the premium on ETHE is currently too high for me
I don't pay attention to the premium on either GBTC or other equity traded crypto trackers. I wanted to invest in Ethereum, but not have the responsibility to hold it myself (even though that's one of the major ideas in crypto). And I don't want the tax implications. I own both ETHE and GBTC in my Roth, so I can take profits without tax consequences.
But I think I'll likely just ride the wave for years with these two. I think in the end BTC will be just a bubble, and worthless, but that may not happen in my lifetime.
If anyone cares, I will try to summarize why BTC will over time be worthless. Lets see, as simple as possible......
Ease of replacement - BTC is just computer code, and open source no less. It is easily replaceable or copied into something very similar. Like, Bitcoin Cash.
Why does BTC go up in value now? It's a first mover with widespread adoption. In order for the crypto bubble to work, new investors have to choose BTC as the one to buy rather than the other options (Bitcoin Cash, for example). Currently, that is happening.
What is the motive to destroy Bitcoin? About 75% of it is already mined. Allowing Bitcoin to remain as the world's one dominant crypto benefits those who hold this 75% of already mined Bitcoin. It goes up in value. It doesn't help everyone else who currently DOES NOT own Bitcoin. That's billions of people.
At some point a government will create a crypto with Bitcoin's characteristics, make it easier to access and hold, and suggest the world use that rather than Bitcoin. The pitch will be something like here we are, starting from Zero of this new crypto out, and you all have equal chance to get in on the ground floor. When the world does accept the new completely unmined crypto, Bitcoin has no real value. The two cryptos do the same thing, so it will be the governments of the world trying to start from zero, or the current holders of Bitcoin trying to convince the rest of the world to stick with Bitcoin rather than the new crypto. The world will then have to choose to support the new crypto (all the world population starting from zero in a new crypto launch) or support Bitcoin (which makes this small collection of early Bitcoin adopters phenomenally wealthy).
I think battles like that will go on and on, until the planet decides to take the approach which does not benefit Bitcoin's early adopters.
My two cents.
Keep in mind, I thought the same thing about Google. When it was just a massively popular search engine, I thought someone else would start the same thing (search engine, big deal) and perhaps PAY users out of the advertising income. It didnt happen. So.......maybe no one will try to outdo Bitcoin, and succeed, and Bitcoin will forever remain the DOMINANT crypto. There is so much value at stake I'd be surprised, but no one really tried to outdo Google search in a meaningful way, so maybe no one will outdo Bitcoin successfully. But come on, if I had $100 million to spend on a "Better Bitcoin" project, I think I could do it, or at least it could be done.
Until then, I have my GBTC and ETHE, and am optimistic they will appreciate in value, perhaps quite a lot. |
