DominikWeil on Nostr: One of the challenges on a Bitcoin standard is that very few investments make ...
One of the challenges on a Bitcoin standard is that very few investments make financial sense.
As long as Bitcoin remains in its monetization phase, it will likely continue to outperform almost every other investment you could consider in terms of risk-reward ratio.
It is exceptionally difficult to find investments that have a reasonable chance to yield a positive ROI when measured in BTC.
The only outliers might be some successful, high-flying startups, but those come naturally with a high risk of failure.
Otherwise, unless a business can consistently achieve growth of 50%+ per year, it's tough to justify allocating any capital to it.
Some potential "non-monetary" justifications to invest regardless:
a) you treat these investments as "insurance" in case Bitcoin fails
An insurance generally COSTS money, but provides you with downside protection.
b) If investing into startups, beyond the pure monetary return:
You get something out of it beyond a pure "financial investment.
- e.g. you gain closer practical expertise/insight into a general sector worthwhile paying attention to
- you have the ability to work with some of the brightest and dynamic minds and "level up" your own expertise
- the start-up is building solutions complimentary to your own core business (hence: strengthening your own business positioning alongside on a mutually beneficial basis)
- stuff "you want to see exist/happening" (which is almost semi-altruistic motive)
These factors might make investing outside the Bitcoin realm worthwhile, despite the significant risks involved.
---
With that said, being more cautious in allocating capital is NOT a negative thing.
It encourages savings by only allocating capital to actually viable business models.
Very different from investing on a fiat standard where you can spray your $$$ around wildly and still "be profitable", especially since on a weak money standard blowing (& bursting) bubble investments are highly encouraged.
While few things are built to last and the capital stock of society is eroded along the way...
As long as Bitcoin remains in its monetization phase, it will likely continue to outperform almost every other investment you could consider in terms of risk-reward ratio.
It is exceptionally difficult to find investments that have a reasonable chance to yield a positive ROI when measured in BTC.
The only outliers might be some successful, high-flying startups, but those come naturally with a high risk of failure.
Otherwise, unless a business can consistently achieve growth of 50%+ per year, it's tough to justify allocating any capital to it.
Some potential "non-monetary" justifications to invest regardless:
a) you treat these investments as "insurance" in case Bitcoin fails
An insurance generally COSTS money, but provides you with downside protection.
b) If investing into startups, beyond the pure monetary return:
You get something out of it beyond a pure "financial investment.
- e.g. you gain closer practical expertise/insight into a general sector worthwhile paying attention to
- you have the ability to work with some of the brightest and dynamic minds and "level up" your own expertise
- the start-up is building solutions complimentary to your own core business (hence: strengthening your own business positioning alongside on a mutually beneficial basis)
- stuff "you want to see exist/happening" (which is almost semi-altruistic motive)
These factors might make investing outside the Bitcoin realm worthwhile, despite the significant risks involved.
---
With that said, being more cautious in allocating capital is NOT a negative thing.
It encourages savings by only allocating capital to actually viable business models.
Very different from investing on a fiat standard where you can spray your $$$ around wildly and still "be profitable", especially since on a weak money standard blowing (& bursting) bubble investments are highly encouraged.
While few things are built to last and the capital stock of society is eroded along the way...