Saturday, March 27, 2021

Now is the best time to buy in terms of potential gains vs risk

Many people complain that Bitcoin is too expensive, that they are too late etc. I will talk about Bitcoin only.

Guys, from logical point of view, now is the best time to get into it in terms of appreciation vs risk. Few points here:

  1. Nobody knew if this thing is going to be future. Everyone had some ideas, dreams, hopes, but nobody knew. If you bough at the beginning, you could not have known that this thing would go up like that. Nobody could asure. There might have been bug, some mistake, hacks, faith of people using it could have been somehow lost because of some event. Yes, you would have made huge gains, but with extreme, extreme risk.
  2. Today, the potential for sudden 100x is probably off the table. But. Now, everyone knows the name Bitcoin. Companies are starting to work with it. Soon, there might be some government trying to insert it into their reserves. We can even use Bitcoin in our daily lives. Ant the best thing? Potential for appreciation is still enourmous. We could go to 10 mil. coin in next 10 years. It would mean nearly 200x. You cant even imagine how big is that number. In stocks, you wait for double every 7 years on average.

We can make an example, just for better imagination.

In past, risk vs reward was like 10 000 vs 10 000. Now it might be 500 vs 3 000. In past, risk was probably same as reward. Extremely big. Today, risk vs reward is unbalanced and there is no other asset class on earth with that kind of ratio. Stock, real estate, bonds, their appreciation usually matches their risk profile.

I am not saying that crypto is safe. Its not. Its still risky asset class. But that asymmetry in risk vs reward is probably the best it has ever been.


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