(I am not a financial advisor and none of this is financial advice. This is all my opinion)
In terms of what to actually invest in, I think ETH is actually the most interesting long term. The value of Ethereum isn't just the currency but what can be done with the platform. Decentralized finance, contracts, and so on. I think Binance's chain has more volume, but ETH has more institutional interest. While I like CZ, the Ethereum devs seem to be a bit more innovative and have a better eye on where the future of crypto is going. If you look at the de-centralized exchanges like Uniswap and Sushiswap, they both run on the Ethereum platform. So if you own Ethereum you reap the rewards of both of their successes.
I can't imagine Bitcoin will ever go away but I can't imagine where it's going either. There are developers trying to build projects on top of it (Lightning and STX) and they might succeed. But is that as good a bet as ETH? I don't think so. A crypto portfolio without BTC is probably a huge mistake, but I don't think it can be your only coin and I don't think its future success is guaranteed. IMO it becomes the new gold. You want it to hold value, but you don't transact with it.
It's a bit of an alt coin but I think $LINK should also be part of a basic crypto portfolio. Chainlink is the most popular solution to the problem of, how do you get data from outside of a blockchain onto that blockchain. And there's no serious competition.
Did he mention the words "freedom", "tyranny of the dollar", "HODL" or "lambo"? In that case, I would dismiss his opinion completely (just kidding )
lol
More seriously though, his opinion is probably well-informed.
I agree
1. I see a more likely future where countries adopt some sort of cryptocurrency of their own making as legal tender, rather than any crypto "out there". Countries should be reluctant to ever give up one of the most important policy instruments they have, i.e. monetary policy. Even when that has happened (European Union, de-facto or de-jure dollarization in Ecuador, Panama and El Salvador), that control wasn't given to some decentralized community. If it wasn't already dollarized, El Salvador's move to crypto would be even more disastrous. Of course, this would offset the largest advantage of crypto, being completely independent from any centralized decision making.
You can see this already with Miami creating its own city token.
I think though that government/bank issued coins are going to co-exist with crypto. Every attempt to ban crypto has only resulted in it being more widely used, and the manipulation of fiat money is actually entering popular consciousness. Soon everyone will be that guy on Youtube on 2003 who talked about how the fed was a scam and you should buy gold, except it will be crypto.
2. Bitcoin has made a lot of people very wealthy but I'd expect a professional financial advisor to nuance his story about big returns with a statement of how much risk he took. Returns should always be compared to risk taken (measured by volatility), and the real measure of an efficient portfolio is the return per unit of risk taken. Even if he made a lot of money, he can't recommend Bitcoin as an investment strategy without talking about how risky it is or how it compares to other portfolios, at least for the short term. Bitcoin has outclassed any other asset in returns, but also in volatility.
It's hard to say. It's easy to look at what Crypto is now and say "oh of course it was inevitable." You can rightfully point out though that, for all its problems, the concept itself was never invalidated. When Mt. Gox (big exchange in the early-mid 10's) went under and its reserves were stolen, the lesson was that you need to make sure you own your own crypto, which reinforces the central conceit of decentralized currency.
One thing I definitely think is, short-term volatility to me isn't really a downside in investing. If you trade, volatility is how you make your money. If you're in it for the long term, then short-term swings shouldn't bother you. (seriously though I am not a financial advisor and if you need to withdraw your investments during hard times and you're in a down swing that's a bad time. And I own some index funds so it's not like I think stable investments don't matter)
I think the best way to look at it retrospectively is - Any big evolution or revolution is a risk. The Internet was clearly the future in the late 90's, but a lot of people got wiped by the dot com bubble. They picked the wrong companies, and it sucks. Where I think the mainstream committed a sinful error was looking at crypto as not even a legitimate investment vehicle because it was fake internet money, instead of even trying to understand the possibilities. Yes you still treat it as high risk (especially small cap coins), but there are legitimate returns to be had.
Does crypto fall under the jurisdiction of the SEC?
I'm pretty sure crypto is 100% unregulated in the USA
There's some sparse regulation going on, AFAIK:
- Most serious crypto exchange platforms will require their users to provide a photo ID before opening an account, and I think this is due to regulatory requirements.
- Crypto currencies are taxable assets considered as property by the IRS. When doing my tax return this year, the first question that popped up on the H&R Block platform was "Did you own any crypto currencies in 2020?"
Correct. The SEC also looks at tokens it judges as "securites". The Ripple and LBRY lawsuits are the most infamous. But, to give the SEC credit, they clamped down on ICO scams. I didn't follow crypto during this period, but my understanding is a lot of people got rugged by them.