Bitcoin already has a track record of beating all other financial investments.
So, what happens if this continues?
What happens if people realize this?
Why invest in stocks? Buy some bitcoin.
Why invest in bonds? Buy some bitcoin.
Why invest in gold? Buy some bitcoin.
and then
Why have money in the bank (savings account or CD)? Buy some bitcoin.
Basically, if this trend continues, Wall Street is doomed. (ok, it already is, but this time, it really is)
Bitcoin becomes World Reserve Currency
If bitcoin becomes the world reserve currency, then bitcoin's value grows along with all the nation's GDP.
The world makes more goods. Bitcoin supply stays the same. Bitcoin goes up in value.
And, unlike the financial instruments offered now, the banksters don't take a cut. The banksters don't get to add a fee. The banksters don't get to inflate it away.
You might miss out on a specific new industry taking the world by storm, but you will get the average of all growth, world wide. And that is way more than the S&P 500.
It would be like holding dollars in the best savings account back in the 80s. Basically free money, while you held the best and most liquid asset. There was nothing better.
Soon (or right now) there is no better, more liquid asset than bitcoin. Why would you put your "money" anywhere else?
Stocks are a weird thing to be investing in
If the stock market was normal, what you would expect from a stock is for its value to stay basically flat (the value of the company) and for you to get a part of that company's profits. Since big corporations are not very efficient, that dividend would not be that big a percentage.
The only thing about buying such a stock, is that, once you buy it, it is free money. And it took a long time for regular people to understand this and get into stocks.
But, after that, they all got into stocks. Every pension, which turned into an investment account (401k, IRA…) got diverted into stocks. And this is a big reason that the stock market is so high. And also, why the boomers retiring will mean the stock market plummets.
The stock market has no fundamentals anymore. It is all speculation. Apple is not worth anywhere close to its market cap. Neither is Tesla. But those are the prices right now. And it really is because everyone else is in the stock.
However, stocks are not a good place for retirement funds. A company rarely stays in business long enough for you to retire. So many companies have come and gone. So, you can't buy a stock and just hold onto it. You have to actively manage it. And still, the market could crash tomorrow.
Bitcoin is like holding dollars that do not lose to inflation.
A far superior product. And there is no speculation, where money moves into and out a market sector. It just stays as money.
REITs and Rental Property
Rental property really didn't become an investment class until about the 80s. It was a thing, where a guy had a few houses that he rented out before then.
Now, people are all about getting into real estate. So much so where Black Rock (and others) are buying up rental properties and packing them up for investment.
But, as the market turns down. Higher interest rates and higher prices equalling less demand and less profit margin means that many people have been trying to get out of their REITs, and Black Rock has to limit withdraws from the trust (basically, you can't sell/get out of it)
And, what happens if your entire portfolio burns down? What if your rentals are where T.H.E.Y. want to build a 15 minute open air prison? So, it all burns down, and the insurance doesn't have enough money to cover it. Or, if the anti-Trump riots start breaking out, and more places are burnt down.
Why own these things at all. For, what is less than 4% today.
Bitcoin is performing better, and is completely liquid.
Also, there is no doubt about who owns a bitcoin. Unlike a house where you have a tenant that is fighting being evicted.
So, what is a financial world like, where holding bitcoin is the best choice?
Where there really is no second place.
You can have rentals, if you enjoy renting places and have extra houses, or something. But, you will have to love it, because just parking your money (money? haha, that is bitcoin) in bitcoin will give you a better return.
Why would you invest in an old corporation? It isn't going anywhere. It is not innovating. It won't be keeping up with bitcoin. So why bother?
And the questions of everything Wall Street sells gets the same answer. Why bother?
In my opinion, in a very short time, Wall Street is just going to be a bunch of empty buildings.
Why invest in a derivative, when you can have the real thing? (for less, with no brokerage fees)