World leading economy and banking expert, Kelly Korshak believes that Bitcoin is the Cadillac of cryptocurrency, because all the other cryptos have not participated in the same way. This year, Bitcoin has crawled its way from seventeen thousand to thirty thousand dollars.
“When I think of cryptocurrencies, especially in an emerging market like this, I only think of Bitcoin. I am a believer in cryptocurrency, but I am a believer in the cryptocurrency that has the greatest probability of surviving all attempts by central government to attack, and central banks as well,” says Korshak.
Kelly’s personal opinion of crypto is that it should be in everybody’s portfolio, including those that are retired. However, it shouldn’t be any more than 5% of your portfolio. He says that if crypto is maybe something that will go from $30,000 to maybe a half a million dollars one day, then it will definitely serve its purpose as a portfolio stabilizer, as well as a profit center, even with as little as a 5% investment of your total liquid net worth.
“So, if you have a hundred thousand dollars, and invest no more than five thousand dollars in crypto, that five thousand dollars can go a long way. We’ve learned, in general, it doesn’t completely behave like the stock market or bond market. I feel there is a future in cryptocurrencies, and you should have some investment in it,” explains Korshak.
As far as risk tolerance, so many people diversified into a lot of coins, that are now completely gone. When asked whether these people should liquidate or take a loss, Kelly replied that he would do both. He’s not a believer in the derivatives of these products, because the derivative of these products is what enamored people.
“I’m not a supporter of a product that is paying you, for example, an interest rate in the form of Bitcoin. I am not sanguine about the long-term aspects of these things really being able to pay you back, even the original Bitcoin that you put into it,” adds Korshak.
Companies like Coinbase and Binance, their stock prices have gone way down. That’s kind of a telltale thing that we are still in the emerging parts of this industry, and that doesn’t mean it won’t continue to emerge, it just means that the strongest players are the ones you want to participate in. The strong players are Bitcoin, Ethereum, and maybe Litecoin.
Remember all the apps that were behind Bitcoin, that you could transfer your Bitcoin into, and then reinvest it to get paid in more Bitcoin? When the FTX collapse occurred, so did they.
“All of a sudden, when you see yourself making interest in something you can’t really measure, I would encourage people that have these outside accounts to slowly wean yourself off them. Try to recover the money you perceive to be there and get it back into Bitcoin, explains Korshak.
Bitcoin is a strong example, if it’s just in a wallet, and it’s in a company you understand, like Binance or a Coinbase, you will probably find that those things really will appreciate over time, and they do represent a long-term play in many people’s portfolios.
Through the years, there’s been talk of other companies like JP Morgan, trying to come out with their own digital currency. Facebook presented its own digital currency, and now the Federal Reserve is saying they’re going to create a digital asset as well. What they’ve all caught onto is, the fact that cryptocurrencies are here to stay, and people, especially the younger generation, like them.
Cryptocurrencies were embraced because of a deep distrust of central banks. Bitcoin was a product of the 2008-2009 financial crisis, when the banks failed abysmally, and this currency was created to be able to counter that. Bitcoin is a centralized currency, it has no allegiance to any sovereignty, no allegiance to America, European countries, or China.
“So, we all in a way own a piece of this particular kind of cryptocurrency, and the first one, of course, was Bitcoin,” adds Korshak.
My feeling is that these banks, and now the central government, or this Federal Reserve, have decided to say, we’re going to create a digital currency. And the reason they’re doing that is to say we will create a safe digital currency, that will fiat, though against our own currency, which is the US dollar. That means they’re going to try to keep it consistent with the dollar. So, anything ownership in that is no better or no worse than a dollar. There is no real upside in it, it’s created more for convenience.
That is not an asset class. Whereas Bitcoin, which is decentralized, has no allegiance to sovereigns, is an asset class. This is an attempt by an older generation to regulate what they feel is a threat to what they have grown up with. However, I feel I’ve embraced it in a different way, feeling that there are long-term values of a central currency, that has nothing to do with any sovereign. I’m against ownership, and any of these digital currencies created by sovereigns. I feel they will ultimately fail, because they’re missing the fundamental fact that it was the real desire for these people, along with the possible possibility of price appreciation, is the fact that it has nothing to do with the central banks.
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