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THIS IS ABOUT my crypto journey. Spoiler alert: I still don’t own any.
My journey began in 2013, when I was serving as an assistant principal in Philadelphia. Since I was always giving advice on our 403(b) plan based on my voracious reading of personal finance blogs, a colleague asked what I thought about bitcoin and whether she should invest. Back then, the price was well under $100—close to $30, I think. I dismissively told her to avoid it. Too speculative. Stocks, I assured her, were a far better place to put her money.
Three jobs later, with bitcoin now more in the national consciousness, I decided to take a closer look. It was 2018, and the price had recently dropped from $15,000 to below $4,000. While that was far above the price at which I deemed it too speculative, I again reassured myself that it was too risky and pointed to the sharp decline as evidence that my initial instinct was correct. No, I told myself, bitcoin wasn’t a wise investment.
Over the past few years, I’ve continued to go back and forth as cryptocurrencies in general, and bitcoin in particular, have hit amazing new highs, including bitcoin’s peak of almost $69,000 late last year. During these buying frenzies, I’d kick myself and calculate what my return would have been had I just embraced the risk, even with a small amount of money.
But I still haven’t invested because I’m also acutely aware of the precipitous falls, with bitcoin under $30,000 as I write this. I still can’t see why this thing should go up, even with the past decade of returns to look at. I’m sure this is some behavioral finance bias. But my gut tells me to stay away.
As I root for my Celtics in the NBA finals, I was hit with a new crypto-revelation. Steph Curry is the face of a crypto trading platform. Multiple sports arenas now have crypto names. Some athletes even get paid in crypto. High school students talk about crypto as though it’s the investment option. There’s a belief that crypto is a sure thing—and that belief is being evangelized aggressively.
The upshot: If someone asked me today whether to buy, I’d be even more cautious. All of this smells like a bubble, one that’ll ultimately damage those who arrive late to the party. Almost a decade after I first thumbed my nose at crypto, I realize I might be wrong. But stocks still strike me as a better bet.
In 10 years’ time, I don’t want to regret not investing in Crypto so I dollar cost average a small amount into BTC, ETH, ADA, SQL, and USDC (a 9% yield). And go, Warriors!
Not a fan of crypto. I own a single share of BLOK just to keep it in sight. BLOK is supposed to focus on blockchain technology, which does have non-crypto uses. However, for now, BLOK price action mirrors bitcoin, which both makes sense yet is disappointing. I was hoping to see more innovation in non-currency spaces, but it may be too soon to expect that to be monetized in any significant way. Meanwhile it seems to me:
Cryptocurrency remains in my ledger of “greater fool” speculative options. It has no intrinsic value and produces no income. The only thing more flawed than cryptocurrencies are NFTs.
I have read that some people attribute the spectacular rise of crypto to the near-zero interest rate, easy credit environment we’ve had for the last decade. One