Maybe, the answer is maybe. Last week I suggested that Crypto and Bitcoin was a Ponzi Scheme. The security regulators official definition can be found here. Let me rephrase. It’s not a Ponzi Scheme (per se), but it is worth only what the next person will pay for it! For me that is close enough!
But Larry, you can say that about any asset. Correct, but I know when a company (asset) has earnings (yield/dividends) and free cash flow, I can better determine what its (relative) value should be. Bitcoin is a simple economic model of price behavioural changes in demand relative to a limited supply. In theory, it could go up forever as long as there are more buyers than sellers. When you look at it from this lens, you get a little whiff (stench) of the more speculative asset class that it is versus “the uncorrelated hedge” that some (promoters) will have you believe. What happens to price when all the willing buyers are in? Ask yourself this question before you pull the #HODL trigger?
“According to the scarcity principle, the price for a scarce good should rise until an equilibrium is reached between supply and demand. However, this would result in the restricted exclusion of the good only to those who can afford it.”
Now let’s talk Nobel Prize winning portfolio…
