Hi 37 and happy,
I appreciate your posts. I learned more about bitcoin from it.
I agree with your writing in the most recent post. However, your statement below make it sound like preparing for doomsday scenario.
"And by the way, have exposure to BTC via a listed ETF or index fund will not provide the gains or protection that owning BTC directly will provide should some types of scenarios come to fruition"
This is the quote from your post.
Thanks Freedom, and very welcome.
Regarding the "prepper" comment, don't worry, I'm not one of those guys, in the sense that I am locked up in some remote cabin with guns and ammo and canned tuna, almost "hoping" for the end of the world to occur.
But I have seen enough in history, including my own family history, to see how unexpected circumstances, trends, social and political movements, can "wipe out" the wealth of an entire family or class of people due to lack of diversification or lack of protective options. Some extreme examples I do factor in as slim (but not impossible) possibilities when looking at "wealth survival" include:
- a country's banking system (or a significant player in that system) entirely collapsing due to technology failure. For example, imagine (lets say during a time of war) if nefarious foreign actor released (or activated) a series of steps to delete financial data, deactivate or impair IT systems, etc in another country. There as so many possibilities and ways to do this. We are operating on highly integrated IT systems, parts of which are 40+ years old. So imagine if you literally cannot access your bank accounts, bank literally has no record (or incorrect records of the assets its holds for you), everything seizes up and nothing can be electronically transacted via our traditional electronic banking system. Small chance, but would be absolutely devastating.
- a country deciding to compulsory acquire the private assets of certain listed companies (or the companies themselves). Certainly possible during a time of war or economic collapse, and has happened in the past
- a ETF you hold (or private fund you are in) collapses, either due to fraud, misuse of derivatives.
- a government decides to suddenly impose significant tax on wealth held in stocks, funds (or on their dividends). Very easy to do, and very easy to enforce and impose.
- a total "lockdown" on the ability to transfer money outside of the country (with the host country rapidly declining economically or very undesirable to remain located in). Easy to impose to the extent you control the banks and have oversight of electronic transactions.
I could go on with such scenarios, which again, are not likely, but which the chances of them occurring are not zero either. Don't get me wrong - unlike the prepper I do not want (or secretly "hope") such things to occur, but I do want to be protected in case they do. Nor is this my main reason for having some allocation to BTC, but they certainly are positive properties that play into my reasoning for having a non-zero allocation.
I'm not a gold-bug prepper either by the way - indeed, I am very much an equities type of guy - but I also see the merit in holding a small allocation of gold. Indeed, my BTC journey was actually what finally convinced me to also allocate a little to gold, which is a trend I think other BTC holders may adopt also over time (with gold being viewed, and in certain ways functioning, as the analogue version of Bitcoin).