A large portion of my adult life is spent researching publicly traded securities. I’m a value investor in my free time and my profession is financial advice. While there are some decent companies at okay valuations in this market, Bitcoin and Ethereum are the most exciting opportunities that I’m aware of.
In 2017 I was the Crypto-Grinch; I conflated cryptocurrencies with tulip mania. My career as a financial advisor blinded me to the incredible opportunity. An opportunity that threatens a financial advisor’s ability to raise assets, after all.
It’s not that I didn’t research Bitcoin and blockchain technology, I just somehow failed to internalize it. In fairness, a lot has changed since 2017, but I’ll admit I left the sword in the scabbard.
Bitcoin and Ethereum are among the best alternative assets on earth. They can be accepted just about anywhere in the world, in any amount, and with nothing physical exchanged. It’s decentralized and the supply is finite. Wall street and the military industrial complex do not control it, and cannot exploit it.
The DeFi (Decentralized financialization) movement has my panties in a bunch. Well, the intersection of DeFi and CeFi (centralized financialization on the blockchain).
Most dollar functions perform better on a blockchain already. Right now I can earn about 10% (USD terms) on my emergency fund balance, 6% on my bitcoin, and I can borrow at 7%. In the future I’ll be able to buy a life insurance policy via a smart contract created by an enterprising actuary on a blockchain.
The building blocks to facilitate just about any financial function is in the works. Anyone on the Ethereum network will be able to borrow, lend, act as exchanges, market makers, or offer annuities and life insurance. There’s no shareholders, lawyers, intermediaries or salespeople. Costs are low and convenience is high.
The U.S. government and many large governments around the world are working on regulating cryptocurrencies, not banning them. Major institutions are moving into the space, such as Fidelity, Blackrock and Goldman Sachs. Wall Street can offer services on blockchains but they will never control the blockchains. Advantage, us.
Between being finite, easily divisible, trustworthy, globally recognized, and potentially leading to an undermining of Wall Street, crypto has my vote. I believe Bitcoin and Ethereum have already won in many ways. They’re the most used and institutionalized cryptocurrencies.
The best cryptocurrency may still yet to be invented so I’ll stay diligent and clear eyed. but for now, the horses to get us to mass adoption are the Bitcoin and Ethereum networks.
The things they will support, and the stores of value they will replace, are larger than the combined current ~$400B market capitalization.
Disclosure: I’m long Bitcoin and Ethereum with ~8% of my net worth.