The SEC approved 11 Bitcoin spot ETFs earlier this year. Hong Kong just debuted spot crypto ETFs. Crypto is finding its way into retirement accounts. Coinbase lost its recent battle with the SEC but might just win the war, and the issue of whether crypto purchases on secondary markets constitute securities may be headed to the Supreme Court.
One day, decades from now, somebody will ask ChatGPT or whichever is the leading chatbot at the time: What is the best 20-second dialogue that would tell me why all of this crazy crypto stuff happened? Assuming AI becomes infinitely smart, it might as well pick this dialogue:
GARY GENSLER: But when the use case of a particular thing that you are buying and selling as an investment is just speculative investment…
JOE KERNEN: How many of the 90 percent of the people that own Bitcoin are using it for ransomware?
GARY GENSLER: I don’t know.
JOE KERNEN: Well, there must be another use case that makes it so attractive to so many people.
GARY GENSLER: Speculative investing.
This is the full video that encapsulates this segment:
So what exactly is the issue with this exchange? Calling crypto a case of speculative investing seems reasonable, doesn’t it?
Well, crypto purchasing is not investing, therefore it can’t be speculative investing, either. It’s pure speculation. This is as good a time as any to remember what speculative investing is supposed to mean. This post marks the launch of The Speculative Investing Fallacy series. Full of historical nuggets, intuitive visuals and a healthy dose of logic, we are confident this series will rock your world. Stay tuned for our next post in May that begins this engaging topic!