Bitcoin Investment Theses - Part 3 - The Micro

After the last few messages about investment theses for bitcoin - the Revolution and the Macro, we can now look at how to look at bitcoin as part of a portfolio.

Bitcoin Investment Thesis 3 - The Micro

When it comes to investing, we all have limitations. We can't just throw our money into every opportunity that comes our way. We need to consider our income, expenses, time horizon, and risk profile. And that's where the micro perspective comes into play. It's all about understanding how Bitcoin fits into your specific situation.

For instance, let's say you're eyeing Bitcoin because you believe an ETF approval is on the horizon, and that could potentially drive up the price. As a financial advisor, you need to think about how this could impact the market and, more importantly, your clients. Do you have a plan in place? Will you sell once the price spikes, or will you maintain an allocation? These are the questions you need to answer based on your micro investment thesis.

Now, let's talk liquidity. Unlike most alternative assets, Bitcoin offers incredible liquidity. It's an asset that anyone can get into, regardless of whether they're an accredited investor or not. However, it's important to note that Bitcoin has had its fair share of volatility and regulatory challenges. So, you need to allocate accordingly and have a plan in place to navigate these potential headwinds.

As financial professionals, it's crucial to stay informed and conduct thorough research. But remember, not all information is created equal. When you come across news, articles, or opinions, consider the perspective of the source. Are they focused on the revolutionary potential of Bitcoin, the macroeconomic impact, or the micro-level implications? Understanding this will help you make informed decisions for yourself and your clients.

With the potential approval of Bitcoin spot ETFs on the horizon, it's essential to be prepared. Interest from clients is likely to increase, and you'll have more opportunities to help them invest and allocate in the near future. So, keep these investment theses in mind as you navigate the exciting world of Bitcoin.

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In a Nutshell:

We’ve now looked at three reasons people invest in bitcoin - Revolution, Macro, Micro. I discuss these partly so you can help determine for yourself and your clients why you might want to allocate. I also talk about these because you’re going to read and see news and opinions about Bitcoin. I want you to be able to understand where the creators of those opinions are coming from, so you can see if it fits your thesis, and decide to consume and engage.

Next up: We look at the second largest crypto asset by market cap - Ethereum. Until then, stay invested in learning!

Warmly,

Adam