Why Passive Investors Lose | Contrarian Investor Michael Green

In this episode of Bankless, host Ryan Sean Adams interviews Michael Green, Chief Strategist at Simplify Asset Management, about the problems with passive investing. Green argues that passive investing, particularly through index funds, has created market distortions, overweights large-cap companies, and is vulnerable to significant downturns. He suggests that government policies have inadvertently encouraged this trend, leading to a less dynamic and innovative economy. Green recommends considering long-duration bonds and Treasury Inflation-Protected Securities (TIPS) to counteract these distortions. While critical of Bitcoin as a monetary system, Green is optimistic about the potential of tokenization and smart contracts to rebuild and enhance the financial system, despite regulatory challenges. He advises passive investors to recognize the systemic issues and consider alternative asset allocations, while urging crypto investors to balance their portfolios with assets that perform well in deflationary environments.