RE: Why I Buy Bitcoin During Crashes Despite Calling it a Bubble

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Why I Buy Bitcoin During Crashes Despite Calling it a Bubble

in bitcoin •  7 years ago  (edited)

Hey man thanks for the vid! It really helps to hear your calm and objective pov during events like this. So I have some questions for you :

  1. You talk a lot about portfolio allocation and being diverse. Could you share a rule of thumb? How would you be positioned in the distinct cases a.cash-crypto and b.cash-crypto-stocks ?
  2. You also talk a lot about the 'valuation' (or lack thereof) of Bitcoin. I am wondering (disclosure: I am neither experienced nor do I have econ training) couldn't the total hashing power of the network provide an estimate for the 'actual' value of Bitcoin? I mean, shouldn't the price of Bitcoin reflect the costs of mining and related expenses?

Thanks a lot!

bitcoin
7 years ago by

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      ·  7 years ago (edited)

    I am surprised to find the labor theory of value re the Bitcoin price actually making an appearance in the commentary of a crypto video. This was first made famous by Marx, and then allegedly, disproved by a few late 20th century marxists. I believe it does make sense, but it's a bit of a headache on how to make the calculations. But for sure, any value over and above the real value is a purely speculative value. And before anyone complains that speculation doesn't have a value, well, that can be gone into elsewhere.

    Now to the issue of the portfolio. I have read some pundits who say you should only put 2% of your crypto investment pool into any one 'position'. This is investment talk for what I assume means 'coin' or similar. That made me laugh. So you end up with a portfolio of fifty coins? I don't want to fuss with that level of detail.

    So my strategy is to choose four coins and risk them accordingly. Tier 1 is a real solid performer, and tier 4 is a bit of a speculative punt. From your crypto pool you then allocate 55%, 30%, 11%, and 4% respectively.

    Note there are two, or more, pools. One of these is crypto. For me, I do 50/50 of my entire investment pool. This is a big exposure. But I have a big confidence in a crypto future.

    Hope this helps.

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