Insightful Investor #39 - Michael Green: The Bitcoin Bear Case
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Sep 24, 2024 Michael Green, Chief Strategist and Portfolio Manager at Simplify Asset Management, shares his expert insights on the Bitcoin bear case. He explores how market efficiency and passive investment strategies shape market valuations. Delving into the evolution of money, he discusses blockchain's transparency and Bitcoin's speculative nature. Green critiques Bitcoin's status as a currency versus a speculative asset, questioning its long-term viability while examining societal implications and the need for a deeper understanding of investments.
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Market Efficiency and Passive Investing
- Market efficiency relies on equal information access, but large players disrupt this.
- Passive investing's growth has created structural changes, impacting valuations and volatility.
Passive Investing's Performance and Risks
- The shift to passive investing is driven by perceived performance, not cost.
- Systematic passive flows inflate valuations, creating risks when these flows reverse.
Blockchain's Potential Beyond Cryptocurrency
- Blockchain, a distributed append-only database, has broader applications beyond cryptocurrency. It offers transparency and can be used to track transactions, like 13F filings, and even analyze market events.