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I decided 10 days ago to make a small (0.2% of my portfolio) in Ethereum through the Fidelity ETF. I decided on Ethereum over Bitcoin only because Ethereum had fallen in price quite a bit at the end of January.
Just curious how many of you have any crypto investments and if so how much of your portfolio and which crypto currencies (all Bitcoin?)
I must say that I’m a little more exposed to this industry as my son is with a cryptocurrency brokerage and digital asset organization. Not that I understand it well at all.
I’ve been studying Bitcoin since 2022. I own some and will continue to dollar cost average into more. They say it takes 100 hours to understand it. I don’t know if that is true, however, it does take a while. Once you understand it, you’ll be amazed at how it works. I run a Bitcoin node, on a little tiny Umbrel computer on my desk, that allows me to participate in the network. Simply put, there is Bitcoin and everything else. Many experts in the space consider it digital gold, so to speak, and now people like Larry Fink at Black Rock, Paul Tudor Jones, and Ray Dalio all own it and believe in its future. It’s used as a means of exchange in many parts of the world where the money is broken and the currency is massively debased every year. Here in the U. S., we are blessed with the reserve currency and have easy forms of payment so people wonder, why would I need it? But to an entrepreneur in Nigeria, a person in Venezuela trying to protect what little wealth they have, for someone trying to send a remittance to Honduras, well….Bitcoin is very, very useful, a superior form of money. All you need is a smartphone and you can send Bitcoin to anyone in the world, without permission from a government or bank, peer to peer, for virtually nothing. What Bitcoin is, basically, is a new technology for sound money. I’ll stop right there and recommend two fantastic books. The first, Broken Money, by Lyn Alden, is a masterpiece regarding the history and evolution of money with a great explanation of how our fiat money systems worldwide are failing us, and how Bitcoin works and can help. The other book, which was recently published, is an easier read, but maybe more compelling, called The Big Print, by Lawrence Lepard.
If you’ll indulge me a little more, let me tell you how difficult it is to send $8,000 to a family member, in this country, who needs a bridge loan. I couldn’t use Venmo because the amount was too high. Same with Zelle. So, I sent a paper check via the U. S. Mail (Priority mail). Then, on the other end, the check couldn’t be deposited using the J. P. Morgan phone app. Again, too much. The person had to go to a local branch and deposit the funds. It’s 2025 for Pete’s sake. If we both had Bitcoin Lightening wallets on our phones, I could have zapped him the money and voila. No banks, no permissions, just peer to peer for a few pennies. This is happening all over the world now, however, not much in the U. S. because of a lack of use cases. But that will change over time.
My second career was teaching computer science at a local college. In 2010 my students asked me to explain bitcoin which had just run up to $1000. I explained blockchain but I didn’t know how to actually purchase a bitcoin. To just experience it, I invested $100 (1/10th of a bitcoin). Back then, to purchase that piece I had to contact a wallet company and tell them I wanted to purchase $100. They gave me an account number at Bank of America where I needed to deposit my money. I then had to send them a picture of the receipt. Sounds like a scam but I was successful and relayed my experience to my students. I then forgot all about it. Years later when the price started to rise I decided to log into the account to ensure my 1/10th was still there and found out I lost the file with my password. Bitcoin kept rising and when it got to $60,000 I searched every folder and backup drive I had and finally found the password. I still have that 1/10th and I’m waiting to see if it goes to $500,000 or even a million. If it does, that would make a great story.
The fact that you found your password makes it a better story!
No crypto and will never have any. I’m 52 with a diversified stock portfolio of mostly dividend growth stocks. Don’t buy things you don’t understand. Coke, Pepsi, P&G, JNJ, ADP, Amazon, and the list goes on, are all things I understand, use every day, and have decent moats for the long term.
If I want to gamble, I take out 100 bucks, go to the Indian casino, and put it on red or black. It’s quicker, easier, less painful, and has lower transaction costs. I put a $100 futures bet on a friend for rookie of the year in the NHL as well. That one probably won’t work out, but that’s OK, it’s been a blast following it.
Sitting there watching the price of BTC just buzzsaw all over the place doesn’t sound like any fun.
I totally agree with all of your points. I tried to look into crypto to try to understand it…. total confusion. So, none of it in my portfolio
I bought $2500 worth of crypto back in January of 2018 because that’s all I could afford to lose. By December the value had gone down to $292. It’s been a real rollercoaster ride since then and it’s worth around 10k now. I promised myself that I will withdraw my initial investment when the value reaches 12.5k because I’m getting too old for roller coasters. It is fun to watch though and it keeps me from fretting over my retirement accounts.
I have 10% of my investable assets in Bitcoin. I wish I had more but I’m entering retirement next year so I am erring on the conservative side. In my opinion everyone should have a minimum of 5% allocation to Bitcoin.
David – more aggressive than I expected to hear but you’ve probably done well so far.
Hi Doug. I hope you and your family are doing well.
You are right. The position size has grown to 10% of overall investment funds because of the remarkable performance of Bitcoin since I purchased it. BTC is the only play in the space I own (I suppose I would be considered a maxi, although that’s an outdated term – I’m becoming outdated too :-)), I do think the 5% position espoused is reasonable, but because of the volatility I understand why others would find it a bit much. I keep my BTC in cold storage but if in-kind redemption becomes real I would likely switch to an ETF for ease of inheritance reasons. One interesting unexpected benefit of holding BTC for the long-term is it has made me want to learn things I would’ve never otherwise studied.
I hope you continue to do well. May God bless and keep you always. Take care.
At the height of Covid boredom, my son talked me into buying some Bitcoin and Ethereum for a total of around 1% of the portfolio. We sold out of the crypto maybe 15 months later, as we needed prompt cash for a house purchase. The crypto about doubled our money even after accounting for the high transaction costs and capital-gains taxes.
While I’d be comfortable with a small Bitcoin or Ethereum allocation, I prefer gold as my contrarian holding. I have had a small allocation of the ETF GLD for 10 years. In recent years, “the rock even beats stock.” However, I am not buying more of these assets with their elevated prices, but rather selling is increasingly tempting.
The challenge with these contrarian investments is what to do with them, and do you ever sell? If viewed as an insurance policy against the zombie apocalypse, as Jonathan has sometimes pointed out, what we really need is gallons of drinking water, seeds, dehydrated food, ammo, and a pallet of toilet paper.
Bitcoin – 0.85%
Ethereum – 0.35%
Cardano – 0.04%
Crypto – Total % of Investments – 1.24%
I bought all of my crypto during the mania of 2021-2022. Crypto are my only FOMO investments. Otherwise, I am a vanilla total US stock, total US bond, and total international stock index investor.
I chose these three cryptos because I wanted to stick with large market cap cryptos, so Bitcoin and Ethereum were logical choices. I chose Cardano because it was created by the co-founder of Ethereum.
Why did I buy crypto at all? Because young people told me it was revolutionary. Why have I sold a small amount of Bitcoin and Ethereum over the past couple years? Because old people told me it has no use and can’t be properly valued.
I will probably hold on to my remaining stash. I like it because it feels kind of contrarian and doing something different feels good. It’s a small allocation and small price to pay if I’m wrong.
Well you’ve probably done quite well so far.