Remember also that the hackers are trying to steal your real dollars too, and the ones doing that outnumber the crypto hackers 1000-to-one. The amount of fiat dollars stolen in online fraud is multiples of the crypto that is lost due to criminals.
I have found that wherever there is money, there is danger, and the hard job is to disentangle the two.
Hackers have successfully attacked the American government, AstraZeneca and countless other institutions. It is a fact of life. Crypto is no different, but at least with crypto you are awake to the possibility every minute of each day, and you ensure that every step minimises that risk. I don’t want to tell you it eliminates risk, but in 2021 risk is everywhere.
Hard currency has been around a very long time but there has never been as much of it borrowed or spent as in the past 18 months. Don’t waste your time looking for financial prudence. There isn’t any. Not in any corner of the globe. Nor is there any convincing theory about how we are going to unwind the knot. There has never been a better case for saying that any serious investor needs to do the work and at least try to understand what is going on.
The legendary investor Sir James Goldsmith said, “When you see a bandwagon rolling, it is too late to get on it.” And the bandwagon is well and truly rolling and the “easy” money has been made long ago. This has been what has troubled me since bitcoin was $4000.
However, the real business and investment opportunities created from decentralised finance have not yet been fully imagined, let alone built. They are hard to evaluate, and picking them out of the sea of rubbish takes a great amount of hard work.
Throughout my career I have found that wherever there is money, there is danger, and the hard job is to disentangle the two. It is only now, very late, that I can see a genuine road forward for crypto and believe it will become a part of our lives.
There are two principal questions people seem to be focused on in this area; one is external, and the other internal.
The first is the external question everyone is asking that has put bitcoin (and other cryptocurrencies) in the spotlight: What can you do to protect the real value of your savings when the world is printing every currency in existence as fast as the presses will go?
Hedge funds and smart money are currently focusing on two areas to buy insurance against the consequences of abandoning sound money: commodities and cryptocurrencies. I think there is a case for both.
Personally, I like the gold miners and platinum metal, and have dabbled in both, but the investment success I have had has been dwarfed by what I would have earned if I had instead bought bitcoin and ethereum.
You need to think through how 193 separate countries are going to unravel the current economic supports and interventions. Like the lockdowns and border controls in the pandemic, not all countries are going to do it in the same way, and not all the outcomes will be…