Why Bitcoin?

Dan Murray · May 31, 2025 · 34 replies

I’ve been investing since the early 1980s. I have a business degree and took investing classes. A close friend of my parents wrote the first investing book I read at age 10, called Stock Market ABC by Joanne K. Friedlander and Jean Neal, published in 1969 and given to me on my 10th birthday in April of that year. This started my interest in investing. I also have a background in technology, going back to 1982. I started a technology consulting practice 15 years ago and continue to be a successful player in the field. This combination of background and interests was the genesis of my interest in Bitcoin. I was searching for a way to mitigate risk in my portfolio. Bitcoin’s design makes it an interesting investment option for those seeking a hedge against currency debasement and the irresponsible fiscal governance most countries suffer. With a relatively small investment in Bitcoin, you can add alpha to your portfolio safely and innovatively. If you want to know more about it, please ask questions here, and I’ll respond with advice on books, websites, and podcasts you can consume to increase your understanding and appreciation of this new asset.

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Howard Schwartz

1 year ago

In the spring of this year I hired a young fellow named Matt to paint the walls of my basement in preparation for selling the house. He is a Bitcoin evangelist and would not stop pitching it as the road to astonishing riches. I took a look and discovered that the price of Bitcoins had dipped and it looked like an entry point so I bought $5,000 worth of the Fidelity Bitcoin ETF. A few weeks later, it had gone up around 20%, so I sold out and made around $1,000. So, you could say that based on the astronomical rate of return I earned it was the best “investment” I ever made. You could also say it is not an investment at all and I could have just as easily lost $1,000 or my entire $5,000. Even though I made a little money I decided Bitcoin is not for me.

Mark Crothers

1 year ago

I think of Bitcoin as a multilayer bet. The first punt being made is that the price will keep inflating over the long term. The second punt is you’ll find a counterparty in Bitcoin’s speculative inflated future. But underneath those bets is a deeper one: what if the current financial system has fundamental problems? What if governments debase currencies, banks freeze accounts, or payment processors become gatekeepers?

Bitcoin is an outside bet that a decentralized alternative has value and a hail Mary around future valuations- basically insurance against the existing system failing or overreaching and a FOMO soother…Whether that bet pays off is anyone’s guess. Although I’ve taken a bet, it’s with play money only. I think of it as buying an exotic call option, any other framing seems illogical to my mind.

neyugn

1 year ago

I’m a tech guy. So here’s my $.02 opinion

When you are buying 1 Bitcoin, you are buying a prime number (if you don’t know what’s a prime number, your children or grandchildren might be able to help).
Crypto currencies (albeit Bitcoin, Dogecoin, Ethereum,…) facilitate transaction much quicker than current financial transaction. Is that a prime reason (no pun intended from the previous bullet) to get into this hype ?

Change my mind.

Grant Clifford

1 year ago

Some thoughts to add to the conversation:

In Dan’s original post he offers to share his knowledge of Bitcoin (BTC) to those who are interested. I believe his offer admirable and in keeping with the educational spirit of Humble Dollar.
There are indeed many pitfalls in the wider ‘crypto’ space, some of which have been noted in the comments below. I believe Dan’s intent is to share resources for those looking to learn more and I hope this will help them avoid those pitfalls.
Dan references only BTC and not ‘crypto’ in his post. I believe this was an intentional distinction, Dan feel free to correct me if I am wrong. BTC adoption is increasing rapidly, and publicly traded companies (currently 140) include BTC holdings as part of their treasury strategy. Future adoption by S&P 500 companies is predicted to increase significantly (currently Tesla, Coinbase and Block are the only BTC holders). The BTC distinction in Dan’s post is important because I personally would advise against investing in the ‘crypto’ world of alternative currencies, coins, tokens etc. and leveraged proxies for BTC, such as Strategy (MSTR) referenced in a comment below.
In Dan’s post he is not suggesting that BTC become a primary investment strategy. Over the years I have been visiting the HD website I have noted that many readers have indicated they do not follow the guiding principles of low cost diversified indexing and bonds for their entire portfolio construction. They also participate, in limited fashion, in alternative investing strategies in order to add alpha to their portfolios, for the fun of investing, or other personal circumstances. I personally recommend to friends and acquaintances the investing strategy of low cost diversified index funds and bonds advocated by Jonathan Clements, and other ‘truth tellers’ for the vast majority, if not all, the value of one’s retirement portfolio. I also recommend that if risky assets or strategies are adopted, then to make sure that potential losses will not significantly impact your retirement plans should the risky investment(s) in fact go to $0.
The vast majority of BTC holders are not criminals. BTC is increasingly being avoided by criminals because of its public, traceable ledger, which is monitored by financial intelligence services and gives law enforcement the ability to trace transactions. Criminal BTC transaction volumes have shifted significantly to other forms of ‘crypto’ where transactions are untraceable, which is also the ‘crypto’ space I personally recommend avoiding.
It is rumored that Vanguard is considering launching a BTC ETF. Vanguard CEO Salim Ramji oversaw the launch of BlackRock’s bitcoin ETF (IBIT) in 2024. (Disclosure: IBIT is the vehicle I use for my limited BTC holdings. I do so for simplicity and tax reporting purposes).
This is not a sales pitch for BTC and is in fact a warning against ‘crypto’ at large. If one is considering entering this space heed the warnings and be prepared to walk away. If you don’t walk away, do your homework (take advantage of an offer like Dan’s above to ask questions), limit your exposure, be disciplined and expect volatility.