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To Francis BayesWCI columnist
I wrote the first draft of this column in December 2021 and since then Cryptography Winter has begun (currencies, assets, securities, whatever you want to call it). I would like to share the original draft with my latest comments, rather than publishing a column that makes me look stupid or pretends to be coming. I think it’s similar to submitting a manuscript to a peer-reviewed journal and then replying to the reviewers.
Do I need to buy crypto in the first place?
What I wrote in December 2021:
Many WCI leaders have won or are on track to win the game. To win the game, Therefore, they can ignore crypto (or Bitcoin maxi, Bitcoin, crypto) with “serious money” and enjoy financial independence.Extra returns May not be noticeable If those volatility is attracted, or in the case of “stablecoin” Not even a little risk is worth it.. A 10% drop in the stock market is a big problem. However, Bitcoin and other cryptos drop by 10% almost every month. You can use “house money” to “buy dips” in a disciplined way with the goal of “creating wealth,” but their time is worth more than the absolute benefits of following prices. There may be.
What I wrote in July 2022:
Stablecoin is definitely not worth the yield. This is an update of what happened in 2022: Algorithm Stablecoin TerraUSD and its sister Luna CollapsedTether, the largest stablecoin, Below the $ 1 pegAnd Celsius – one of the largest crypto lenders –Suspended transaction.. I bought the crypto, but stablecoin and “Cryptographic savings account.. “
What I wrote in December 2021:
For those of us who are embarking on a journey to financial independence (ie saving for the next 20-30 years), we need to ignore crypto until (1) is done. Term life insurance and disability insurance In place, (2) maximum 401 (k) Employer unity, Medical savings accountWhen Loss (Or traditional) IRA. Repaying the debt first may also have greater emotional and emotional rewards. Building a personal safety net and preserving habits is like installing an autopilot for financial independence.
When the autopilot is installed, many of us Reddit, White Court Investor ForumWhen WCI Podcast What to do next. I buy crypto with a small portion of my additional savings for peace of mind.I’ll tell you why, but this column isn’t about the benefits of Blockchain Technology and cryptography. This is about how to protect the emotions that affect my time to think about my behavior and economy.
What I wrote in July 2022:
My selfish side rejoices when the stock market crashes (Sale!). However, I found that the cryptocurrency crash was so quick and random that it was more ambiguous about executing a desired limit order on Saturday morning (see image below). Crypto has never exceeded 2% of my portfolio, so it won’t ruin the weekend. If it exceeds 2%, 2022 should remind me that I have to sell, fix profits and rebalance for peace of mind.
What I wrote in December 2021:
I prioritize emotional health in all aspects of my investment plan. I’m confident that I can win the game by doing so.I only own Index fund I tend to regret many decisions. I don’t want to think about which stock I should have chosen or when I should have bought or sold it. To minimize regret, we continue to buy the same index fund every year and every month.
If you want to overweight a particular asset class, you are investing “aggressively” (eg) Small cap), But nonetheless, one of my main goals in asset allocation is to have as little regret as possible in the future. I overweight each asset class to the point where I later thought I didn’t want to allocate more or less. If the S & P 500 returns nothing for 10 years, I would like to find comfort somewhere in my portfolio so that I can continue to buy US stocks even after such a historic slump.
People have many pessimistic reasons for our society and the world. But even if you think society has declined in the last decade (and will continue to decline), we will continue to buy US stocks as long as the US economy continues to attract the best talent in the world. Medical and biomedical research are good examples. Foreign medical graduates still want to practice here as much as doctors complain about the US healthcare system. Although funding for biomedical research was terribly inadequate, American institutions are still attracting foreign researchers to transform their field. No matter how discouraged college students from pursuing medicine or research, there are still doctors and Nobel Prize-winning laboratories in the United States.
What I wrote in July 2022:
For both crypto and non-crypt investors skeptical about the future of the US economy, there is a Warren Buffett quote. “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts. Depression; dozens or so depressions and economic panics. Oil shocks; influenza epidemics; and shameful President’s resignation. Still, Dow has risen from 66 to 11,497. “
Does crypto have its own dot-com bubble?
What I wrote in December 2021:
Speaking of discouraging medicine, many talented college students don’t need our advice. They know that work in other industries (or other professions in health care) is better than medicines for making money. Software companies have attracted talent because they are some of the largest. The reverse is also true. It doesn’t matter if you love or hate them, anyone hired by such a company knows how to hack computers and our brains.
In the long run, the stock market is driven by profit growth rates, and profits tend to grow as talented individuals create value in society. People who flock to software companies such as Facebook and Square (Meta and Block respectively) Participate in the project Layer 1 or 2 blockchain protocol, decentralized finance (DeFi), non-fungible token (NFT), And the Metaverse.Venture capital firms that have invested in well-known companies have invested more than $ 27 billion into them. “Web3” project In 2021. Most projects will probably fail. Many observers compare the inflow of cash into cryptocurrencies with the dot-com bubble.
What I wrote in July 2022:
In 2022, Bubble popped out.. Software companies and cryptocurrencies are in a bigger drawdown than the wider market (Meta, Netflix, Zoom are currently valuable companies). People have discovered that some of the “talented individuals” can be excellent charlatans, gamblers, and scammers (suggested by Sam Bankman-Fried, founder and CEO of crypto exchange FTX). It has been). Many venture capital firms continue to lose money and most projects fail for good reason (according to many “no” people). Buffett is right again when he says, “Do you discover who is swimming naked only when the tide is low?”
What I wrote in December 2021:
However, some have pointed out that many of the spectacular predictions about the Internet during the dot-com bubble were not wrong, but premature. I can’t imagine a use case for a crypto-related project (DeFi etc.), When looking back on what talented people have achieved to write internet code, I think the new generation of talent is cryptography Web3.. I don’t know which one, Based on EthereumCan be a significant part of the U.S. economy, as talented people are improving their technology and launching interesting ventures, Write about itAnd believe it.
What I wrote in July 2022:
I’m optimistic, so it’s comfortable to buy crypto even if I can’t address the following concerns: (1) The general argument against the dot-com bubble comparison is that the Internet was still useful at the time, but cryptography was not. (2) Will “talented individuals” and cryptography belong to our generation? Isaac Newton and Alchemy?? (3) Bitcoin, Ethereum, or another blockchain will survive and may be useful in “Web 2” companies, financial companies, or the music industry. However, “another blockchain” may not yet exist.
Why did I buy the cipher? Should you do
What I wrote in December 2021:
I don’t mean that I trust crypto projects to solve problems in the internet and financial industry. Children’s friends aren’t looking forward to the society where they live in the Metaverse (you can’t spend time with the kids in the Metaverse!) If all the Metaverse related projects fail, I’m not only happy, but nothing I don’t feel financial pain. But if Metaverse becomes a trillion-dollar industry, I don’t want to regret not investing in it.
After over a year of skepticism, I made my first purchase in May 2021. This is because cryptocurrencies can bring positive returns in the next 20 to 30 years.The price of Bitcoin It fell in half in May and believed that enough people wouldn’t panic or sell. If anything, they bought more. The same is true for Ether. Buy a basket of cryptocurrencies little by little, even if less than 5% of my new savings and prices that seem to correlate could drop by 80% from now until this column is published I will continue to do it. My purchases are mostly automated, so I’m not tempted to “time the market”. A small assignment to my crypto does not move the needle in terms of the time it takes for me to become financially independent. But at the very least, buying crypto does not significantly delay financial independence, even if envy and greed are hindered.
What I wrote in July 2022:
How do you act as an investor if you do not own the crypto Current S & P 500 Bear Market It should be a Lithomas test of whether you should own the crypto in the future. Bitcoin, Ether, and other cryptocurrencies were below 2020 levels because enough people were afraid to sell them. There is no “intrinsic value”, so it could fall further. Therefore, even in the “intermediate case” where the crypto return is two to three times that of the stock, Big ERN doesn’t think crypto is attractive Because of the correlation between its volatility and stocks.
But I have passed the test and I don’t know why I am changing my treatise.Some wise people will find some useful things in cryptography, and I don’t want My FOMO To influence other aspects of my financial plan. I don’t sell cryptocurrencies, but I’m reluctant to buy cryptocurrencies other than Megacap cryptocurrencies (ie Bitcoin, Ether, and maybe Solana) during the winter of this cryptocurrency. .. I’m trying to buy a crypto “basket”, but it’s more like choosing stocks than buying the entire market, and I’m only allowed to buy new lows with Megacap crypto. Hopefully, more diverse and value-oriented crypto investment products will be available. Until then, we enjoy tremendously hopeful limit orders to maintain cryptocurrency quotas and feel good.
Is it time to buy crypto? Do you sell them? Or does it just keep falling irrelevant? The following comments!
