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When will investors insist BTC must be part of their portfolios?

I just received this article (below) in an email from Vanguard. It’s full of FUD! Considering that BTC is now a $1 trillion asset, averaging 200% increase each year, when will these articles stop?!

I’ll looking elsewhere to put my investments until there is an ETF available in the Uk. I will now be looking into a stocks and shares ISA where at least I can buy shares in a company with BTC on the balance sheet.

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/markets-economy/digital-currencies-no-substitute-for-shares-bonds?cmpgn=ET0321UKCENLC0105



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9 Comments

  1. I don’t know why you’re so quick to call it FUD. I think they are not seeing the same big picture as the rest of us, as I support Bitcoin fully, but that doesn’t mean its necessarily the right time for them or their clients.

    Did you read through the article? I think we all agree that crypto is not a “traditional” currency or stock/bond. I don’t really want it to be though, as that’s not why I invest in bitcoin. Neither is gold or silver, or other things like that.

    Their argument that it is not a commodity is based solely on it not being “physical raw materials”, which is obviously true. I guess maybe it somehow implies that this is the only way for non-traditional assets to be reliably valuable, which is just naive, but not something they stated outright so we can’t really hold it against them.

    Crypto as an investment clearly does not fall into any of those categories, right? If they only want to invest in those categories, then Bitcoin probably isn’t for them… yet.

    They do share some risks as well, which are not technically wrong. They may be overstated and the premiums/benefits/etc may outweigh them, but nothing they stated is a lie:

    * It _is_ true that technically you could go to sell your Bitcoin and the exchanges are down (at least temporarily). It seems unlikely they would all go down, but there really are no guarantees and we have seen some places struggle with high volume trading days. If you suddenly needed $1,000,000 fiat within 3 hours, are you sure you could get it from Bitcoin no matter what? Of course, that is a flaw for many assets, and having diversity of liquidity in a portfolio seems pretty basic to me…
    * Pricing is not centralized or controlled, that is factual. I like that because it makes it harder for someone to manipulate it without me knowing, but it is still a fact and has _some_ risks. Fact of the matter is that huge miners and whales can influence the price of Bitcoin and nobody could really stop them, the only protection we have is that it wouldn’t make any sense for them to do it right now.
    * Regulation seems to be getting less and less scary each day as there’s more institutional support and more clarity that it’s not like the US could just outright BAN bitcoin. However, that doesn’t mean they can’t raise taxes on cashing it out or other things that could (at least temporarily) lower the price/value.

    We shouldn’t be so quick to freak out over these articles. I can write an article on why it’s risky to buy a house, fly on a private jet, or even get out of bed each morning without stating anything outright untrue. Just like you would shrug most of it off based on your own knowledge, savvy investors should simply take these in as data points and make their own intelligent decisions.

    Vanguard simply isn’t ready to make this choice for everyone, but their time will come if we continue down this same path.

  2. They’re seeing more and more people take money away from stocks and bonds and put it into crypto (sadly, not all of it goes into bitcoin). So, just a company defending its future profit margins, nothing to see here

  3. Why are you worried about vanguard investing in Bitcoin. Just invest into what you think is a good investment. if you are correct, then at some point the world will catch up and you will have a bunch of money. I would be more worried about how governments are going to be trying to regulate it. that is what most to these firms and they are waiting to see before they tell their customers to invest in something that a government could try and block someday. Just my opinion and I am probably wrong so don’t hate.

  4. Here is the part I’m stumped by:

    “So unlike with every sterling banknote, for example, there’s no written promise from the chief cashier of the Bank of England ‘to pay the bearer’ a sum of money – no implicit guarantee from the UK government.”

    So if you take the sterling banknote to the cashier, what are they going to give you? Not gold or silver. Then what? Another banknote and a blank stare? They guarantee to give you another banknote??

  5. Of course they’re not a substitute for stocks and bonds. Isn’t that the entire benefit of the near-zero correlation?!?!?!

    Same could be said for gold! Same could be said for real estate!

    But both of those found their way into portfolios despite not being a substitute for stocks or bonds 😉

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