[XorNot]

Ray Dalio at no point in his life ever believed he should be keeping his wealth in "cash". It has been basic economic knowledge that cash is a terrible place to keep large idle piles of wealth, and that it has to be invested to not depreciate.

This is not new information, this is literally by design as a product of the Fed's 2% inflation target.

US treasuries have always been a last resort investment, because the return sucks but they're as close to risk free as anything ever gets - what's happened recently is demand for them has been so incredibly high (because better investments are so rare) that the US has at various points been able to issue them with negative interest rates - taking a loss has been less of a loss then just holding currency and no better options existed.

Crypto has a narrative being pushed to increase the value of crypto, but "the end if nigh" doomsayers definitely don't act like they think it's actually coming - otherwise they'd be diversified into Swedish gold depositories and basically planning to move country. Because come whatever "collapse" they think is going to happen...the power company is still going to want to be paid in USD.

[jasode]

>Ray Dalio at no point in his life ever believed he should be keeping his wealth in "cash".

I'm not saying that. His recent "cash is trash" was talking about staying away from investments like US government bonds because of negative yields and money printing: https://www.youtube.com/watch?v=tZyWVxGXPHo&t=24s

(Because in the past, reasonable people did believe that buying and holding US Treasuries was a semi-decent way of investing. To be clear, we're not talking about just leaving pure cash in a $250k FDIC-insure bank savings account.)

>the US has at various points been able to issue them with negative interest rates - taking a loss has been less of a loss then just holding currency and no better options existed.

And this is the part I was responding to in your first comment. It's not just speculators. Another narrative for crypto's rising price is that some investors believe a better option now exists for preserving purchasing power. This is the defensive financial perspective that can simultaneously exist with other market participants who are only in bitcoin for the casino gambling speculation.

Yes, some people buy real estate and just leave the houses empty for "speculation". But some others also buy houses to live in them and many buyers bid up prices with competing offers because of desirable location closer to the office. If there can be 2 or more different narratives for rising real estate prices, why can't there be multiple narratives to explain crypto?

[XorNot]

I'm not dismissing the idea that "some" investors believe that, I'm dismissing the idea that they're a big enough group to matter in anyway. Or that they're likely to believe it for very long over looking at how much USD they think they'll cash out for. And if they were looking for a stable store of value, an asset under enormous speculation is a terrible choice.

The real estate comparison is also irrelevant: unlike any other asset, cryptocurrency doesn't do anything useful.

[lottin]

> is literally by design as a product of the Fed's 2% inflation target

Holding more cash than you need for transaction purposes is inefficient, regardless of the inflation rate. This is because what makes holding cash a bad idea is not the fact that it depreciates over time (in inflationary circumstances), but the fact that holding cash has an opportunity cost, and that opportunity cost is unaffected by inflation.