Crypto: Learning about Liquidity

As I embrace the golden age of the retail investor, I’m pretty comfortable with stocks. The tealeaves of charts fascinate me, but I’m more of a ‘current value of future cash flows in perpetuity’ kind of investor. It’s probably universally accepted you can make money in stocks from a variety of ways though. Crypto, on the other hand, scares me. But I see it’s the future, and I’m always thirsty for more. Is it a store of value? A commodity? Digital money? All of these?

In an effort to learn more, one of the leaders I look to is Howard Lindzon, specifically, his podcast. In a conversation Yoni Assia, the two laid out some crypto 411 in plain English.

We could boil it down to one word: Liquidity. In the world of money, everything gets debased — a store of value like crypto or bitcoin, while not having a fungible use case like other types of commodities, say lumber, or oil, etc., it can stave off the debasement. Furthermore, let’s say you have a bunch of money just lying around on your couch, or in a jar; it’s not doing you much good. But with crypto, that money is ‘on the table’ — it’s in the digital world where it’s seeable, it’s countable. This is where the next layer of true liquidity comes into play. Because “the money” is all accounted for and can be put to use.