I’d like to quickly address some responses.
Maybe you noticed that I didn’t take a stab at speculating on Bitcoin’s ultimate destiny…
Truth is, I don’t have anything to add to the discussion of adoption speculation. Where Bitcoin’s demand and supply settle are dependent on a million different interconnected variables with no precedent. Who am I to correctly calculate the odds of 10x my money vs 0x my money?
These are the type of situations where I fall back on the Efficient Market Hypothesis. Under that framework, I just assume the market is pricing Bitcoin efficiently. I assume that the expected return on my investment is commensurate with the risk being taken. The risk being taken is quite large!
And so, I’m arguing Bitcoin investment decisions should be based on short-term risk appetite (gigantic, given demand and supply unknowns), investment characteristics (currency hedge), and long-run return expectations (I estimate 7% per year after successful market share capture).
Having an edge on the market is difficult and rare. Picking suitable investments for your own risk appetite and financial goals is much easier.