No. of Recommendations: 9
“I'd be more worried about crypto and all of its derivatives.“
As a huuuge fan of ‘The Big Short’ movie, I would be appreciative if you might explain this?"
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No particularly great insights. I don't own crypto. Have never really understood it.
We know what Warren and Charlie think/thought of bitcoin. Charlie called it "rat poison squared, a venereal disease, etc.."
Bitcoin's price has dropped ~21% in the last month. Wondering if we are starting to see a serious unwind?
I've been playing with various LLMs asking about building risks in the crypto world. Different AI versions predict surprisingly high probabilities of a crypto collapse. Getting educated on some of the inner workings of the crypto world. Still loads I don't know/understand.
Didn't realize investors are apparently able to take leveraged bets — executed through derivatives like perpetual futures, options, and margin trading on platforms such as Binance, Bybit, or Deribit— allowing them to amplify exposure to Bitcoin (BTC), Ethereum (ETH), and altcoins using borrowed funds. Leverage ratios apparently can reach 10x to 125x. A "measly" $1,000 position can control $10,000–$125,000 in assets. Munger spinning in his grave.😬
Buffett: "“I think every time you buy a nonproductive asset, you’re counting on somebody else, later on, to buy a nonproductive asset, because they think they can sell to somebody for more money,” Buffett said. “It does come to a bad ending.”
Speaking of bad endings, what happens when you leverage up that non-productive asset 125x ...and then the price of the asset starts falling? What are the knock-on effects? AI tells me the combined "value" (note my parentheses) of the crypto ecosystem is well over $3 Trillion.
We had some interesting equity price action today with NVDA reporting blowout earnings yesterday potentially dispelling the "AI bubble" thesis. And yet the Mag 7 and NVDA were all down. Strange action. Early collateral damage?
Bitcoin's price chart is highly correlated to NVDA's & TSLA's 2025 stock. Correlation to other MAG 7 names is lower but still correlated.
Might be nice to have $340 billion or so on hand in case of a downturn?
What do I know?
