Should Vanguard ETF investors buy Bitcoin?


Should you buy Bitcoin as a passive Vanguard ETF investor? Let’s find out!

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So, the book The Intelligent Investor talks about trying your luck in more speculative bets. A more speculative bet can be Bitcoin.

The book’s author explains there is “investing” and “speculating.”

Putting your money into Vanguard ETFs like the S&P 500 ETF or the All-world ETF is investing in the author’s mind, and although he doesn’t mention Bitcoin, I believe that putting money into Bitcoin feels more like speculating.

If you’re a hardcore Bitcoiner, you probably believe that putting money into Bitcoin is investing, and it’s not speculating.

Suppose you’re a hardcore Vanguard ETF investor who hasn’t put money into anything besides well-diversified Vanguard ETFs. In that case, you probably think Bitcoin and cryptos are speculative bets, especially if you don’t know anything about it.

If you’re like me, you’re somewhat in the middle.

According to my latest blog update, I have 13% of my total net worth in crypto, whereas 83% sits in Bitcoin. See https://creatoregg.com/financial-independence-8-2021.

As I just mentioned, I’m somewhat in the middle of seeing putting money into cryptos as only a speculative bet or a really good investment.

Looking at my situation, I’m still relatively young, have a decent stable monthly income, have relatively low fixed living expenses, and therefore can afford the chances of losing the money I put into it.

Therefore I decided to add more money to my Bitcoin fund.

There are thousands of different active cryptocurrencies, whereas Bitcoin has the most significant share of the pie.

According to Coinmarketcap.com, the total market cap of all cryptocurrencies is 1.9 trillion US dollars.

Just as a reference, the total stock market worldwide sat at 93 trillion US dollars in 2020.

And to add another reference for you, Gold’s market cap sits between 9 and 13 trillion dollars. It depends on what source you use.

Coming back to cryptocurrencies, of that 1.9 trillion dollar market cap, 42% is Bitcoin and 19% Ethereum. All the other coins are below 4% of the total market cap.

Looking at the total market cap of cryptocurrencies, whereas Bitcoin is the dominant factor, it grew tremendously in the past years.

Assets by market cap https://companiesmarketcap.com/assets-by-market-cap/.

In my opinion, if you’re into diversification, adding Bitcoin to your asset portfolio is not a really stupid thing to do looking at this list of total assets. There are people saying Bitcoin is the new Gold. Imagine if Bitcoin keeps growing as far as the total market cap of Gold. That would mean Bitcoin needs to 11 x its current price of around 43,000 US dollars. Imagine buying Bitcoin at 50,000 US dollars, and it 10Xs slowly over time to $500,000.

But then again, some people believe Bitcoin is a scam and will go to zero someday.

One of those guys is a man called Peter Schiff. Peter is a hardcore believer Bitcoin is a scam and that it will fail someday in the future. https://twitter.com/PeterSchiff.

He recently recorded a podcast where he discussed his case against Bitcoin. It’s definitely worth listening to get a better understanding of the different perspectives. https://www.whatbitcoindid.com/podcast/bitcoin-vs-gold-2-with-peter-schiff-greg-foss

And that’s what I’ve been doing these past 18 months—trying to listen to people at both sides so not only Bitcoin enthusiasts but also to the people that don’t believe in it. Still, Bitcoin sits high on the list of top assets, and therefore I think it’s a good diversification decision to own some of it.

If you also want to be part of the game and buy some Bitcoin for yourself, you can use my referral link to Coinbase.com. If you sign up for Coinbase through my link, you and I both receive 10 US dollars once you buy at least $100 worth of Bitcoin or another crypto. https://www.coinbase.com/join/k_rvjx

This is how I store most of my crypto: https://www.ledger.com/.

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