If Stocks Aren't Allowed To Fail, How Can You Say Bitcoin Will?

in LeoFinance2 months ago

Hey Jessatoshis

I recently went to see my investment broker to chat about a few of my funds. He knows by now I am a Bitcoin bull for years now, and during a time like this, those meetings tend to be in my favour. He mentioned that one of his older clients, a 70-year-old lady, pulled her funds from his management and moved it into Bitcoin.

I laughed and said, that lady is making major gains, bro, and you can see the look on his face of discontent. Money managers are in a bit of a pickle; sooner or later, they will have to capitulate; if not, people will move their funds.

If you're not going to offer Bitcoin exposure, eventually, your competitors will and put you out of business.

My dad and investment manager are very much Bitcoin haters yet know nothing about it. They still talk about the major risks involved, but they only see risk because of their short time frame arguments. Yes, Bitcoin has cycles, but the overall trend is still a 45-degree angle and to the right.

Money managers are becoming useless

Think about this, if people could manage their own money and their risk-free rate is a deflationary currency like Bitcoin, what would be the need for money managers?

Why would I need them if my purchasing power is protected by the currency I store my value in? Bitcoin effectively renders them useless, and they will naturally fight against it because it's against their self-interest.

If markets aren't complex and difficult for the average person to understand, they will always put that responsibility on a 3rd party and pay the premium.

Bitcoin-v-stocks.png

Millenials are becoming their own money managers

I know this is a broad generation action, but on the whole, millennials aren't big asset holders; they don't own real estate, bonds, or large positions in stocks, and their access to credit is shit because they don't have assets.

It's a catch 22; this has forced many of us in this generation to look at trading stocks ourselves, with the likes of Robinhood becoming the battleground for these young traders.

If we look at the explotion of cryptocurrency, millennials dominate this space as it's an immerging asset class they can get into at any price, and it's a liquid market.

Millennials and Gen z want instant access; they live on the internet and are happy to manage their own money. That further erodes the money managers customer base, which is why they hold onto these cash cow boomers and scar them to stay out of crypto.

That and the fact that if you're older, you've enjoyed a 40-year bull market in stocks and bonds, so why would you want to get into a market where drawdowns are a real concern.

Since boomers rely on the stock market for funding their pensions, governments know they cannot allow it to take a downturn.

If we look at all that has happened in the last year and stocks still haven't gone down, you can see the commitment governments have to print to keep stock markets afloat.

Bitcoin takes the QE stock model and ramps it up to 100

Stocks benefit from money printing; I think we can all accept that as a fact. As more money is created, it needs to find a home, and stocks have been among them. Bitcoin is engineered to work on this same principle, but since no new supply can be created, as in the case of stocks, it has a much stronger reaction to money printing.

So I don't understand this argument that Bitcoin dies if stocks don't. I am not saying they are tied at the hip, and they can't do different things.

But what I am saying is for Bitcoin to die, there needs to be a drastic change to economic policy. A policy that will affect the stock market, which is a systemic part of the global economy and cannot be allowed to fail.

So while Bitcoin will probably correct going into 2022, I cannot see the overall trend going anywhere but up in the long term.

Have your say

What do you good people of HIVE think?

So have at it, my Jessies! If you don't have something to comment, "I am a Jessie."

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The Fed is pretty out of options so what is keeping the stock market propped up is fiscal and monetary stimulus from Congress. Its the reason why Powell keep telling Congress to do things.

I think you are a little incorrect about QE as it is deflationary. The reason why people are treating it as inflationary is because of their misunderstanding and how they promote it to the public. You can read some notes about what QE actual is:
https://stevenvanmetre.com/2021/04/02/macrovoices-notes/

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I think it's quite complicated and the arguments are actually just bad categorising.

  • Is technology a growing deflationary force? - Yes there's technological deflation
  • Are wages flat or deflating - Yes in purchasing power wage deflation
  • Are assets inflating - I would say so there's asset inflation
  • Are goods and services inflating? - Yes I would say comparing to your purchasing power it is
  • Is bond repurchasing technically deflationary - Yes
  • Is debt blowing up deflationary - Yes there's lots of debt deflation
  • But what are banks doing with the cash and how much does the fractional reserves they keep even matter?

We can debate this and that and I get it but for the man on the street, they are living in inflationary times, the rich definitely are getting all the benefits of deflation.

The economy shouldn't have to be this complicated and the fact that both our opinions are up for debate should indicate how obfuscated these rules are and how few can even understand them

Also, check out this rubtutle on the van metre theory -

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I took the time to watch the video so I understand the issues. The ultimate deciding factor is whether or not the banks want to lend. If they don't then everything Stevan Van Metre works out but if they can lend and take money out, then it will be inflationary. I don't think I heard his view so I think its good to know.

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Exactly and we don't know what each bank is doing, we can see that real estate in certain sectors are moving up as well as stocks so I assume that's where they are lending, so while we don't see inflation in some parts, we are seeing inflation in stocks and real estate

QE by definition is not inflationary but what the banks do once they free of debt, is most likely inflationary, they need to do something with that money, sitting on money doesn't bring them an income

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This is totally on point. I can't remember if you saw my post last week about the conversation I had with my broker. He was totally clueless and I don't think at this point he has any desire to learn. It is sad. They have been living pretty good lately (2008 the exception), but they are going to find themselves in a pickle before long.

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Lol I went to see my broker last week and I said you suck, I've been making gains in Bitcoin way more than you guys and his like its risky and im like you need to research and eventually capitulate or go out of business.

They've been pocketing 2 and 20 for so long rebalancing bullshit portfolios 60/40 splits and enjoying commission, there's no incentive to make us money

Sure its a mania now he said a pensioner he manages took out 66k USD to put into BTC lol I said that old lady is smart shes making gains lol

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Yeah, that is just nuts. It is too bad they are so entrenched. I was explaining to my broker the gains I have made on my NFTs and he was just so clueless. Yet he would be more than happy to recommend some random fund that he gets a huge commission on!

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I have been seeing some trippy things out there. Guys who have been in crypto for a long time liquidating motorcycles and other stuff to get more money into crypto now. Crazy stuff.

I feel as if there is this subconscious feeling that we're all realising that currency is becoming useless and we need to get out, people are realising it may be not on a conscious level like some of us, but they are buying assets or consuming anything with their money because they feel the value they holding is being destroyed so why keep hold of it

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Yeah I think that is the case but in general in the United States the mass majority of people are operating at a financial redline. Everything is about making payments..... people are super leveraged out so as soon as any money comes in they spend it.

Plus they hand out new cars here like they are Halloween candy. guys like us don't qualify though. We are considered degenerates in most social circles ..... lol

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I think that is scary, if so many people are living on the fringes and jobs are the only thing that keeps this thing going as jobs erode all these people become workers of the state, indirectly, directly or by some program. The more state income people get the weaker the currency becomes, I guess that's what they want in a sense.

LOL banks would look me over for a loan any day even though I have equity they'll rather take the guy with the solid pay cheque. Doesn't phase me much, that's a suckers bet

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Being involved in Bitcoin exposes one to a better form of money which doesn't necessarily makes one an expert but gives that sense and ability to manage one's funds without the need of money managers, I see them becoming redundant as they continue sticking to fiat.

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I think so too, I think even if you HATE bitcoin, just explore the arguments we bring, perhaps you prefer gold instead. It doesn't have to be Bitcoin that is your way out it could be real estate but I encourage people to think about what's happening and then take on their own risk.

If they choose to do nothing that's fine too, to each their own. I think we should all be allowed to do with our money what we please even if its a bad decision. Like people think me buying BTC is bad, but I don't see i t like that, just like I think holding fiat is bad, they love it

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I think we should all be allowed to do with our money what we please even if its a bad decision

That is the point, there are so many benefits to Bitcoin besides the monetary value that makes it appealing to us.

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With coinbase listing and starting trading this week, there's no stopping Bitcoin now. Unlikely to have any draconian regulations anymore.

I am also thinking that, once coinbase IPOs it won't be long before others want to do the same or we see crypto SPACS taking companies public. Then they fall into index funds and also I am sure well hear a major bank has taken a position too. I also heard Rumours wallmart is making 1 billion dollar position which is insane

I agree, all the new stock and crypto apps are fueling this golden age resurrection!
I agree if btc were to “die” it would drag stonks down with it kicking 🦵 and screaming! 📢

BTC has been a strange journey from internet outcast and labelled as drug money to this major macro player its the currency with the 18th biggest market cap in the world and it will probably overtake the next 5 very soon. It's quickly becoming systemic and so many people are getting involved that it now becomes part of the system before it reshapes the system

interesting article, thank you for sharing

Thanks for taking the time to check it out

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Makes sense to me. And yes, psychologically, it is hard for the "old dogs to learn new tricks". But yes, it is the challenge and freedom to directly manage ones affairs. And one thinks about the old model, just buy into funds/pensions for companies that extract and pollute and mistreat their workers ... many raided other companies, bankrupted other pensioners, or left the country entirely. The whole thing was a bit rigged when you really think about it. It was an "ask no questions" system... we need to get to an informed economy with deliberative democracy, where people can make their money support things they believe in. So much to do !!

Yeah the old way granted gave us a lot of modern advances but we didn't take into account all the unseen losses and moral hazard you mention here. crypto might be a retail frenzy but at least you're responsible for yourself and you have control over how you fuck it up or not

I think this concept has not crystalised yet but once it does man oh man are we in for drastic changes

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thank you very much for the post,have a great day and good mood

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