A Top Personal Finance Expert Is Super Bullish on Bitcoin. What If He is Wrong?
Our hypothetical SEC employee started their journey on June 1. Third week into the job, the crypto research continues…
Your research on Michael Saylor left you a little frustrated. You still can’t believe how a seemingly smart guy like him (he has dual degrees from MIT) can, with a straight face, recommend to people that they basically drop everything they are doing, sell everything they have, mortgage their house and use all those resources to buy more Bitcoin. This strikes you as extremely irresponsible. When the interviewer tried to soften Saylor’s stance just a little bit, by invoking the 80-20 rule (also known as the Pareto Principle), perhaps hoping Saylor would at least say something like, “keep 20% in something else,” Saylor actually doubled down and effectively said, “Nope. All in on Bitcoin.”
You start seeing the problem within the problem. The root cause of all this, of course, is definitional: Bitcoin is not investing, but is being advertised as such. Sellers of speculation are already incentivized to sell it as investing, but what about buyers? Why do they want this? Don’t they really care about safety? In fact, if they don’t, why not just admit you are speculating?
The likely reason why others won’t admit to being a speculator is because they view speculation and gambling one and the same. While that is not true, that’s the perception. Thus, people are not willing to admit they are speculating, the more convenient and better looking perception is that they are investing; they fancy themselves as investors. Therefore, they seek the voices they feel they can trust.
Dear Reader,
Is this you? Are you unwilling to admit that you are speculating and you need
others' opinions to cover for your unwillingness?
You realize Michael Saylor and people like him can potentially cause a lot of harm. They are smart, charismatic, have the pedigree and are able to make the crowds follow them. Obviously, people like Saylor are entitled to their opinions, which is why establishing consensus on definitions of important terms like investing is one of the best things that regulators can do.
You know where you want to take your research next; a focus on other people that are smart and have gained society’s trust. You turn your attention to personal finance experts. Surely, some of them must have formulated some opinions on Bitcoin, and more generally crypto. One of the biggest names in the industry is Ric Edelman, and yes, he does have some opinions on crypto...