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I say things on Twitter

12/22/17

Regarding asset classes

An asset class is an end, it is not the means to an end.

Bricks, timber, copper (wires or tubes) etc are not asset classes. But put those means to an end together in the right way and build a house . An end product, you have yourself an asset class (which in fact implies the pure asset class is land, but let's not dwell on details).

Bonds and treasury papers are asset classes. For sure they're tradable, but the underlying reason for them is to buy, own, then collect the currency they throw off. They're an end product.

Equally, gold is an asset class. You may not like the idea of digging something up from out the ground, making it pure, turning it into blocks and then burying it in the ground again (this time under lock and key) but plenty other people do (including central banks). The reserve status of gold is why it has remained popular since hunter-gathering went out of fashion.

Bitcoin is not an asset class, just look at the chart. When people are eager to exchange dollars for something (while going up) and now desperate to exchange that something for dollars (on the way down), which is the asset and which is the vehicle for a trade?

So you can think what you like about the wonderful new world of crypto, but stop all this nonsense about it being an asset class. And remember the name of anyone trying to sell you on the concept, as they know not of what they speak.