Crypto!! Is it a Bubble..
A tweet thread dissing Crypto, Personal finance mumbo jumbo.
I recently came across this tweet thread by Monika Halan explaining the pitfalls of Crypto.
While it was a sane advice for the millennials planning to go ALL in searching for the ellusive financial independence, I could not help but notice sheer hypocricy in considering crypto as a bubble as “There is no underlying asset to a digital token, Gold and commodities have intrinsic use.”
Wait what!!
Gold is trading at Rs 4685/ gram. Based on its intrinsic industrial use, it should be trading at 1/100th of that price. And for once, lets say the price of 5000/gram is justified, it still is a commodity and cannot be part of your asset allocations. You don’t have copper, curtains, utensils and clothes in your asset allocation metrics do you!!
Gold is part of your asset allocations due to its perceived value.
u lose the right to be negative crypto, the moment you advocate Gold in the portfolio. Gold has no underlying value, it is a perceived value derived out by collective foolishness.
Point is, if u can value something based on perception and not underlying asset, you have no right 2 question crypto who are taking the same argument to dizzy heights and then some more!!!. Infact some of these coins are actually backed by viable, path breaking apps behind them, what does gold have!!.
Warren Buffet making fun of crypto is perfectly consistent behaviour. He considers gold as lame too.
Please note that I am not saying that we should not have Gold in our portfolio, I am saying if a personal finance guy/girl has the audacity of including gold in the portfolio, he or she immediately loses the right to diss on crypto based on “value narrative”.
Now, the advice to millennials to not go over-board and tread carefully is sane and correct but it did not warrant a tweet thread, the same general advice is valid for stocks and derivatives. If you over stretch, you run a risk of ruin, duh!!.
I personally do not have any opinion on crypto. I am intrigued by the space, the attention it is getting, so far for me, it is just something that moves and in that movement create low risk entry points, nothing more, nothing less.
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