Bitcoin is not a hedge against uncertainty, a bear market, or recession

Saw this post Incoherence

There’s a wing of the Bitcoin faction who are bullish on crypto but bearish on the US and / or global economy. Or, is it a wing of the economically bearish faction that is bullish on Bitcoin? In either case, it’s a weird mentality to have and does not at all line up with how things actually work.

Bitcoin is almost perfectly correlated with the Nasdaq 100. Growth investing is growth investing. If people are excited about tech, they’re buyers of both. And the alt coins will, in the end, do whatever Bitcoin does. Not hourly or daily, but generally. Directionally.

So Mr. Butthead is finally coming around that Bitcoin, the economy, and stocks are highly corrected? Soon he will learn, what I have been saying all along, that stocks are superior to Bitcoin.

If you spent ten years fighting one of the greatest bull markets for stocks of all time between 2010 and 2020, and you lost all of your credibility and followership (and subscribers!) as a result, “pivoting to crypto” is the logical move. Starting over. Don’t associate me with telling you to fight the Fed since Dow 10,000. Associate me with the coins now, I’m doing coins! All coins!

If this were true Peter Schiff, who has been wrong about almost everything, would have no followers, and blogs like this one and others who have been right for the past decade, such as James Altucher, would be more popular. Entertainers are paid to entertain, pundits are paid to pontificate, and money managers are paid, in theory, to preserve and or create wealth. They are different skillsets. The people who are good at entertaining tend to give poor financial advice, or at least the skills are not correlated.

If there’s a massive crash and recession, there’s going to be a lot less fun and games to be played with inflated coin prices and collectible bullsh*t that no one really needs. People are going to batten down the hatches and stop lighting their money on fire at OpenSea or Coinbase.

Then why were you hyping Bitcoin last year when it was >$50,000?

Here he is in August 2021 making a case that the price of Bitcoin is uncorrelated with the economy or ‘fundamentals’, and that it could go to $100,000 on hype alone. Our memories are not as short as his. Anyone who bought Bitcoin would be down at least 24% today or as much as 45% had they bought at the peak, versus only being down 14% had they bought the S&P 500 at the very peak.

As capitalism becomes increasingly smart, it stands to reason that asset allocation will become more fickle, which means fewer assets will appreciate even if the overall stock market and economy is growing. This is why index fund ETFs (like SPY and QQQ) are better than ever as a way to create wealth even in high inflation. Because this market is so capricious, that the only way to avoid missing out out is to cast the biggest net possible, hence index funds. Right now, energy stocks are doing well, but it will be short-lived. People want the silver bullet to getting rich, but sometimes it’s boring old index funds (or 3x ones).

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