A couple weeks ago I said that stocks are better than crypto, showing how the large-cap tech portfolio (Facebook, Amazon, Microsoft, PayPal, Google, etc.) has superior risk-adjusted returns compared to Bitcoin. Lo and behold , Bitcoin has fallen 25% since that post. Ethereum has fallen in half.
Being a good investor is not about knowing what to buy, but also knowing what to avoid. When I invest, I am not looking for ‘the latest and greatest’, but something that is a building block or infrastructure of present and future society. Bitcoin has not and never will be that. We’re living in Jeff Bezo’s world. Amazon and Walmart benefited greatly from the pandemic by providing the necessary infrastructure and logistics after businesses were closed, by coordinating the delivery of goods and services to millions of people, whether this is fair or not. Investing is nihilistic in the sense that one’s preconceived notions about what is right/wrong, good/bad, just/unjust are irrelevant.
Do you have to be smart. I think you probably have to be smart to develop/derive the correct conceptual framework as I have done. But there are plenty of smart people, like the tweet below, who are wrong. But I think, unlike theoretical physics (which Eric specializes in), such understanding (such as in terms investing, predicting, understanding how the economy works, etc.) is within the intellectual grasp of anyone of average intelligence.
I agree with everything Eric says about SWJs, censorship, etc., but he is wrong here. How is losing 40% of your investment ‘shorting economists’. It’s more like the other way around. If you want to hedge fiat currency, just invest in tech as I have done. Stocks have historically always beat inflation, going back 100+ years. Way better and smoother returns than Bitcoin.
Say what you want about my take on Bitcoin, but I don’t shift my opinion of it with its ups and downs.
I am still of the opinion that ordinary folks need instruments with which we can short economists in general and central bankers in particular with respect to fiat currency. pic.twitter.com/EAwe7yIyNn
— Eric Weinstein (@EricRWeinstein) May 16, 2021
Bitcoin achieved ‘peak usability’ in 2013 or so, before Silk Road was closed. Around 2011 or so, when it became apparent that Bitcoin was being used to facilitate illegal activity, the US govt. began to aggressively crack down by tracing transactions and bitcoin/crypto-to-fiat flows, so much so that any threat it may have posed is gone, especially with recent technology which makes tracing and de-anonymizing crypto transactions more effective than ever. Rather than trying to make Bitcoin illegal, the feds welcomed Bitcoin because it makes their job easier given the permanence and public record of the blockchain.
It may sound conspiratorial to say, but we really are converging to a one-world government, with the US dollar and federal and economic hegemony reigning supreme, if it hasn’t already happened. The US dollar is the reigning benchmark for measuring wealth, not Bitcoin, and it will remain that way. Save for Russia, North Korea and a handful of other countries, the US can twist the arm of any foreign government and leader to do what it wants. Such countries have to comply for fear of sanctions and other consequences. The consequences of defection can be grave. Look what happened to the Capitol protestors. The feds are still going after those guys. Arguably it was (and still is) the greatest manhunt in the history of the US justice system (even Confederates were pardoned, and after the Revolutionary War, Loyalists were not charged either but given the option to return to Britain or Canada). Anyone who attended, even if they did not infiltrate the boundary of the Capitol itself, is probably on some sort of blacklist and their info in some database.