6RK361Gxo

The above video is an excellent argument in favor of old seasoned retired investors like us buying and holding perhaps 5% of port in bitcoin.

I'd like to know what other veteran non-USA investors think about it.

If you asked me about my opinion regarding Bitcoin before I saw this video I would dismiss Bitcoin as a modern version of the Tulip Bulb mania.

Anyway. What do you think?
You are basically being suckered into a momentum asset.

"Bitcoin is a valid asset allocation because it has gone up a lot in price"

Meets definition of a speculative asset. All of your "return" is based on someone else valuing it even more highly.
, I
Exception is if you need to try to bypass foreign exchange controls (but I wouldn't be talking about that openly on the Internet, if I needed to do it).
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by GregG3 »

latetodinner wrote: Sun Apr 18, 2021 1:45 pm

.... The more I write, the more I'm talking myself into trusting a different banking system than my country's. It probably won't be Bitcoin, though. Way too volatile.
For sure not a bitcoin or other crypto outside government control. No responsible government will ever surrender the right to regulate or have influence over its currency.
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by latetodinner »

GregG3 wrote: Mon Apr 19, 2021 3:25 am For sure not a bitcoin or other crypto outside government control. No responsible government will ever surrender the right to regulate or have influence over its currency.
... if it can help it or isn't getting enough in return. It already happened - to countries in the Eurozone who are now incapable of printing Euros, and countries that just gave up and are using the US Dollar.

I don't expect that to happen, though - countries will still demand taxes and other payments in a currency they can control. But countries tolerate gold, and foreign currency (holding foreign currency has been legal in my country for decades now) and may yet tolerate a cryptocurrency
My tax situation is pretty weird
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by GregG3 »

latetodinner wrote: Mon Apr 19, 2021 10:51 am
GregG3 wrote: Mon Apr 19, 2021 3:25 am For sure not a bitcoin or other crypto outside government control. No responsible government will ever surrender the right to regulate or have influence over its currency.
... if it can help it or isn't getting enough in return. It already happened - to countries in the Eurozone who are now incapable of printing Euros, and countries that just gave up and are using the US Dollar.

I don't expect that to happen, though - countries will still demand taxes and other payments in a currency they can control. But countries tolerate gold, and foreign currency (holding foreign currency has been legal in my country for decades now) and may yet tolerate a cryptocurrency
Governments have no issues with its citizens investing in anything they want, as long as they pay taxes on investment gains. But they will not allow a crypto to replace its currency. This includes currency blocks like eurozone. CEB still controls the level of money supply, rates and other parameters influencing economic activity. With crypto all that would be impossible.
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by Valuethinker »

GregG3 wrote: Tue Apr 20, 2021 12:16 am
latetodinner wrote: Mon Apr 19, 2021 10:51 am
GregG3 wrote: Mon Apr 19, 2021 3:25 am For sure not a bitcoin or other crypto outside government control. No responsible government will ever surrender the right to regulate or have influence over its currency.
... if it can help it or isn't getting enough in return. It already happened - to countries in the Eurozone who are now incapable of printing Euros, and countries that just gave up and are using the US Dollar.

I don't expect that to happen, though - countries will still demand taxes and other payments in a currency they can control. But countries tolerate gold, and foreign currency (holding foreign currency has been legal in my country for decades now) and may yet tolerate a cryptocurrency
Governments have no issues with its citizens investing in anything they want, as long as they pay taxes on investment gains. But they will not allow a crypto to replace its currency. This includes currency blocks like eurozone. CEB still controls the level of money supply, rates and other parameters influencing economic activity. With crypto all that would be impossible.
Governments can allow, or not allow, their citizens to use crypto.

The very thought that we are even talking about such an asset as part of our asset allocation, tells you this thing has lost all sense. This is a purely speculative asset.

My advice to those who have made money in cryptocurrencies? Take half your money off the table. That way, whichever it goes, you know you made something out of it.

Target percentage?
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by WolfgangPauli »

SlowMovingInvestor wrote: Sun Apr 18, 2021 2:14 pm
latetodinner wrote: Sun Apr 18, 2021 2:11 pm
SlowMovingInvestor wrote: Sun Apr 18, 2021 1:53 pm [ Mining isn't the same as transacting, it's just one form of transaction.]
You can't place a transaction on the blockchain without a new block getting mined. The miner will allow your transaction on his block, if you pay them enough.
Now yes, but lightning is supposed to fix that.

If BTC is intended to support an alternative monetary system, then it needs to be easier and cheaper to transfer, not harder.
And, I can't go to bed and then wake up and find out my "stable monetary alternative" just lost 8% of its value. From a volatility standpoint, it is more volatile than just about anything which means there is no way it is a monetary alternative.
Twitter: @JAXbogleheads | EM: JAXbogleheads@gmail.com
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by WolfgangPauli »

GregG3 wrote: Tue Apr 20, 2021 12:16 am
latetodinner wrote: Mon Apr 19, 2021 10:51 am
GregG3 wrote: Mon Apr 19, 2021 3:25 am For sure not a bitcoin or other crypto outside government control. No responsible government will ever surrender the right to regulate or have influence over its currency.
... if it can help it or isn't getting enough in return. It already happened - to countries in the Eurozone who are now incapable of printing Euros, and countries that just gave up and are using the US Dollar.

I don't expect that to happen, though - countries will still demand taxes and other payments in a currency they can control. But countries tolerate gold, and foreign currency (holding foreign currency has been legal in my country for decades now) and may yet tolerate a cryptocurrency
Governments have no issues with its citizens investing in anything they want, as long as they pay taxes on investment gains. But they will not allow a crypto to replace its currency. This includes currency blocks like eurozone. CEB still controls the level of money supply, rates and other parameters influencing economic activity. With crypto all that would be impossible.
Not quite true. You cannot invest in a plant that makes LSD.. I think that would make you an accomplice to a crime.
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WolfgangPauli
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Re: Non US Investing: Should we put 5% of port in Bitcoin?

Post by WolfgangPauli »

latetodinner wrote: Mon Apr 19, 2021 10:51 am
GregG3 wrote: Mon Apr 19, 2021 3:25 am For sure not a bitcoin or other crypto outside government control. No responsible government will ever surrender the right to regulate or have influence over its currency.
... if it can help it or isn't getting enough in return. It already happened - to countries in the Eurozone who are now incapable of printing Euros, and countries that just gave up and are using the US Dollar.

I don't expect that to happen, though - countries will still demand taxes and other payments in a currency they can control. But countries tolerate gold, and foreign currency (holding foreign currency has been legal in my country for decades now) and may yet tolerate a cryptocurrency
Actually that is exactly what the European governments did when they created the Euro which makes it very difficult for them to do the monetary manipulations the US Government does. I think crypto is crazy for this reason. I bet every government in Europe wishes they could have that decision back.
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