Bitcoin Maximalists and the Danger of Thinking in Absolutes // Ep. 88

In This Episode

• How Bitcoin could be like Netscape
• Trying to sell a 1 oz gold coin for $20
• There are cycles everywhere

Should You be Bullish on Bitcoin Forever?

There are personalities out there that are telling people to hold Bitcoin forever. Names like Max Keiser and Michael Saylor come to mind.

But is that a good idea? We give our opinions on what we think of Bitcoin maximalists and what the future could hold in crypto.

Read the Transcript

Hugh: Hi Walter. There is this thing called bitcoin maximalist. As you probably know, they are all  about bitcoin. Bitcoins are the only thing out there. It is the best thing and they are going to stick with it no matter what. So, what do you think about that? What do you think about the psychology behind that? Do you think it is dangerous to be stuck in just one thing like you know, just trading Euro or USD stuff like that?

Walter: I do not know about bitcoin maximalist but I believe you. Look, I only know enough for it to be dangerous on that side of things. Here is my understanding of the cryptoworld. There’s different things and there’s different coins and tokens for different reasons.

They all have kind of different uses and stuff but remember I just keep thinking back to when like 1994, the Netscape stock was amazing. If you look back and look at Netscape that was amazing.

Netscape actually blew up and it kind of came back as Mozilla. So, Mozilla today is kind of the people that came from the ashes of Netscape. So if you are like, “Oh, this internet is going to be huge” back in 1994 or 1985 like you are thinking, “Dude, this is amazing”. I am all in on Netscape or I am all in on home computers in 1993 or 1992 with Gateway 2000 stock.

Both of those got superseded. Something better came along. Maybe ether is better with bitcoin. Maybe ether is actually going to be the thing but they have different uses. Bitcoin as I understand it is more like a storage like gold holding value. Whereas, ether is a little bit more, my programmer tells me that in the future the internet is going to run on ether. That is what he tells me. I do not know but that was what he told me.

So it is a different thing you know all together but your point is a good one which is you know sometimes, we’ll say though. I know a trader in Africa and every year he locks in on one currency pair. He just traded it the entire year. Like one year it might be the Pound and Yen for example. That is all he does and he has made enough money to get to the point where the authorities do not want them to leave the country because his contribution to the federal budget is so great.

So that was a big deal for him like, “How am I going to get my family out of the country?” There is something to be said of that but what you are saying is kind of like someone locks in on something and they are just, “I am only going to do that for life.”

I think it could possibly work. I do not why you would want it to work because I remember in 2003, I used to trade the Euro, Swissie. I do not trade it anymore. The Euro, Swissie used to move around for quite a bit. Now it is just, I do not like the look of it .

Actually, I traded the Aussie, Kiwi a lot but I do not like the look of the chart as we record this. The Aussie, Kiwi is too weak, too choppy. So I can understand why you would want to become a specialist but I think as a buy and hold sort of thing that can be a bit dangerous. Which is kind of what you are getting at.

If I would just buy Netscape and hold it forever, I wouldn't have any money now. Same thing with Gateway 2000. I think gateway 2000 became Gateway and then Dell computers took over and kind of squashed like they are the leader in that sort of niche now.

I think you could do it but as a buy and hold strategy, you could make that with gold though. You and I know like I am just going to buy gold and I am not going to let you know like you can go to these guys that have coin shops and stuff. Like pawn shops/gold coin guys, they will tell you, “No, we do not sell gold. We just buy it.”

I understand but I think you need to be mentally flexible overall if you are going to be a trader. If you are going to be an investor even. If you are an investor, you have got to have a point where you say, “No, it is not working. I need to get out of this”. You always need to have your limit. It is just like as traders we know we get in, where do I get out if things go bad? What are my rules in terms of that? Even if it is a trailing exit there’s got to have something that happens that kicks me out of this trade.

Hugh: I totally agree. If you could just look at how the world works things go on cycles. There’s the tides, the stock market goes in cycles, all this kind of stuff. What would not an investment go in cycles?

I think you could make a case for buying bitcoin or maybe gold super, super long term but I think in the end specially in technology, there are going to be cycles where  the next technology comes in and that is going to be better than the last one. Those guys are like the old fogey saying, “Back in my day this was the best thing and I am going to do that forever.” I think it really kind of locks you into something that might not be working in ten or twenty years down the line.

Walter: That is right. Remember this dollar cost averaging idea of buying every year or buying every month that was manufactured by the brokers to keep clients.

Hugh: Expensive.

Walter: In Asia they came up with that idea to keep clients in the game even if the markets were down because as you and I both know, especially when the stock market, raging there is a lot of interest in trading. Funnily enough, the other time it has lots of interest in trading is when it absolutely crashes. Those were the two. It is just some kind of doing nothing  but chopping around. The interest wanes.

It is only when absolutely at a peak or if it is completely crashed. Is it because you want to convert it into something else? That is more useful because I can’t. Like if I take my gold coin across the street to the sushi shop, they are going to go, “Huh?” Do you know what I mean?

Hugh: Maybe when they are smart they would take it, right?

Walter: Exactly. I will see if I can find it and put it in the show notes. There was this guy that went around and he was trying to sell like a gold coin. It was on YouTube he was trying to sell gold coins for like twenty bucks or whatever. It was worth like fifteen hundred or two grand. It was worth a lot of money and nobody took him up on it because they were like, “No, I am not going to give you twenty bucks for that”.

He could not get anyone to buy it. It was so funny. It just shows that you disconnect between people like you and I like what is the market you know the people that are coming  in tune with the market versus the general public. There is no utility for something like that with the general public. It is funny.

Hugh: Totally but hopefully that will change soon. Alright. See you, Walter.

Walter: Thank you.

Hugh: All the information in this podcast is for educational and informational purposes only and is not trading or investment advice.

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