I’m going to keep this relatively short but I get asked so much about what I think about bitcoin that I thought I would sum it up once and for all…
So look, was there money to be made with bitcoin? Yes, as it turns out a lot.
Did that make it a good investment at the time, or even now? No, it did not.
It was never the smart money and any real investor will tell you the same.
Bitcoin in and of itself has no intrinsic value. “Intrinsic value” which is a word borrowed from real investment strategies like Value Investing, means the actual true value.
Let’s take gold as a good example.
Many people like to try and compare Bitcoin to gold which is really very stupid. Bitcoin does not posses the properties that gold does.
Gold has seriously insane and valuable properties that can and are used in manufacturing, medical devices, technology, and the list goes on.
A single gram of gold can be beaten into a sheet that is 1 square meter in size.
Approximately 16 g (0.8 ounce) of gold were used in every McLaren F1 engine.
This is a commodity which has real, intrinsic value.
Bitcoin only has speculatory value.
What this means is that Bitcoin is only worth what the next guy will pay for it. Nothing more.
If someone else is more foolish then the last person to buy bitcoin and pays more the price of bitcoin moves up.
The moment people realize that it’s a bubble they run for the door and the price crashes.
Bottom line with Bitcoin for my investment portfolio is this: I invest in assets and buy into them for below market value with a considerable margin of safety.
I do not speculate, gamble or play with money.
I follow a very similar strategy for my investments as the greatest investors of all time, namely: Warren Buffett, Seth Klarman, David Einhorn and so on.
Can you make money with Bitcoin? Yes, but the risk outweighs the reward for my investment portfolio.
The only caveat I have on my Bitcoin, or rather Crypto position, is that there may be one coin that does become accepted and used by the mass population. If there is real research and cause for you to believe in a specific coin then perhaps it does fit your investment portfolio.
For me however I sooner spend my time researching and buying companies, but I can see how some may rather spend it investigating alt coins I guess.