Apes Are to Humans as Crypto is to Stocks
Apeing into crypto has entered the lexicon and perhaps for good reason
We love writing and are always in search of additional ways to deliver an idea, a concept, and/or a message. We are big on images, we produce tales and we look for analogies; whatever it takes to deliver a message.
We came up with an analogy today and we hope it delivers.
Crypto seems to have made it. The new administration certainly seems excited about it. The SEC cases against crypto companies are seemingly being dropped left and right. Roundtables are being held. The price predictions for Bitcoin get more and more outrageous. So, how exactly did we get here? When you cut through all the noise and peel back the onion, what do you find?
The answer is … parity.
CNBC covered Bitcon in a three-stock lunch segment. Advisors tell you how you can “allocate” crypto to an “investment” portfolio. Many think one can “invest” in crypto. Remember my daughter asked my son, how? People debate whether or not Bitcoin is a bubble; it doesn’t matter that it actually isn’t (but not for the reasons you think), the whole debate makes crypto sound like stock. You can obviously trade stock and crypto on the same platform; remember this Fortune article?
With a Robinhood account, your first exposure to cryptocurrencies does not frame them as an unproven alternative to stocks. The two stand on equal footing. Coke and Pepsi. Feel like trading one or the other? Have at it, no difference. This is radically different from the experience of the Gen X and boomer investors … The generation creating the new conventions of the investing landscape views stocks and crypto coins as interchangeable. (emphasis added)
Here is what many people don’t appreciate. It is very easy to conclude that crypto is just like stock. The entire narrative leads you that way. All these conversations led to crypto’s biggest accomplishment: parity.
Does crypto deserve that parity? Absolutely not, but it achieved it.
Chimps share about 98.6% of our DNA but you would not marry one, would you? We suppose you wouldn’t live with one, either. You can’t even talk to them. We are all primates, but a chimp is not what comes to mind when we say humans. Chimps are similar to us in many ways, but when it comes to things that actually matter, they are very different from us.
The same goes for crypto. You can trade it, just like stocks. You can make money on it, just like stocks. It has a price, just like stocks. It’s probably not unfair to say that crypto shares much of the DNA with stocks.
However, if your goal is to preserve capital, you should never touch it.
Apeing into crypto has entered the lexicon and perhaps for good reason. Trading crypto appeals to one of our most primitive and natural desires: speculation.
Simply said, there is nothing wrong with that. If you went to the zoo to see a chimpanzee and you saw one you wouldn’t be frustrated because that's what you wanted to do.
If your dating app matches you with Oliver, well, we suppose you wouldn’t be happy. Yet, this is what’s happening all day, every day in finance.
The road to healing starts with agreeing on the definition of investing. Then, and only then, are we able to set up some reasonable rules that would prevent the sale of speculation under the guise of investing. That’s why we are here.
