3x Tech ETFs Destroy Bitcoin

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2021-08-22 16:00:08

If you visit cryptocurrency reddit subs, one thing you may observe is that hardly anyone is making money, for reasons discussed earlier: too much volatility relative to returns, inconsistent gains, exchange hacks, and other reasons.

Turing a $100 deposit in Coinbase into $200 is considered an enviable success in in the world of crypto. It does not matter how much coins may go up, it’s chump change all the way down. Crypto is a lot like fantasy football or poker. These activities have huge communities in which members will gush on about their favorite strategies or their favorite players, but in the end no one is really making any money.

Compare any cryptocurrency sub to /r/wallstreetbets. In the latter is pages upon pages of 5, 6 figure, or higher gains, with a smattering of memes, but the point is, people are actually making tons of money with stocks and options, large losses not withstanding. Traders on Robinhood not uncommonly turn $400 into $10,000 and so on with just some simple bullish options bets on FAANG stocks, which is such an apparent rarity in crypto that it’s enough to launch a successful YouTube career to show others how to make a McDonald’s salary.

Two months ago in the post Why Stocks Beat Crypto, I predicted that Bitcoin’s returns would significantly lag 3x etfs and individual large cap tech stocks, and argued that the latter is a superior investment. Since then, the performance gap has only widened:

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