Crypto is polarized, as far as politics goes. Especially if we look past the US. When a pro-crypto government rules, risk goes down. And opposite when the skeptics take charge.
Nobody should hold large amounts of fiat long term. That's what shares and bonds are for, which incidentally also support productive enterprises (unlike crypto).
Long term, equity, debt, gold have pretty good inflation and risk profiles. Real rates have overwhelmingly been positive, so government bonds are a fairly good store of value.
Real rates have overwhelmingly been positive
When I look through my old bills, what I paid for apartments, hotels, coffee it seems the real inflation was around 8% over the last 20 years. For hotels for example, it is easy to look up the same hotel today and see how prices changed.
And bonds paid less than 4%.
Can you give an example of something that increased less than 4% in price annually?
crypto is a legit information hazard that threatens to completely demoralize the actually productive hamsters in the economy. if everyone knew they could've made more money in a year than their entire career, they'd give up working forever.
It puzzles me how people see 10x-100x’ing their money on crypto as gods gift to humanity and a stroke of brilliance, but making the same amount by investing in NVDA seem like just another lucky stock pick.
If anything, there will always be the next FAANG startup, that will make one fabulously rich.
Not that that crypto was a sure thing, for a long, long time. Everything that hyped it up in the start, are more or less dead now. It has been collectively decided that coins like BTC have little practical value, outside store of value. As I wrote in this thread, back in the early days the main attraction of bitcoin was mass adoption for daily use as a currency. We've long since moved away from that. What makes it valuable today, was only a part of the equation back then. And that's not taking in all the regulatory risks that were looming (not that they have been completely eliminated).
Likewise, for the longest time GPUs were mainly seen as a consumer product for graphics usage. Then machine learning algorithms started using them, and the rest is history. If you invested in Nvidia on the thesis that all they ever were going to serve were gamers, you likely wouldn't have foreseen the current price.
A more general and vague guess would be: Something related to data, AI, green energy, healthcare, etc. - look at our biggest unsolved problems, and then at the companies that are working to solve them.
LOL. Having 30% drops is not 'little risk':
* https://www.cnbc.com/2021/05/19/bitcoin-btc-price-plunges-bu...
Or 50%:
* https://www.nbcnews.com/business/markets/bitcoin-whats-going...
I want a 'store of value' to be fairly predictable, and even with inflation (generally 0-4%) fiat currencies have that (I can plan around that by investing in bonds and equities, or even some bank savings products).
...which is why its not gonna plunge anymore. too many people have "seen" the pattern now, and the instant it dips even 5% people are gonna be buying "the dip" in droves, thinking this is gonna be their entry, this is their moment in the sun. "I've seen it do this before, I know how it ends, I gotta get in now!!!"
admittedly bit of a conspiracy but its not that far removed surely
So far.
It took gold, another popular 'store of value' commodity, several decades to reach its previous peak originally reached in 1980 (blue line):
* https://graphics.thomsonreuters.com/11/07/CMD_GLDNFLT0711_VF...
There was ~20 years of it not doing much. Then ~10 years post-GFC of it not doing much. A lot of folks are looking at headlines and making long-term conclusions that certain things are inevitable:
* https://en.wikipedia.org/wiki/Recency_bias
> ...which is why its not gonna plunge anymore. too many people have "seen" the pattern now […]
And how many times has the 'stock market plunging pattern' have we seen? Does that prevent people from panicking? As someone who has been in /r/PersonalFinanceCanada for many years now, the panicked posts of March-April 2020 were very real.
There is an entire field of study examining how people act badly when it comes to money:
* https://en.wikipedia.org/wiki/Behavioral_economics
People still think they can pick winning stocks and beat the market consistently over the long-term:
* https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street
gosh what a clown world, this stuff is so ridiculous.
It is a core aspect of human life.
And there is no other asset that does that with as little inflation and risk as Bitcoin. That seems counterintuitive because Bitcoin is portrayed as a very risky asset. Which it is in the short term. But long term, fiat, gold, equity, and real estate all have an even worse inflation and risk profile.