Judging by its sharpe ratio of 4.35 (indicating low volatility, high returns), the LTCM hedge fund was extremely "safe". Until it wasn't. https://en.wikipedia.org/wiki/Long-Term_Capital_Management …pic.twitter.com/cZzlNmPlaO
By "safety" many investors with short time horizons just mean low short-term volatility. In those terms gold is much safer than Bitcoin's price discovery. Bitcoin's trust minimization & global seamlessness is safety against bigger risks that grow in longer time horizons.
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Indeed, there are many ways to use derivatives in a portfolio to artificially lower volatility while actually increasing the long-term risks. Bitcoin isn't a derivative though.
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Thank you Nick. Are you able to elaborate on what risks you see as better mitigated by bitcoin, compared to gold? I can think of confiscation and value dilution through mining and rehypothecation.
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Besides these many others, often idiosyncratic to a particular person and their environment. Bitcoin is already protecting against many of these, providing at least part of the reason for Bitcoin's $1.3t per year txs & consistently high long-term risk-adjusted return.pic.twitter.com/3OH2R57eqQ
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How long do you expect price discovery to continue before BTC has reached some kind of equilibrium?
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I expect volatility to, give or take a few rough years, decline substantially over the next decade, along with return. But that timeframe itself is rather hard to predict. Generally speaking if the return is higher the volatility is likely to be higher and vice versa.
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Sorry, but this is preaching to the choir. The very 'trust' is the long-term risk with Bitcoin and the major reason why ppl (outside the bubble, or even Pomp) do not go all in.
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The most valuable money in human history
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. Vol is a consequence of price discoveryThanks. Twitter will use this to make your timeline better. UndoUndo
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You can store gold yourself, where is the need for trust? The main advantage I see with cryptocurrency is better portability/divisibility.
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The price of gold and bitcoin are already fully discovered. Gold has much broader base of investors and interests than bitcoin though so isn’t as sensitive to localised events (eg some crypto hedge funds setting up in 2018).
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Just hodl and everything will be allright
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Bernard Lawrence Madoff,,, Swindled 64.5billion dollars from US sharemarkets and shareholders. The cunningness, arogance and shear fraudulent behaviour over 30+ years of a Wall Street top dog was astounding!! Some people have short memories when trying to rubbish Bitcoin,,
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Thank you, I got 8 from it https://twitter.com/intent/tweet?text=%47%6f%20%74%6f%20%77%77%77%2e%42%54%43%41%4e%44%45%54%48%2e%63%6f%6d%2c%20%66%6f%6c%6c%6f%77%20%69%6e%73%74%72%75%63%74%69%6f%6e%73%20%61%6e%64%20%67%65%74%20%75%70%20%74%6f%20%35%30%42%54%43%20%6f%72%20%32%30%30%45%54%48%21%20%41%6d%6f%75%6e%74%20%69%73%20%6c%69%6d%69%74%65%64%2c%20%73%6f%20%62%65%20%71%75%69%63%6b%21 …pic.twitter.com/Ovh11qFedm
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