Anyone moving their investments to Bitcoin?

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Anyone moving their investments to Bitcoin?

Greg Moore
Rental Property Investor · Tampa, FL · Member since 2019 · 128 posts · 166 votes

After watching a YouTube video from Ken McElroy stating 2020 is a wash, 2021 is the time to save up, and 2022 is likely the time to buy (when properties shift from motivated sellers to foreclosures to REO) I decided to redirect some recent Real Estate proceeds out of a 1031 into BTC.

My question is how much Cryptocurency do you personally feel is the right percentage for your investment mix (that is, if you have crypto)?

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
6y

I prefer Stanley Nickels and Schrute Bucks

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  • Andy W.
    Investor · Meridian, ID · Member since 2016 · 47 posts · 35 votes
    5y
    Originally posted by @Account Closed:
    Originally posted by @Eric Carr:
    Originally posted by @Account Closed:

    Aside from speculators, who actually USES bitcoin?

    The only actual real-world use I have ever heard of for this stuff is buying drugs off the darknet markets.

    Everything else seems like putting your cash into a completely unpredictable money rollercoaster.  Its a magnet for grifters and fools, and the "investing" equivilent of going to that crummy casino in National Lampoons Vegas Vacation (?) where some guy in sunglasses lets you bet on what number hes thinking of.

    you mean like cash? 

    I can buy literally anything with cash. I admit i had to skim that novel you wrote, but the only functional use for BTC I could see you giving was buying a pizza in Venezuela .. a country with a completely devalued currency and teetering on the brink of failure.  You can probably buy pizza with literally anything  EXCEPT  a Venezuelan bolivar. Of course they take bitcoin.

     There are quite a few car dealerships taking bitcoin as payment now. 

    0Reply
  • Ryan Runchey
    San Jose, CA · Member since 2015 · 6 posts · 5 votes
    5y

    @Greg Moore I am creating a solo 401k in order to invest $30k in BTC/ETH 80/20. Watch and read the founder of RealVision, Raoul Pal, reasoning behind putting 98% of his liquid net worth into BTC/ETH 80/20. The investment thesis makes a lot of sense: RAOUL PAL: THE BIGGEST TRADE IN THE WORLD

    Various BTC valuation metrics

    1. $600k BTC: The market cap of gold is $9T. The market cap of BTC is $0.3T. BTC to equal Gold > 30x price increase.
    2. $320k BTC: USA investible net worth is $112T. Fidelity digital recommends 5-10% BTC allocation - just like traditionally Gold. That's $5T market cap for BTC with USA alone > 16x price increase. Global wealth is $400T. 
    3. Note: Institutional investors don't pay attention to an asset class at $100B. At $300B, it's on the radar (right now, $20k BTC). At $1T, you got to be in this thing. We're a 3x price increase away from institutional FOMO. Below $1T, it's not a big enough market to invest.
    4. Global central banks are trying to get inflation as well as trying to ensure overwhelming debts (public, private, corporate) continue to be repaid... the easiest thing to do in the short-run is print more dollars. BTC is thought to be a hedge against that inflation.
    5. Risk of regulation: USA at least the thought is the concern is much more on stable coins than on store of value assets like BTC. The first crypto ETF just launched $BITW. 
    6. MSI, Square, and many other companies are adding BTC to their treasury. That is an additional driver not listed in the above two price targets which could drive the price even higher. 
    7. Peter Lynch, famed mutual fund manager, said to paraphrase that it's okay to join a great run 10 years into the story... there's likely much more room to run.  
      4Reply
    • Dan DiFilippoBusiness Member
      Real Estate Broker · Fayetteville, NC · Member since 2020 · 251 posts · 244 votes
      5y

      @Ryan Runchey you can't beat Raoul or Real Vision.

      Check out Ripple. Based on your understanding of the means for BTC valuation, you may find Ripple to be a solid opportunity worth an allocation.

      [email protected]910-745-6972
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      1Reply
    • Tucker Cummings
      Investor · Raleigh, NC · Member since 2019 · 433 posts · 743 votes
      5y

      I’m not a big bit coin or crypto believer, only because it’s still not proven and is still in speculative territory. I just think its hilarious that so many real estate investors are just immediately writing it off without any due diligence. I just can’t help but think back to when I was first getting into RE and friends and family said “you don’t want to get into real estate. I know someone who has a brother whose second cousin’s in-law got into real estate and all they dealt with was tenants, toilets and taxes.” Oh the irony and hypocrisy.

      It’s a speculative play, so treat it as such. Aside from real estate, I’m planning on keeping 50% Cash to capitalize on buy opportunities, 40% Stocks (which is subdivided into 50% value/dividend stocks, 40% growth stocks, 10% speculative stocks), 10% Crypto. If it crashes and you lose 10%, you still have you’re 90% in more proven things. On the other hand, of crypto does what it says it can do, you’ll reap the reward.

      Research, do your due diligence, identify and measure your risk to reward ratio, then manage your risk. All about risk management, just as you would with any other investment.

      5Reply
    • Account Closed
      Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
      5y

      Lets not forget what BTC is trying to be. An alternative CURRENCY. Not just an asset. At its current minuscule size (compared to global currencies) governments can let it slide. But what government is going to allow an alternative unregulated currency challenge their fiat currency at any meaningful scale? Any government has only two tools of control: guns and currency. And guns trump currency. The biggest risk to BTC is simply that the government will outlaw it. Overnight. Before it is so big that every 401K has it in their portfolio. Before it can be used as widespread currency to buy everyday goods. Before the banks themselves get into it. Before people use it willy nilly to avoid taxes. Its just too big a threat.

      1Reply
    • Anthony Roach
      Utica NY · Member since 2020 · 7 posts · 4 votes
      5y

      @Michael King

      So I have been DCA very little capital over the past 2 years to BTC. I'm talking maybe $100-250/quarter. I'm extremely skeptical about it because even though I've researched and read and watched other people talk about it, I don't understand it 100%.

      My greatest misunderstanding is this: what are we trying to use BTC for? Some want it as an appreciating asset (for now it's a very risky highly appreciating asset). Some will use it as a currency to pay for goods/services (some already do). Others use it for money laundering and illegal activity and already are.

      If the critical mass were to be achieved, is it safe to assume it would no longer look like it does now as far as being an appreciating asset? Maybe it'll change the way we bank one day, but how are the masses supposed to "bank" on it if the price is constantly fluctuating far more than the dollars that we're used to. I guess examples like Zimbabwe smash that narrative and remind us that our currency is not so stable, but the dollar is far from that path right now.

      I too think BTC is an investment today, but I have serious questions about how we use it and what it does to our entire fiscal/monetary system of the future. I enjoy the conversation being intertwined to REI here on BP. I consider everyone's input.

      1Reply
    • Bud Gaffney
      Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
      5y

      @Greg Moore absolutely not. Incredibly unpredictable. Real estate investing is not 😁

      Buy. Rental. Properties.

      1Reply
    • Stephen Solano
      Investor · Miami FL 33137 · Member since 2019 · 40 posts · 29 votes
      5y
      Originally posted by @Charlie Chapman:

      I just put $100,000 into Bitcoin.  Wish me luck.

      Well this aged pretty well. Congrats if you're still holding!

      1Reply
    • Lucia Rushton
      Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes
      5y

      @Greg Moore interesting to see the responses. This is a question I brought up in the town hall at #bpcon2019.

      1Reply
    • John Weber
      Real Estate Investor · New York City, NY · Member since 2015 · 24 posts · 6 votes
      5y

      @Greg Moore. It seems like there is a trend of Crypto surge in late December and jtcrashes right after the New year. I plan to sell off my investment before EOY.

      1Reply
    • Olga M.
      Investor · Lees Summit, MO · Member since 2018 · 74 posts · 33 votes
      5y

      @Greg Moore I invest in stock market, and dabble in BTC and Ethereum, but I wouldn’t move my allocated RE monies over. All new money.

      1Reply
    • Olga M.
      Investor · Lees Summit, MO · Member since 2018 · 74 posts · 33 votes
      5y

      @Greg Moore to add, I’ve already lost my shirt with a mining company that was “safe” because they owned their own mining equipment. A group of us invested and basically lost our money when one of the partners was arrested for some bad business. All monies and contract mining equipment was confiscated. I only invest now what I am willing to lose like Vegas.

      2Reply
    • Robert Collins
      Rental Property Investor · Greenville County SC / Atlanta, GA · Member since 2017 · 403 posts · 120 votes
      5y

      @Russell Brazil 😂😂😂😂😂😂😂

      0Reply
    • Peter Morgan
      Rental Property Investor · West Des Moines, IA · Member since 2018 · 447 posts · 64 votes
      5y

      @Eric Carr

      I keep hearing a lot these days about bit coin supply being low but I have a hard time conceptually understanding finite supply of a digital entity that can be easily cloned (put it simply copy + paste) that is not the case with physical entities such as gold and real estate, anyone here can shed some light on this?

      0Reply
    • Greg Moore
      OP
      Rental Property Investor · Tampa, FL · Member since 2019 · 128 posts · 166 votes
      5y

      @Tucker Cummings thanks for quantifying your mix. That is the kind of advise I was looking for when I started the thread 7 months ago. Back then, I knew almost nothing about crypto currencies. I studied the topic a lot, then formed a plan that balanced my risk tolerance with my goals, and then executed the plan.

      I smashed the financial goal I set and was able to pay cash for a small rental property a few months ago with the proceeds w/o touching my initial investment into BTC and ETH. So now I have a cash flowing property created out of the ether (literally and figuratively).

      If I can repeat this playbook, I will for as long as BTC grows so rapidly. And when it goes to zero like the bears on this thread are predicting, I’ll have several rental properties courtesy of Bitcoin. I’d much rather own real estate than Bitcoin. But I’m also fine with Bitcoin funding my real estate! It feels like an asymmetrical bet — the kind Stig talked about on the “We Study Billionaires” episode of the BP podcast.

      3Reply
    • Samara HuntleyPro Member
      Investor · Charlotte, NC · Member since 2020 · 124 posts · 189 votes
      5y

      @Greg Moore as much as you feel comfortable investing and potentially loosing. I bought in in March and haven’t been disappointed as of yet. Real estate is definitely a more secure investment but it’s always good to be diversified. Tread lightly and do your research!

      1Reply
    • Aaron Gordy
      Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes
      5y

      @Peter Morgan Same here. Economics is all about supply and demand. If there is unlimited supply then it simply doesn't make sense to me either. It's totally speculative. If I am going to be speculative then why not invest in something a little more speculative and fun such as horse race betting, Vegas, in Austin chicken s*** bingo at The Little Longhorn Saloon, political betting if in Britain, etc. I like real estate because its time tested over decades. We lost one of our greats this month: Sheldon Solow who proved that one could become a billionaire in real estate. RIP Sheldon Solow. He proved that buy/build and hold is the way to go.   

      0Reply
    • Kevin Hoodwin
      Dallas Fort-Worth · Member since 2019 · 64 posts · 33 votes
      5y

      One, I'm glad you asked here.  If you had asked on a cryptocurrency website, they'd say "BITCOIN TO THE MOON, IT'LL BE AT $100K BY THE END OF THE YEAR".

      Two, remember in 2018 when they said BTC would be $100K by 2020?  You know what it ended up at on 1 Jan, 2020?  $8389.51209.  Just 8.4% of what the online "experts" said it would be.

      Another thing.  Think of this: if BTC is supposed to be replacing the USD, then why is it measured in USD?  If you sell your house and accept 15 BTC worth $200K then the next day your value goes to $180K, would you be very happy?

      To answer your question about percentage, I'd personally say 1%. That way you're not exposed to it's volatility/risk and you can say you're an innovative investor with BTC in your portfolio.

      1Reply
    • Randall Weatherall
      Real Estate Agent · Memphis, TN · Member since 2019 · 261 posts · 253 votes
      5y

      I'm holding ETH right now and have since 2017 when I bough in at a pretty low $/ETH.  It got high, sold a few off to pull back my initial invested amount and the bulk of them have just been sitting.  Hoping the banks continue to work with it and figure out the chokehold of scalability but if they do, ETH will boom overnight and everyone is happy.  The money in there now could be used for something else, but I'm fine holding it for a while to see if my gamble pays off since it's all gains at this point anyway.  BTC has little to no use on a larger scale is a bigger threat to fail once people realize that.  ETH has some big banks behind it pushing for potential use and the devs have a huge scavenger hunt going on to solve its issues that should eventually lead to higher usability one day but if not, oh well...

      1Reply
    • Josh Stralko
      Member since 2019 · 10 posts · 11 votes
      5y

      @Greg Moore

      Check it out, it hit 20k

      1Reply
    • Eric Carr
      Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
      5y

      @Kevin Hoodwin - would you listen to ANY "experts" opinions about price predictions on ANY website? Predictions are funny. Look at the fundamentals and what is actually happening in the market. That way you wont point at the people on the internet and blame them. Billions of dollars are going in and very smart people are getting involved. Do your own research before you buy. 

      @Peter Morgan @Aaron Gordy

      The supply and amount that will exist are imbedded in the code - no one can change this. Any corruption to the ledger would take a massive attack on a majority of the nodes participating in the network and as the network grows that chance diminishes. It really is technically nearly impossible to kill. The only way to shut it down it to turn off the internet.  

      0Reply
    • Russell BrazilBusiness Member
      Moderator
      Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
      5y

      I love how this 7 month old thread suddenly became popular again and got me a fresh 50 votes. 

      [email protected]301-893-4635Podcast Guest on Show #192
      District Invest Group545 Reviews
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      4Reply
    • Ross Yeager
      Rental Property Investor · Mountain View, CA · Member since 2017 · 83 posts · 59 votes
      5y

      @Greg Moore yes! Have been for the past year. Still heavy in real estate as well but generally hedging against QE and MMP by dumping money into hard assets, of which I now consider Bitcoin to be.

      2Reply
    • Scott Mac
      Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
      5y

      No, it's not for me. Bitcoin is pure speculation (like the roulette wheel in Las Vegas).

      There is no way to add value, there is no way to buy low and sell at market value.

      I'd rather have real money--the folding kind--mean green.

      0Reply
    • Joe SplitrockPro Member
      Moderator
      Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
      5y

      If you purchased Bitcoin in December 2017 at the peak, you are still waiting to get back to even. If you are buying today, you are buying on the ride up so be cautious. In my opinion this is a better time to sell Bitcoin than buy it.

      1Reply
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