The 2022 Reality "Risk-free" assets lost 30-50% of value. The foundation of portfolio construction was revealed to be an illusion. From: Bitcoin for Institutions

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

Pensions are the king when it comes to OPM expertise. By OPM, I mean "Other People's Money." Everybody is an expert on how to manage other people's money, and nothing brings out people's greatest and wildest ideas like pensions. There is very little written about pensions that is truly original - but as an actuary with 30 years of experience who understands both pensions and bitcoin deeply, some insights can be offered. From: Pensions

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

Key Insight from Bitcoin for Institutions: 2. Small allocations generate significant alpha - even 1-2% bitcoin can meaningfully improve portfolio Sharpe ratios. Chapter: Mutual Funds / ETFs - Wielding the Blade

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

Key Insight from Bitcoin for Institutions: 5. 100% allocation is justified for pensions that will survive the next two halving cycles (eight years). Chapter: Pensions

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

As an engineer, Saylor explained the properties of bitcoin from an engineering perspective in a way that is likely responsible for levelling up the understanding of bitcoin from "Magic Internet Money" to "Thermodynamically Sound Digital Real Estate." Saylor's worldview was simple. He had a $250 million pile of cash in 2020 and was looking at an epic monetary debasement of Western fiat currencies. The US was on its way to printing $7 trillion over an M2 monetary base of $15 trillion. $7 trillion printed over $15 trillion M2 base - nearly a 50% expansion of the money supply in a short period. Western cash holders were caught off guard, lulled into complacency by fifteen years of gaslighting ab... From: Strategy (Balance Sheet Strength)

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

The Action In August 2020, he converted $250 million into approximately 21,000 bitcoin. The rest is monetary history. From: Bitcoin for Institutions

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

Circular Economies Bitcoin holders who build relationships and trading networks create more powerful capital than passive accumulators. From: Bitcoin for Institutions

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

Key Insight from Bitcoin for Institutions: 4. Corporate balance sheet holdings require a dominant individual (like Saylor) to overcome institutional pressure to sell. Chapter: HODL'ing Bitcoin is Irrational

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

The Crime Argument The reality is that the majority of criminal activity in the world happens in US dollars—a much preferred network for crime than an unencrypted public ledger. From: Bitcoin for Institutions

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

Key Insight from Bitcoin for Institutions: 3. BlackRock pivoted dramatically from calling bitcoin "only useful to money launderers" to launching the largest bitcoin ETF. Chapter: BlackRock (Redefining Portfolio Construction)

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

Key Insight from Bitcoin for Institutions: 1. Institutional resistance is ruthless - incentives, not logic, drive corporate decision-making. The LDI story proves this. Chapter: Epilogue

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

Validation Costs Even if secured, it's extremely expensive to prove its existence and authenticity. Gold bars need to be melted down and assayed. From: Bitcoin for Institutions

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

Human action is based on an individual's unique set of circumstances at a given moment— specifically, the largest source of dissatisfaction that can be removed at the lowest cost. This is the water/diamond paradox : a person would forgo all the diamonds in the world for their first glass of water. From: HODL'ing Bitcoin is Irrational

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

📝 That ability is no small thing. There are a number of tradeoffs to consider, and the reality is that it takes a long time of mulling through one's personal discomfort before the security of your bitcoin allows you to sleep soundly at night. From: Bitcoin Custody Requires a Higher Understanding of Tradeoffs

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

Key Insight from Bitcoin for Institutions: 1. FASB ASU 2023-08 enables mark-to-market accounting for bitcoin, removing a major barrier to corporate adoption. Chapter: Treasury / Balance Sheet - Having Optionality

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

Key Insight from Bitcoin for Institutions: 1. Institutional resistance is ruthless - incentives, not logic, drive corporate decision-making. The LDI story proves this. Chapter: Epilogue

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

Key Insight from Bitcoin for Institutions: 1. Ordinary bitcoin holders outperformed every professional fund - fund managers who ignored bitcoin have explaining to do. Chapter: Mutual Funds / ETFs - Wielding the Blade

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

ℹ️ While gaining ETF exposure is a rational position for those not ready for self-custody, it does not make for a landscape to provide robust solutions to the public using bitcoin. The ETF is capable of capturing the volatility of bitcoin's price exposure but at an enormous level of counterparty risk. From: Bitcoin Custody Requires a Higher Understanding of Tradeoffs

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

Institutional Holdings Even dedicated institutions like Strategy will act like individuals with limited power in the Bitcoin economy. From: Bitcoin for Institutions

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors

The Question If there's no risk-free asset, where does bitcoin belong in an investment portfolio? This is what BlackRock had to grapple with. From: Bitcoin for Institutions

Bitcoin for Institutions | Math Academy

Interactive course on Bitcoin for institutional investors