Three Things I Think I Think – Crypto, Crypto, Crypto

Bitcoin, Currency, Technology, Money, Cryptocurrency

Here are some things I think I am thinking about.

1) So. Much. Crypto. 

I am about to write a post entirely about crypto. But before I do that I want to make it clear that this space gets way too much attention. I mean, we’re talking about an asset class that is incredibly small relative to the scope of the global financial asset portfolio. At just 1% of global financial assets the entire crypto space is about the size of Amazon. Amazingly though, the crypto space dominates the airwaves. It’s virtually all anyone can talk about these days. So, here I am to pile on.

Of course, the reason it’s getting so much attention is because of the sharp increase in prices. Crypto is the get rich quick narrative of the year. Or, more recently, the get poor quickly narrative. I was looking at the long-term charts of this space and it’s just incredible. Here’s the recent rise and fall:

And here’s the max drawdown chart. This is an asset class that has only existed for 10 years and has already experienced three drawn out 80% declines. Amazing stuff and kudos to the people who actually held on through all of this.

I don’t really know where I am going with all of this. I guess I am trying to add some broader perspective around narratives that sometimes make crypto seem much more important to our economy than it really is. Which, I guess is consistent with how the financial media tends to focus on these things. The highest flyers get the most attention, whether it’s a silly ad talking about how “Joe Schmo made $1MM betting on XYZ Penny stock” or whatever.

2) Let’s Talk About Michael Saylor Again. 

The amazing thing about Twitter is that you can directly talk to people you would never otherwise communicate with. For instance, over the weekend I posted the following retweet from Michael Saylor and he responded:

This is an interesting look into his perspective on his massive Bitcoin bet and the way he thinks about asset allocation. In case you haven’t been following, Microstrategy, a $4.5B data analytics company, has built up a $3.5B position in Bitcoin. Michael Saylor, the firm’s founder has argued that Bitcoin is a better cash-like reserve than actual USD.

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Disclaimer: The content in this article is provided as general information only and should not be taken as investment advice. Article content shall not be construed as a recommendation ...

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