I wrote this a few days ago to talk about the mania (Disclosure: I operate Crypto Lotus, a crypto hedge fund):
PSA: I generally can't give you advice about specific crypto investments as much as I want to for multiple reasons related to my job.
This is my one statement on the market: It is loud.
Crypto is moving very quickly and I regard it as the riskiest asset class that is available today. To invest in crypto is to accept that currency can be narrative driven and that juxtaposition requires accepting that currency can be simultaneously worth any amount and no amount. The things that favor crypto as an asset class are that there is lots of positive news, a reasonable long-term narrative, and some of the largest assets are deflationary in design. The things that are unfavorable to crypto are that the pricing is uncorrelated to observable reality, the regulatory risk, and the cryptographic risk.
Overall, it is a bizarre, whimsical space to be in right now, but it is also terrifying. Don't tread lightly, and please don't invest more than you can afford to lose.
Thar be Dragons.
______
For clarity, the reasonable long-term narrative is that bitcoin is easier to work with than existing banking infrastructure for some transactions. In particular, if you are a high net-worth individual negotiating with a nation state or a person of low means who conducts low-trust transactions, bitcoin serves you better than most other means of payment. For the vast majority of people who don't fit in those two categories, bitcoin isn't really useful.
PSA: I generally can't give you advice about specific crypto investments as much as I want to for multiple reasons related to my job.
This is my one statement on the market: It is loud.
Crypto is moving very quickly and I regard it as the riskiest asset class that is available today. To invest in crypto is to accept that currency can be narrative driven and that juxtaposition requires accepting that currency can be simultaneously worth any amount and no amount. The things that favor crypto as an asset class are that there is lots of positive news, a reasonable long-term narrative, and some of the largest assets are deflationary in design. The things that are unfavorable to crypto are that the pricing is uncorrelated to observable reality, the regulatory risk, and the cryptographic risk.
Overall, it is a bizarre, whimsical space to be in right now, but it is also terrifying. Don't tread lightly, and please don't invest more than you can afford to lose.
Thar be Dragons.
______
For clarity, the reasonable long-term narrative is that bitcoin is easier to work with than existing banking infrastructure for some transactions. In particular, if you are a high net-worth individual negotiating with a nation state or a person of low means who conducts low-trust transactions, bitcoin serves you better than most other means of payment. For the vast majority of people who don't fit in those two categories, bitcoin isn't really useful.