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Thanks for the ref, that looks interesting. (I love when people post references!)
The crazy thing about index funds that's relevant to btc is the power of automaticity. Almost everyone does a bad job picking stocks (truth) and index funds are better by default for almost everyone who wants equity exposure (truth), and eventually word of that got out, and so a zillion people auto-invest in index funds now. It's like a portion of GDP auto-pumps the S&P.
There was a bitcoiner I heard on a podcast, I can't remember his name (help?) who was talking about the insane power if bunches of people just DCA modest amounts into btc every month in the same way they currently do w/ index funds. I found that to be a very strong argument; it suggests the massive upside available once people believe it to be a sane move. The most plausible self-fulfilling-prophecy aspect of btc I have yet encountered. Makes the case for Swan, River, all the more compelling IMO.
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oh wow that's a fascinating perspective on the pleb DCA bull-case. I am curious what you think the catalyst (could) be for folks to start coming to the realization that passive accumulation is the sane move? Also if you had any timeframes in mind (much harder, but interesting nonetheless!)
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I think the catalyst is belief and familiarity, which I harp on a lot. The ancaps are already all-in on btc. Many of the goldbugs are there. A lot of fringe sub-cultures. This is fine, this is the normal way disruption unfolds, at the corporate level, at the cultural level. But now it's time for the other 95% of the world to get on board, and that requires good arguments that don't stink of some lunacy, whose public face is not dipshits who think women should be sent to breeding camps to fix the demography problem.
It's therefore super valuable to translate the virtues of btc into terms, and a vibe, that normal people understand. There is no hyperbitcoinized future where the human race is transformed into self-sovereign warrior kings eating raw deer hearts and fighting off mutants to keep their Coldcard safe. That is not going to happen, ever. The future will be full of people much like those in the present and the past, who just want to live their lives and think about this shit as much as you think about how your furnace works or how the electricity comes to your house.
Anyway. That's the catalyst, imo -- normal things that slowly turn the giant ship of the world. Not a complete re-architecting of how the global public lives and thinks. And the timescale for that will be decades. What remains to be seen is how many decades, and what happens on the way, e.g., does btc go back to the dark ages for two generations first? I sure hope not, but we'll see.
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100% agree with you - especially about how most people won't really spend the time to dig into the nuances of how Bitcoin and/or Lightning work. Love the furnace analogy; reminds me of Sergei from Bitrefill's point about how (most of us) use cars, but we don't all go to car meetups/conventions. Point being, we are a fervent minority lol.
IMO a reasonable catalyst is the proliferation of obviously useful products and services -- obvious to normies, which is the important distinction.
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Yes. I was thinking about posting that later this week -- what are actually useful services where it is the service itself, and not its btc-centrality, that you like? This is why SN is so important. It's like, really, honestly, useful, and it's getting more useful, and the road to its ultimate utility is only possible bc of what btc allows. What other things are like that? Anything?
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Gaming, podcasts, anonymous charitable donations, remittance payment rails, insurance, and peer 2 peer ads come to mind.
I'm sure I'm missing some categories.
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There is no hyperbitcoinized future where the human race is transformed into self-sovereign warrior kings eating raw deer hearts and fighting off mutants to keep their Coldcard safe.
tbf I'd tear through that fiction novel
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Added you to the list.
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default for almost everyone who wants equity exposure [...] a zillion people auto-invest in index funds now
Sure things in markets scare the crap out of me. It's the mentality I associate with the the 2008 real estate crisis. I can't connect the dots on how index funds might fail, because it isn't retail that's levered up this time, but it feels like a ticking time bomb.
I used to be all-in on robo-invested index funds ~6 years ago but literally everyone I knew began recommending them so I got out.
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Yeah, you're not wrong (I don't think) but it is what it is. This is how people "save" and it's kind of the most reasonable way, right? Aside from btc, and perhaps inclusive of btc for the last few years?
It's a strange and complicated topic, when things become so predictable that all this infra gets built around the assumption of their predictability; gets knitted into the foundation of the world, the way the Catholic church did back in the day.
And eventually a reformation. Although I guess someone already used that metaphor. And then god died, and someone else wrote about that already, too.
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It is the most reasonable way (excluding us weirdos into hard money stuff).
Maybe they've somehow made it a sound system. It's corporations that are levered up now and they are credit worthy so long as they don't starve retail. Corporatocracy is probably a quasi-stable nightmare.
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Good article.
He warned the flood of millennial money into index funds and ETFs was fueling unsustainable valuations and putting the stock market in a precarious position. "Parabolas don't resolve sideways," he said.
Although this:
"People are missing the boat," he added, noting that he expects the best active managers to consistently trounce the market.
Here's my guess: Peter Lynch defines "the best active investors" as "the ones who trounce the market" and therefore the statement is non-falsifiable.
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Even more wild is that those three firms all own majority stakes in each other 🤯
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Now they're doing the same in real estate. Literally moving to become the owners of Earth ... all because the only way the average person can save is to invest.
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Footnotes