“What do you think about crypto?!” may be the question I get most often. I don’t talk about it much, but figured it’s a good time to post my own crypto portfolio and my feelings about it!‎
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Note that I didn’t use the word “investing” in the image. I don’t see it as investing, but rather as speculatively exchanging US dollars into cryptocurrency. Because crypto isn’t a productive asset that pays dividends or rental income. “Investing” in crypto is simply converting your dollars into a digital currency on a bet that someone else in the future will pay you more in the future than you paid today.‎
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That said it’s an extremely cool technology, and may indeed change the way we transact. Here are some of the pros and cons of crypto:‎
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Pros:‎
• Not created or manipulated by any government‎
• Limited supply‎
• Purely digital‎
• Store of value‎
• Hedge against fiat currency inflation‎
• Trades 24/7/365‎
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Cons:‎
• No real industrial use‎
• No internal product, profits, innovation, etc‎
• Not productive asset (does not provide dividends or income)‎
• Limited track record‎
• Very speculative‎
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Crypto stands in stark contrast to the things I invest in: stocks, bonds, and real estate. Those asset classes are productive because they pay me just for owning them. The longer I own them, the more money they produce, which I can reinvest to create that compound/exponential growth. I see crypto the same way I see commodities or currencies. As a store of value and a speculative bet that someone will pay more in the future. Historically, commodities and currencies get crushed by productive assets.‎
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That said, you can’t argue with the results over the last 10 years, and it’s anyone’s guess what’s gonna happen the next 10. That’s why I decided to invest a tiny bit per month as a release valve on my FOMO. ‎
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Should YOU invest in crypto? Well, I have no idea because I can’t see the future, but if you choose to I’d suggest a couple things:‎
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1. Keep contributions very small (<5% of your portfolio)‎ 2. Don’t get all of your investment advice from some dude on instagram giving it away for free.‎ ‎ Don’t forget the two rules.‎ ‎ -Jeremy‎ ‎

via Instagram