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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.
Coinbase, a crypto company which was just added to the S &P 500, reported it was hacked resulting in losses in the $400M range. You can read the details here: https://finance.yahoo.com/news/coinbase-hack-rocks-company-led-213619102.html
I don’t understand why/how employees in India would have access to customer data which they could steal and sell to thieves.
And yet the administration on March 6 issued Executive Order establishing a Strategic Bitcoin Reserve 🤷♂️
I haven’t directly invested in bitcoin, but I did buy a small amount (less than .25% of my investment account) of BITO, a bitcoin ETF. Thus far, the investment has returned between 3-5%, PER MONTH. I consider it a high risk investment, and limit the investment accordingly, but the initial investment is about paid off at this point.
For the skeptics…I allocated 5% of my portfolio to BTC five years ago. It’s now 11% via growth. It’s not that the rest of my portfolio hasn’t grown. I carry many T-bills and low-beta dividend stocks in tax-deferred accounts. Bitcoin is my Alpha.
I invest in Bitcoin and Solana. Bitcoin is the only hard asset in crypto. Ethereum is transactional, as is Solana. Solana can handle much higher transaction volume. I view altcoins (ETH, SOL, others) as unregulated securities without 3rd party financial verification, hence much riskier. My advice is to buy Bitcoin and hold it for the long haul. I’m up substantially over the past five years. If you look at the CAGR of Bitcoin over the past decade, it’s a top-two asset. Eight of the last 11 years, it’s been the #1 performing asset class. In other years, it’s been dead last. But, even with those down years, BTC has a CAGR of over 60%. I view BTC as a long-term replacement for Treasury Bonds. The dollar may be in its terminal decade if the Legislative Branch doesn’t become fiscally responsible. There isn’t much evidence in that direction.
Three or four years ago I bought $10 worth of bitcoins just for fun. It dropped to $6.00 and now it’s worth $23.00. No idea what it actually is.
One of these days, an entity will create a workable quantum computer with enough Q-bits to take on big problems. All encryption will be broken, and eventually the blockchain will be hacked.
Some say we are already here.
Crypto?
I don’t even do Real Estate.
I’ve no interest in owning anything whose value is solely determined by what someone else is willing to pay for it. What is the current PE ratio of bitcoin anyway?
Also, I feel like I’ve won the money race, as we have more than we need to live out our lives in the manner we are accustomed to. So why keep competing?
Finally, what was it Warren Buffett said about when to be fearful?
I’m not passing judgment on how others invest. Crypto just ain’t for me.
No thanks. Gold and crypto are for other people, not me.
At present I do not own crypto. I’ve been concerned by the price volatility, security, and lack of regulation. I also did not want to get the possible scrutiny that may come with checking that digital asset question on the IRS forms.
I did decide that if it were to purchase it would probably a modest 1% of my portfolio investment, but I’d review transaction costs, etc. before making a purchase.
In place of crypto I decided to own a fund of mining stocks, and an energy sector ETF comprised of 25 companies. These two funds total about 3.5% of my portfolio. The energy ETF provides a reasonably steady 3.0% dividend. The mining a lesser dividend but better overall gain. The most recent gold rush has been helpful.
At one time I did give serious consideration to mining bitcoin but concluded any efforts were better spent on other endeavors.
I once owned a surrogate for physical gold. After 10 years I decided to switch to the mining fund because of a growth slant. It was a good decision. However, I consider these types of alternative investments to be part of the ballast in my portfolio. Nothing spectacular expected and there may be long periods of quiescence. Combined, I do want them to do better than cash, bonds and inflation. They may not.
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.