My first trip to Las Vegas remains vivid in my memory. Fresh out of college, I was invited by my best friend for a spontaneous getaway. We stayed at the Hard Rock Hotel, surrounded by an electric atmosphere and smaller, more intimate gaming tables. For someone my age, it felt like the perfect adventure.
Even after 27 years, I recall playing blackjack for hours. Starting at a $10 minimum table, a stroke of luck quickly led us to increase our bets. Within two days, I had won approximately $1,700. But the tides turned on the third day. By evening, my friend had lost $750 and decided to call it a night.
I was down to just $300 of my initial winnings. Unlike my friend, I wasn’t ready to quit. Driven by the desire to recover my losses, I took a chance at a $100 minimum table. Fortune smiled upon me once more—within 20 minutes, I turned $300 into $3,000. By the time I returned home, I had netted around $3,600. For a 23-year-old in the late 90s, that was a life-changing sum.
Early Lessons in Stock Market Investing
Our early experiences often shape our perspectives. My first trip to Vegas felt like a triumph—a mix of incredible luck and youthful ignorance. Back then, with only $700 in my bank account, betting $100 per hand felt thrilling rather than reckless.
A similar lesson awaited me in stock market investing. I began my career at Forbes during the peak of the dot-com bubble in early 2000. In the months before I joined, my department had recommended stocks like eToys, VerticalNet, and Healtheon—companies riding the wave of internet hype. Each had surged between 66% and 99% within three months. The standout was Qualcomm, which had soared about 2,600% the previous year.
Inspired, I opened my first brokerage account. Unfortunately, my timing couldn’t have been worse—the internet and tech crash had just begun. My first two investments were in Net Perceptions and Wind River Systems, both of which are now defunct. I held onto them as their values plummeted, eventually losing 75–80% of my investment. It was a painful but necessary lesson: I knew nothing about investing and had blindly followed the hype.
Embracing Value Investing
In the years that followed, I dedicated myself to learning. I pursued the Chartered Financial Analyst (CFA) designation, became a stock analyst, and gained experience identifying undervalued companies across industries. My early losses had left a lasting impression.
Influenced by Warren Buffett’s philosophy and Benjamin Graham’s "Security Analysis"—often called the bible of fundamental investing—I adopted a value-oriented approach. I sought companies with strong future cash flow potential, purchasing their stocks only when they traded significantly below their intrinsic value.
For example, after the September 11 attacks, our department recommended Amazon at $7.48 per share. I bought 200 shares but sold them four months later at $12.20 per share. Those same shares would be worth approximately $880,000 today—a reminder of the cost of impatience.
Still, my disciplined approach paid off more often than not. By avoiding hype-driven investments like Kozmo.com (a now-forgotten dot-com failure), I built a stable financial foundation without taking excessive risks.
Discovering Cryptocurrency
Given my background, it might seem surprising that I began investing in Bitcoin several years ago. Many view Bitcoin as the epitome of speculative hype—the polar opposite of value investing. It generates no earnings and has no tangible underlying assets.
Yet, in late 2020, I bought 500 shares of the Grayscale Bitcoin Trust (GBTC), then one of the few ways to gain Bitcoin exposure through a fund. Over time, I expanded my holdings to include Grayscale’s Ethereum Trust (ETHE) and the Bitwise Bitcoin ETF (BITB).
These investments haven’t been without volatility. During the brutal 2022 downturn, my crypto portfolio fell more than 80% below its cost basis—my largest unrealized loss ever. But instead of retreating, I continued investing during the decline and even bought more during rallies.
For instance, I purchased BITB in mid-January 2024, when Bitcoin traded around $43,000—significantly higher than my previous GBTC buys at $28,000. This decision went against my typical strategy of buying only during dips.
Why I Invest in Cryptocurrency
As a self-proclaimed value investor, why would I consistently allocate capital to an asset with no intrinsic value? The answer is simple: my sons believe it has value.
In 2020, during the height of the COVID-19 pandemic, my oldest son—then in first grade—asked if I owned Bitcoin. One of his classmates had boasted about their father’s Bitcoin profits, and my son was curious. I told him I didn’t own any and dismissed Bitcoin as worthless. Still, he wanted to buy some. He was six years old.
That’s when I realized Bitcoin had existed longer than both my sons. To them, Bitcoin had always been valuable. This perception has only grown stronger. Today, my 10-year-old checks the price of GBTC almost daily. He owns 10 shares, purchased with years of saved allowance money. He prefers holding these over cash.
My generation and those before us have accumulated most of the world’s wealth. Many of us see gold as a safe-haven asset—a store of value and hedge against inflation. But to my son, gold is simply the necklace around his neck—a chain his grandfather bought 40 years ago because, to him, gold had always held value.
When our generation is gone, our children will decide what has value and what doesn’t. Critics argue that comparing Bitcoin to gold is unfair—gold has industrial uses and physical properties. But only about 7% of mined gold is used industrially. The rest is held as jewelry, coins, or bars. Gold is valued not just for its beauty but for its perceived scarcity.
The same is true for Bitcoin and my sons. We are products of our time. I grew up in an analog world where value was tied to physical objects—cassettes, VHS tapes, CDs, and DVDs. My sons have never used these. To them, streaming from the cloud is as natural as renting a video was for me. They are digital natives comfortable with intangible value.
Acknowledging the Risks
Despite my optimism, cryptocurrency remains a high-risk investment. The market is filled with uncertainty, and most of the nearly 18,000 cryptocurrencies in existence will likely fail. I concentrate my holdings in Bitcoin with a small allocation to Ethereum. In my view, these are the only two with enough legitimacy and adoption to endure—the digital equivalents of gold and silver.
Investing in crypto requires accepting the possibility of a total loss. Only allocate capital you can afford to lose. I’m no longer the reckless 20-something who thought betting $100 with $700 in the bank was a good idea. I understand the risks and ensure crypto represents only a small part of my family’s overall portfolio.
The Role of Adoption
For Bitcoin to maintain its value as a store of wealth or medium of exchange, its price must continue rising. This depends largely on supply and demand dynamics.
On the supply side, Bitcoin is inherently scarce—capped at 21 million coins, with over 19 million already mined. Its inflation rate decreases with each halving event.
Demand, therefore, is the critical variable. Fortunately, several developments support growing adoption. The most significant was the approval of Bitcoin ETFs in January 2024, which I believe catalyzed Bitcoin’s 66% surge leading up to the U.S. election.
Bitcoin’s subsequent breakout above $100,000 was fueled by expectations that pro-crypto policies would follow the election. Adopting Bitcoin requires believing demand will keep growing. For some, this faith stems from Bitcoin’s technological advantages—its decentralized blockchain enables fast, low-cost global transactions. For me, it’s about who will decide value in the future.
As long as demand continues rising against limited supply, upward price pressure seems inevitable. Some proponents even predict Bitcoin reaching $1 million by 2030.
Planning for the Future
By 2030, my oldest son will be two years away from graduating high school. I’m not investing in Bitcoin to get rich quick. It’s part of a broader strategy to fund my children’s education. Assuming both attend four-year universities without financial aid, their education will likely be our largest expense before retirement—even exceeding our remaining mortgage.
I know some readers will find my reasoning flawed. It contradicts the principles I’ve followed as a value investor. If I’m wrong, this will be an expensive lesson for my son and me. But it won’t bankrupt us—our crypto holdings are sized appropriately within our portfolio. If I’m right, however, it could meaningfully ease the financial burden of education.
I may no longer be the carefree gambler I once was, but even for a traditional value investor, the potential upside is too compelling to ignore.
Frequently Asked Questions
What is value investing?
Value investing involves buying securities that appear undervalued relative to their intrinsic worth. Investors using this approach analyze fundamentals like cash flow, earnings, and assets to identify opportunities the market has overlooked.
Why do some investors compare Bitcoin to gold?
Both Bitcoin and gold are scarce assets not tied to any government or central bank. They are seen as stores of value and potential hedges against inflation and currency devaluation, though gold has a much longer history and industrial uses.
What are the biggest risks of investing in Bitcoin?
Bitcoin faces regulatory uncertainty, volatility, technological risks, and competition from other cryptocurrencies. Its value is purely based on market perception rather than cash flow or physical utility.
How can someone start investing in Bitcoin?
Individuals can buy Bitcoin through cryptocurrency exchanges, brokerage accounts offering Bitcoin ETFs, or specialized trusts. It’s important to research fees, security, and regulatory compliance before choosing a platform.
Why is adoption important for Bitcoin’s value?
Wider adoption increases demand against Bitcoin’s fixed supply, supporting its price. Adoption by institutions, governments, and retail users reinforces its legitimacy as a store of value and medium of exchange.
Should Bitcoin be part of a long-term investment strategy?
Bitcoin remains highly speculative and should only represent a small portion of a diversified portfolio. Its role depends on individual risk tolerance, investment goals, and belief in its long-term potential. Consider consulting a financial advisor to determine if it aligns with your strategy.
For those interested in exploring tools to monitor cryptocurrency trends, you can view real-time market analysis tools to stay informed.