FTX Failure Shows Trading Is Gambling
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This is an opinion editorial by Mark Maraia, an entrepreneur, author of “Rainmaking Made Simple” and a Bitcoiner.
I find it tragic to note the number of people in the U.S.A. who are being forced by the Federal Reserve’s monetary policy to take risks with their hard-earned capital. Those of us fortunate enough to already possess wealth are buying overpriced homes, overpriced stocks, overhyped cryptocurrencies — and bitcoin. To quote Senator Lummis amongst others, “Thank God for bitcoin.”
The collapse surrounding the centralized exchange FTX is the latest example of why I hate trading and investing, especially when it comes to the sh*tcoin market. Not only do you bear incredible risk as you essentially gamble on the “assets” listed, but the entity that holds your money is gambling with it too! The entire time, you are trusting a third party which is only interested in making money with your money — and not giving you a fair chance trading, while they’re at it.
I’d contend that the well informed “investor” will see fantastic ROI well in excess of inflation and money printing and enjoy the least amount of risk by “investing” in bitcoin. In my early days as a lawyer, one of my mentors was the executive director of a non-profit that provided housing to widows and orphans. He would frequently say this organization was only allowed to invest in widows and orphans stocks which were blue chip, by which he meant they involved less risk and were likely to be around for the long term. Even though it’s not mainstream yet, I believe that bitcoin is the best savings technology in the history of our species. I’m confident that Bitcoin will outlive me, my children and grandchildren. My mom was a shrewd buy-and-hold investor who heavily influenced my distaste for trading and my preference for long-term investing.
Early in my career in the mid 1980s, I served as a defense litigator for a penny stock firm and learned that our financial markets have been rigged for a very long time. So I’ve never been a trader and my record as an investor was spotty until I invested in bitcoin. I see all the altcoin scams today and it reminds me of the penny stock era. I’m not trying to convince you that the markets are rigged but — I only share that view to help the reader understand why I hate trading and investing. I want a level playing field. What I learned is, there have been plenty of cronies and insiders getting preferential treatment, making them rich for many decades — and it seems to be getting worse. I want something that operates on a level playing field and treats everyone the same. I want to buy and hold this asset for a decade or more and be confident it will hold its value. I want one that I won’t lose sleep over. The long standing safe havens don’t work anymore when the Fed is devaluing the currency at double digits every year. Add in the “negative interest rate” of having to pay a financial institution an annual 1% or more for managing my financial assets in IRA’s or 401K’s and you become very cynical. Watch out for the hidden 12b1 fees in mutual funds too. Watch out for the middle men who sit between you and your investments. Everyone wants a cut from your wealth.
What I really want as a boomer who is semi-retired is a savings technology that is so secure and bulletproof that it has no peer. Ideally, one that comes with its own digital delivery system —payment rails — that has never been hacked and operates with near perfect uptime. Well, that is bitcoin. I want a savings technology that has no third parties standing between me and my assets. I don’t want an IOU from a bank or a brokerage firm or a financial institution; I want bitcoin. I want a savings technology that is so transparent you can search the timechain all the way back to the Genesis Block. That’s bitcoin. I want a savings technology that preserves my hard earned wealth, life force and purchasing power many years into the future with little risk. That’s bitcoin. I want to save in an asset that is based on absolute scarcity. That’s bitcoin. I want to own an asset that can be bought or sold 24/7/365 days per year and is more liquid than U.S. Treasuries. That’s bitcoin. I want an asset that you must choose and is still early in the dial-up phase of adoption. That’s bitcoin. I want an asset that completely removes the need for me to be an investor on Wall Street. I want an asset that allows me to opt out of the fiat system. That’s bitcoin.
Was the learning curve on bitcoin steep? Absolutely, and worth it! What you will find, if you put hundreds or even thousands of hours into doing your homework, is that the ROI in bitcoin has made it far and away the best performing asset class for the last decade and it has no peer. With the wall of adoption happening in bitcoin by nation-states, wealth funds, hedge funds, Wall Street and family offices, along with recent increased regulatory certainty, bitcoin has been derisked. Ray Dalio prefers bitcoin to bonds. In my opinion, based on extensive research, bitcoin presents a lower risk profile than any other asset class in a manipulated interest rate world. Properly self-custodied, (which is a task in itself) it affords much less risk than the U.S. dollars sitting in my bank. Why? Because I don’t hold those U.S. dollars in my possession — all I have from my bank or financial institution is an IOU for dollars. And as we’ve learned throughout history, governments, banks and nation-states have an unseemly track record when the unexpected happens and they have the power to take our money outright such as what happened in Canada, in Cypress or by stealth through currency debasement.
For those of you still on the fence, I encourage you to begin your homework today. I find it shocking and tragic that our school system does not teach us from an early age about money. This is so vital, I recently taught several classes of seventh- and eighth-graders about money and bitcoin and will challenge those who feel up to the task to do the same! There is nothing I’d love to see more than one hundred thousand bitcoiners going into their local classrooms to teach youngsters about money and bitcoin. Please contact me and I’ll share my outline and approach. Closing your knowledge gap around money and bitcoin will give you an unfair advantage over those too lazy, ignorant or fearful to do the work. And once you do you won’t regret it. As the proverb says, “A journey of 1000 miles begins with a single step.” Bitcoin is a language that is well worth learning. Bitcoin is also a belief system that is gaining adherents through network adoption faster than any other technology in human history. I suggest you get on the train or take the risk of getting run over by it.
This is a guest post by Mark Maraia. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.
