If you're a professional money manager who isn't already using bitcoin as your hurdle rate, now would be a good time to sit down and try to understand why it should be.
Discussion
Somewhat related: is there a source where plebs can find the 4-year sharpe ratio of bitcoin? Willy Woo had a chart with this information but it has stopped updating in 2022.
This. 🔥
The energy angle is interesting here as well. Massive infrastructure is being built out that may become idle with efficiency gains in AI. What can you do profitably with idle power generation capacity?
I haven't used the term hurdle rate, but my number one question to people about "diversification" is what basket of assets can beat #bitcoin's cagr?
The first thing they struggle with is the idea that something can grow 20% annually indefinately. That's mindbending for just about everyone.
Then they struggle with not spreading out risk.
I'd never heard of hurdle rate either but from, DuckDuckGo AI:
"A hurdle rate, in financial terms, refers to the minimum rate of return required by an investment project or a business decision to be considered worthwhile. It is often used in capital budgeting to determine whether an investment should be pursued or not. The hurdle rate takes into account the risk of the investment, the cost of capital, and the expected rate of return. If the projected return on an investment is lower than the hurdle rate, it may be rejected in favor of other opportunities with higher potential returns."
it seems like bitcoin is the new 'risk free rate' - tough to beat. 'diversification' into USD treasuries? no thanks
if bitcoin is the 'risk free rate of return', which i think it is, the hurdle rate for everything else is quite high