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The Default Will Be Bitcoin & Crypto

 There has been a lot of talk over the years about how large of an allocation investors should be making to the cryptocurrency industry.

The most conservative investors usually arrive at a 1-2% allocation and the more aggressive folks end up with 5-20% in their portfolio. In the case of the extreme outlier, and mostly reserved for young people, there will be majority allocations in a portfolio up to almost 100%.

These percentages are based on the idea that bitcoin and cryptocurrencies are a different type of assets than the traditional stocks, bonds, currencies, and commodities.

The legacy investor looks at crypto as the fifth type of asset that you can put into a portfolio. But I don’t think that this is the right framework to look at it.


My personal belief is that eventually 100% of every single person’s portfolio will be crypto. This came up in a recent conversation with Shark Tank’s Kevin O’Leary. My point to him was that every business in the world will ultimately have some interface or dependence on a crypto system.

Every bond will migrate to some new technology rail that is used to issue, track, and transact with. The currencies will all become truly digital and the commodities will do the same thing.

Investors will continue to have four asset classes to invest in — stocks, bonds, currencies, and commodities. The technology will change. The governance models will change. The names of the assets and issuers may even change. But the core asset buckets aren’t going anywhere.


There is historical precedence for this. In the mid-to-late 1990s, entrepreneurs and investors were obsessed with the internet. The promise was that this new technology network would disrupt everything.

Large corporations would announce their new focus on the internet. Investors were looking to invest in internet companies and internet bonds.

Founders would tell their families that they were leaving their cushy jobs to start an internet company. The mainstream media couldn’t stop talking about “internet! internet! internet!”

No one talks about the internet today though. There are no internet companies. It is just assumed that every company, regardless of the industry or stage of development, uses the internet. There are no assets that exist without leveraging the internet in some form or fashion. The default standard is a decentralized, digital network that allows people to interact with each other in a superior way to the legacy structure.

The same thing is going to happen with bitcoin and crypto networks. Everyone is obsessed with the technology today because it is new. Are you a crypto company or not? Are you investing in crypto or not?

Don’t be a boomer. Get in on the crypto industry right now! Well, that excitement eventually fades away as people understand that the technology will be the default standard moving forward.

Every company will interface with crypto networks or assets. Every financial asset will run on these new transaction rails. Crypto won’t be new, it will be the underpinning of everything.

The debate and competition over which networks win, and which ones lose, will be settled by the free market. Value and usage will accrue to those who build something that solves the problems of users. But the idea that new, decentralized, digital networks will ascend to global importance is nearly inevitable at this point.

We won’t talk about crypto companies.

They will just be companies. It will be assumed that they leverage these new, superior technologies. Which brings me back to my original point, every investor will have 100% of their portfolio in crypto. Every equity they own will use the technology. Every bond they have will be issued and transacted with these rails. The currencies in their portfolio will all be digital and the commodities will be integrated as well. The entire portfolio will be crypto, yet we won’t necessarily think of it that way.

Times are changing fast. This is all exciting. We must remember that history is usually a great guide to the future. The more things change, the more they stay the same. Hope each of you has a great day. 

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