One of my favorite reads this weekend is Oaktree Capital co-founder Howard Marks’ latest memo to clients- “Yet Again?”
I can totally relate to the issues he highlights about Bitcoin and the numerous digital currencies we have these days. Particularly, i fully understand the honest statement he makes –” I think I understand what a digital currency is, how Bitcoin works, and some of the arguments for it. But I still don’t feel like putting my money into it, because I consider it a speculative bubble. I’m willing to be proved wrong” ( Page 8 of the Memo “Yet Again?”)
In fact, Just a few weeks ago, a friend of mine, and a reader of my blog, wrote me a message on WhatsApp after I shared an article about How Bitcoin Is Reducing The Need For Trade financing.
She asked me-
“Rahab, what do you think of Bitcoin and all these digital currencies I hear about? You know, I still don’t understand this whole buzz in Finance these days.”
She continued to ask me –
” And with all this fraud going on these days, Is it real, or is it another one of those scams? I hear people are making tons of money in this business. But how?”
I had to be honest with her. I told her,
“Reen dear, I am still learning about these things too.”
From his memo, i believe there is a lot investors can learn. For example, It’s not enough to accept Bitcoin merely as a medium of exchange. For investors, it is also worth considering issues such as ‘Bitcoin price volatility and it’s future’ and some of the ‘factors that lead to it’s volatility.’
Still wondering what Bitcoin is and how it works? A great place to start is by reading this article ‘Why Bitcoin Matters’ by Marc Andreesen, the co-founder of the venture capital firm Andreessen Horowitz.