Scarce Assets E004: Wealth Management in the Bitcoin Era with Morgen & Pierre Rochard
Feb 20, 2024
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Wealth management expert Morgen & Bitcoin finance pro Pierre discuss savings technology, long-term financial planning, market timing, BTC mining, bitcoin adoption, and the need for better money & monetary rails in the Bitcoin era.
Bitcoin should be viewed primarily as a long-term savings technology, not just as an investment or speculative asset.
When investing in Bitcoin, consider spending, net worth, and long-term financial planning to determine allocation.
Long-term horizons of at least five years should guide investment decisions in Bitcoin, aligning holdings with individual circumstances and readiness to adapt strategies.
Deep dives
Bitcoin as a Savings Vehicle
The podcast discusses the concept of Bitcoin as a savings vehicle. The hosts and guests emphasize that Bitcoin should be viewed primarily as a long-term savings technology, rather than solely as an investment or speculative asset. They highlight the importance of considering spending, net worth, and long-term financial planning when determining how much to allocate to Bitcoin.
Managing Volatility and Financial Operations in Bitcoin Mining
The episode delves into the operational challenges and financial considerations in Bitcoin mining. The guests emphasize the need for Bitcoin miners to carefully manage costs, particularly electricity expenses. They explain that capital structure, demand response, and power purchase agreements play critical roles in optimizing profitability in mining operations. The conversation also highlights the entrepreneurial aspects of Bitcoin mining, including real estate, facility construction, and various engineering disciplines.
Adoption and Understanding of Bitcoin
The podcast reflects on the adoption and understanding of Bitcoin. The hosts and guests discuss how familiarity and exposure to Bitcoin can increase understanding and usage over time. They draw parallels to other technological advancements, such as smartphones, highlighting how older generations initially struggled to grasp their functionality but eventually adapted. While acknowledging that not everyone will fully comprehend Bitcoin, they believe that wider adoption and user-friendly interfaces will gradually increase the percentage of people who understand and use it.
Plan based on current reality
It is important to plan our finances and investment strategies based on the current reality rather than speculating on future outcomes. Making decisions without considering the present situation can lead to poor choices, whether it's in Bitcoin or traditional finance. Long-term horizons and a time frame of at least five years should be considered when thinking about investing in Bitcoin. It is crucial to align our Bitcoin holdings with our circumstances and be willing to reassess and adapt our strategies accordingly.
Bitcoin as a long-term investment
Bitcoin should be viewed as a long-term investment akin to holding stocks for a decade or more. The volatility of Bitcoin's price over shorter time frames can introduce uncertainty and potential losses. Holding Bitcoin for at least ten years allows for experiencing multiple cycles and mitigates the risk of buying and selling at unfavorable times. When Bitcoin constitutes a significant portion of one's portfolio, it becomes the main driver of returns, both positive and negative. Safe withdrawal rates for individuals with concentrated Bitcoin holdings differ from traditional fiat-based portfolios, requiring careful planning and monitoring of expenses to secure financial stability.
Scarce Assets: a biweekly podcast presented by Onramp which delves into the emergent role of Bitcoin in finance professionals' strategies and outlooks. Hosted by CFP, Andy Edstrom, and former hedge fund manager, Jesse Myers, Scarce Assets provides invaluable insights for wealth managers aiming to outperform their peers in the decades ahead.
Finance professionals everywhere know about stocks and bonds, but the macroeconomic outlook requires that serious investors pay close attention to another category: Scarce Assets.
0:00 - Introduction to Morgen & Pierre
4:18 - Speculation, investment, & savings
10:02 - Savings technology in a portfolio context
13:31 - Long-term financial planning
21:38 - Market timing & time horizons
31:37 - A message from Onramp
31:53 - Capital allocation & budgeting in BTC mining
40:58 - Preview of Morgen's new book
46:10 - Understanding bitcoin & tech adoption
51:01 - The need for better money & monetary rails
59:10 - Wrapping up
Schedule time with the link below if you would ever like to learn more about Onramp and please sign up for Research & Insights to get access to the best content in the ecosystem weekly:
https://onrampbitcoin.com/contact-us/https://onrampbitcoin.com/category/onramp-media/
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