The Simple Reason One Fund Manager Likes Bitcoin

The Simple Reason One Fund Manager Likes Bitcoin

Via Rangeley Capital's Chris DeMuth Jr. Through the years, I have held most of my cash in US dollars, but also have held some accounts in Canadian dollars and Chinese renminbi. However, diversification among the various flavors of state-sponsored fiat currency offers little protection from the fiscal and monetary profligacy that could eventually threaten each of these currencies. Over the past half-decade, part of my solution to this problem has been to diversify my cash holding into cryptocu
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4 thoughts on “The Simple Reason One Fund Manager Likes Bitcoin

  1. You do understand that a major fiat currency failure (US dollar or Yuan), if not immediately – will soon enough disrupt the internet it not take it down completely. The internet is essentially a network of various service businesses – all subject to basic economics and valuations. Thinking that the internet will survive a global economic collapse is extremely erroneous thinking. Thinking that crypto-currencies provide any safe haven from any thing other than minor garden variety market valuation adjustments – is silly. Thinking that the internet will survive major economic disruptions is equally or even more erroneous. So fine – trade the crypto-currency market fascinations, but don’t for a moment consider crypto-currencies as serious economic risk hedges. Even gold is of dubious value in a major economic collapse.

    1. I beg to differ about gold not being a protection, assuming we don’t go ‘back to the caves’. (that’s very unlikely as TPTB know what is coming and have the reset ready) Be that as it may here is a great article on why digital currencies are all ‘ponzie’ schemes doomed to fail:
      I for one trust physical Gold completely and have all my eggs there, lol

    2. Actually, I think that the internet would survive such an economic collapse reasonably intact. One story that I like to refer to when I think about the robustness of the TCP/IP stack (which is the network architecture that underpins the ‘net) is that during the U.S. / Coalition attack on Iraq, much of the Iraqi network traffic remained intact due to the ability of traffic to find alternate routes, which is a feature built into the framework of the internet. If one node or router is down, then traffic will just be routed around it. This is where I pull out my IT badge and say ‘Trust me, I’m an engineer.’ /wink

      One other point on the language of ‘collapse’. An economic collapse to me means that we cease to trade goods and services for currency, because nothing is a stable store of value. Now, we know that any currency can collapse in value, just look at Zimbabwe. I think the important thing to keep in mind is that cryptocurrency is just another store of value. It is another asset that we can trade, which has a value attached to it which humans give it. Block-chain currency like bitcoin relies on the internet, which as I have pointed out remains resilient even in the event of physical destruction. I have diversified into this asset class and will see where it takes me. I don’t have all my eggs in it, but I think this tech has a place in the future of commerce. Those are just my 2 cents.

  2. Crypto-commodities are by design Ponzi schemes with a semi illusory 2nd market, profitably traded by those with an information advantage. Zero sum with money to be made by a very few subsidized by the rest.

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