Bitcoin play pov #607
Description
Here’s a fun conundrum that most Bitcoin folks tend to miss.
As the Bitcoin goal posts have shifted from “decentralized and independent asset class for everyone” to a speculative investment vehicle largely tied to its fiat value, it simply doesn’t matter if you do or do not invest in Bitcoin.
Say the (current) Bitcoin community is right and Bitcoin becomes a broadly adopted institutional and regulated asset class worth 1M or even more in fiat per BTC. If and when that’s the case, the institutional buy-in is so prolific that essentially we are all automatically invested in Bitcoin. It is now a backbone to our global finance system. Hooray. Crypto won. But effectively nothing changes. The same institutions still control the majority of wealth and there’s no decoupling to fiat value so all our plain old boring fiat based investments are still measured against the same shared value stores, which now just happens to include Bitcoin. Sure some folks made a killing in the process but over time institutional wealth simply takes over again. Status quo extended. Nothing changes.
Say the (current) Bitcoin community is wrong and after another decade of regulatory friction driving market volatility the unthinkable happens and Bitcoin decouples almost entirely from fiat currency. I.e. it becomes worthless in terms of fiat value. The average person operating in the “normal” economy no longer has a use case and Bitcoin once more becomes fringe “Internet money”. Institutional investment ceases almost entirely and individual direct asset holders risk massive losses, in terms of fiat value anyways, because of course 1 bitcoin remains 1 bitcoin.
So, either Bitcoin becomes universally adopted at the institutional level, in which case I don’t have to do anything to become invested, or it fails, in which case I lose nothing by NOT being invested.
With that in mind, to quote the great WOPR … sometimes the best strategy is to simply not play at all.
This the paradox of the Bitcoin community’s long term vision for Bitcoin’s success as an asset class.
Either way, boring investment vehicles tied to assets that physically exist in the world, such as companies, continue to be a reliable long term investment play. Even if their worth were represented in Bitcoin at the institutional level your boring index fund portfolio simply migrates over.
All that to say, highly speculative investment vehicles have always existed. It takes a lot of risk appetite to get on board with them but high risk high reward is certainly a thing. That doesn’t mean NOT investing in them isn’t a sound strategy.
r/buttcoin