crypto interest

[Craig]

comparing index funds with cryto is like comparing Stockport with City.

Crypto could drop 90% today, and still be miles in front of index funds over the last 5 years.

God knows what the comparision will be like in 5 years time

Haha spot on

 

[bugsyblue]

No, I'm not a fan and my reasoning is that crypto is completely speculative. You're investing in the hope that someone else will be willing to invest more than you for the same thing in the future. At best crypto is a commodity like gold, watches, wine, tulips etc. When you're gambling, there's always going to be winners (and losers). You only ever hear about the 0.000001% who made £10m overnight and not the 99% who have made losses or very modest gains.

I do perfectly well investing in index funds. These are real businesses with the smartest minds in the world working towards increasing value or paying dividends. It's very easy to do, it's tax efficient and its much lower risk (although there's always going to be risk involved with investing).

The mistake you're making is lumping crypto into one basket and analysing it as a whole. To use your own example of index funds and businesses, you wouldn't compare Tesla with Crusty's bouncy castle company... Point being there's various progressive, cutting-edge companies out there and there's various duds too. Just like in crypto.

And by the way some of the smartest minds on this planet work in crypto. Only something like 1000 people know how to programme and build it. Crypto is largely open source which by definition means you need to continually improve on it otherwise it will absolutely die because any tom dick and harry can copy it (of course they need to know how to and that alone requires advanced understanding). Imagine this, if Steve Jobs and Bill Gates started their respective companies what would have happened if they'd made it open source? They firstly wouldn't be as rich and secondly the technology would have accelerated much quicker than it ever did because someone else could have come along, learned their code but have spotted a way to improve it and then launched their own computer. That would have benefitted the marketplace and consumer but not the individual companies. Those launching crypto (with exception of the joke ones) have to stay at the very top of the game otherwise they die. Therefore, for investors it's absolutely a gift and curse because unless you know your shit and follow the market (and by that I mean the technological leaps various companies are making) you can easily lose out. That's why, along with it being unregulated, it's so volatile.

 

[bugsyblue]

The mistake you're making is lumping crypto into one basket and analysing it as a whole. To use your own example of index funds and businesses, you wouldn't compare Tesla with Crusty's bouncy castle company... Point being there's various progressive, cutting-edge companies out there and there's various duds too. Just like in crypto.

And by the way some of the smartest minds on this planet work in crypto. Only something like 1000 people know how to programme and build it. Crypto is largely open source which by definition means you need to continually improve on it otherwise it will absolutely die because any tom dick and harry can copy it (of course they need to know how to and that alone requires advanced understanding). Imagine this, if Steve Jobs and Bill Gates started their respective companies what would have happened if they'd made it open source? They firstly wouldn't be as rich and secondly the technology would have accelerated much quicker than it ever did because someone else could have come along, learned their code but have spotted a way to improve it and then launched their own computer. That would have benefitted the marketplace and consumer but not the individual companies. Those launching crypto (with exception of the joke ones) have to stay at the very top of the game otherwise they die. Therefore, for investors it's absolutely a gift and curse because unless you know your shit and follow the market (and by that I mean the technological leaps various companies are making) you can easily lose out. That's why, along with it being unregulated, it's so volatile.

Also I would add the caveat that the market doesn't swing based purely on technological advances. Nowadays Bitcoin is very limited technologically but it benefits from being the first of its kind. Equally the market swings because of various: manipulation, speculation etc. So yes, purely from an investing standpoint it's a volatile and potentially dangerous flurry.

 

[Wafty Cranker]

People got wealthy eh? And in what currency did they measure that wealth? That’s right, them old fiat dinosaur currencies.

Your whole post sums up what crypto is. It’s a highly volatile (and becoming a highly leveraged) asset. 99% of people don’t give two fucks about the “back story” they just care about being able to make cash - you included if you read your post. That’s fine with me but just call it for what it is. Then there are the TAs who crack me up, spouting about retracement lines and the such like there are logical conclusions you can draw about value.

Will crypto disappear? Not any time soon if at all. Money laundering is a massive problem. Is it overpriced? Fuck yeah, it has zero intrinsic value, it’s a money store that’s all. Would I have brought some 5 years ago if I could see the value today - fuck yeah.

Remember this, for every winner their is a loser or losers. So for every story you read about people making fortunes one or more people have had to pay for that. Everyone thinks they’ll be that winner.

It makes sense to express gains in fiat. Beyond expressing it in numerical gains vs the initial gain, for example percentage, how else would you measure it? If you bought 5 Bitcoin years ago and held it, you still only have 5 Bitcoin. You need something to measure the performance in, the same way you would if you held gold, oil or shares.

TA’s works, if nothing else, enough people use it that it is a self fulfilling prophecy which influences demand which in turn is reflected in the price.

It seems you acknowledge crypto has value to arrive at your conclusion it’s overpriced. What are you basing it being overpriced on? Is there are price for instance Bitcoin gets to where you think it’s good value aunderpriced?

It’s also estimated the proportion of funds laundered via crypto is now at least half that laundered via fiat.

There is going to be someone else on the other side of the trade but if it’s going up in value you’re going to get way more “winners” than “losers”, the same you would in say Apple shares.

It is risky and I get not everyone either understands it, and/or has the risk appetite, but you said yourself you’d have bought some 5 years ago if you could see the value today. I feel in another 5 years you’ll be saying the same thing.

 

[Manchester33]

comparing index funds with cryto is like comparing Stockport with City.

Crypto could drop 90% today, and still be miles in front of index funds over the last 5 years.

God knows what the comparision will be like in 5 years time

Utter nonsense and also demonstrably false.

Bitcoin (the largest Crypto coin on the market) vs the S&P 500 over the past 5 years....

Look at the price charts and say that again.

 

[zerox]

bitcoin 5 years ago sept 2016= 600 dollars

s&p 5 years ago sept 2016= 2160

today bitcoin 50000 --------UP 83 TIMES
today s&p 4520------ up 2 times


Which of us talking utter nonsence?

 

[metalblue]

not in crypto there isn't.
Next week El Salvador are making bitcoin legal tender, and giving their population of 6.5m a small amount of bitcoin to start their wallets off. El Salvador is a country where a lot of citizens recieve money from relatives working abroad.

They have been living wsith up to 20% charges from firms such as Western Union and the big banks, stimated at 350 million per year in total.

With bitcoin the cost for each remittance goes to less than a penny.
Plenty of crypto winners there.

I’m not sure how serious your post is.

You’re conflating me holding GBP versus me trading cable or some other GBP cross. The two are completely different as you ought to well know.

Regarding El Salvador, it’s a bit of a gimmick… only those that have the ability to accept it are obligated to. You won’t walk into a shop and them show you a cup of coffee priced at 0.00001BTC unless they have digital menus linked to the current spot price and algorithms to support it, you know like all coffee shops do. What you’ll find is the odd bureau de change showing we buy/we sell rates, what’s daily vol on BTC? 4%…I’d be quoting you a minimum of $4000 spread BTC/USD guaranteed for the day to allow you to convert it - and that’s a very competitive price - on the street you’ll see it wider me thinks. Any business accepting BTC will have to reprice daily. In any case will the banks in El Salvador actually let you hold BTC nominated accounts? My guess is not so you transfer your BTC worth $1000 to your Aunt in El Salvador… she’ll get $600-800 at best. What was that about it being win win?

I’m sure the El Salvador coke producers are delighted though. They won’t care about taking a 20-30% haircut to launder their ill gotten gains - that’s cheap in the traditional scheme of things. No losers in drugs either eh?

 

[metalblue]

comparing index funds with cryto is like comparing Stockport with City.

Crypto could drop 90% today, and still be miles in front of index funds over the last 5 years.

God knows what the comparision will be like in 5 years time

Depends where your brought crypto. Do you actually know what you’re doing?

 

[zerox]

some more 5 year returns

etherium $13 to 3750 ----UP 288 TIMES
xrp <0.01 to 1.27----- 16,160 times

@Manchester33 still think 2 times on a index fund is ok?

 

[zerox]

Depends where your brought crypto. Do you actually know what you’re doing?

I bought mine down Tesco, where did you buy yours?

 

[everythingchangesbutblue]

I think some people just like saying "crypto"

 

[zerox]

as for your elsavador post, well im an flabbergasted.

Y ou are posting of a subject that you know nothing about.

The Elsalvador government have passed the technical application of the experiment over to square., you know the 120 billion upstart challenger to traditional banks.

Square who have created the biggest ligtning network there is to facillate the transactions, and keep them off the bitcoin blockchain.

I am sure they have all your concerns in hand.

 

[Manchester33]

bitcoin 5 years ago sept 2016= 600 dollars

s&p 5 years ago sept 2016= 2160

today bitcoin 50000 --------UP 83 TIMES
today s&p 4520------ up 2 times


Which of us talking utter nonsence?

The part where you said 'Crypto could drop 90% today, and still be miles in front of index funds over the last 5 years.'

I'm just quoting what you said.

 

[Manchester33]

some more 5 year returns

etherium $13 to 3750 ----UP 288 TIMES
xrp <0.01 to 1.27----- 16,160 times

@Manchester33 still think 2 times on a index fund is ok?

Ethereum lost half it's value in 12 days last year. It's too volatile for any serious invester.

Do you honestly expect similar gains in the next 5 years? Remember that around 1/5th of Crypto Currencies have become 'dead coins' and now cease to exist. Link here

I genuinely hope you and any other City fan on this forum does really well out of crypto. But you can't change the fact that it's essentially just gambling.

 

[zerox]

fair play to you, if thats your view.

Just think you are doing yourself a disservice accepting meagre returns from outdated financial instruments.

 

[Craig]

The part where you said 'Crypto could drop 90% today, and still be miles in front of index funds over the last 5 years.'

I'm just quoting what you said.

So because your argument looks pretty pathetic in general you find one exaggeration in an otherwise spot on post.

On the bright side I suppose you still do better with index than a bank.

 

[metalblue]

It makes sense to express gains in fiat. Beyond expressing it in numerical gains vs the initial gain, for example percentage, how else would you measure it? If you bought 5 Bitcoin years ago and held it, you still only have 5 Bitcoin. You need something to measure the performance in, the same way you would if you held gold, oil or shares.

TA’s works, if nothing else, enough people use it that it is a self fulfilling prophecy which influences demand which in turn is reflected in the price.

It seems you acknowledge crypto has value to arrive at your conclusion it’s overpriced. What are you basing it being overpriced on? Is there are price for instance Bitcoin gets to where you think it’s good value aunderpriced?

It’s also estimated the proportion of funds laundered via crypto is now at least half that laundered via fiat.

There is going to be someone else on the other side of the trade but if it’s going up in value you’re going to get way more “winners” than “losers”, the same you would in say Apple shares.

It is risky and I get not everyone either understands it, and/or has the risk appetite, but you said yourself you’d have bought some 5 years ago if you could see the value today. I feel in another 5 years you’ll be saying the same thing.

Why does it make sense to measure your p&l in the fiat currencies? Unless you see crypto as just another currency I suppose…but then it’s whole raison d’être is to be the only currency.

I spent some time as a TA, I get the self fulfilling prophecy narrative, it’s as old as the “art” of being a TA. When you look at a price chart do you actually know what you are really looking at? It took me a few years to figure this out, I was too busy thinking I could read markets by drawing a few lines here and there!! Haha

Value is an interesting question, you got me thinking about this for the first time. So let me give you my two pennies worth. I see the value of crypto as a concept not so much the execution, the idea of money without borders is fantastic. The problem as I see it is the cost of production, what people would call the gate price. It is expensive to produce a bit coin that they need a high value to make them worth producing (around $10k each but I think the average is nearer $20k). If Bitcoin dropped below $10k for a sustained period they would stop being “mined”, below $20k you’d probably see less “miners” making the average of the remaining “miners” closer to $10k. But that’s not the value of Bitcoin, it doesn’t have a value beyond the problem it solves (cost of transferring and exchanging money) however I see a massive disconnect between this value and the cost to produce. So then a fraction of a coin becomes the value store, in that case you have to go to the smaller denomination of both BTC and say USD, so that gets me to 0.000001BTC being worth 0.01USD or 1BTC = 1 million cents or $10,000, maybe add another what $200? for the costs of transferring money across borders. It’s got some very symmetrical structural problems really hasn’t it? So I’ll be a bit generous and say anything above $11-12k is overvalued to me. However you still have to solve the problem of volatility before bitcoin can realise it’s potential.

Trading is a zero sum game mate. Money doesn’t just magically appear. For every $1 you make one or more people have to provide that $1 to the market. The only people that always win are the trading platforms because they take commission on both sides. The number of people who win or lose won’t be balanced, just the value, but that’s largely irrelevant if you’re on the wrong side of a trade.

If you’re making good money in this stuff then I’m pleased for you. Keep an eye on your profits, always ask yourself would I buy it here if I wasn’t already long - and if the answer is no, sell and buy back when you say yes. May the trading gods be on your side

 

[zerox]

your general outline is pretty good, but you must realise that the difficulty of mining is built into the bitcoin protocol, and self adjusts to take account of the points you raise, whatever the price.

The cost of producing bitcoin is directly related to the cost of the electricity consumed, hence multi billion pound companys are always looking for cheap electricity, and more recently renewable energy(i.e hydro, and gas fron oil rigs), causing them to move operations from one country to another.

 

[grunge]

General Crypto question. got an invite to Pi Network, anyone heard of it and had a try? seems shadey as hell to me when I took a look, basically a crypto forcet where doing a simple action gets you "pi". the simple action is open app and click a button every 24 hours.

app shows adverts and seems to access every bit of data the phone has on you which makes me think this is just Cambridge analytica 2.0.

 

[Wafty Cranker]

Ethereum lost half it's value in 12 days last year. It's too volatile for any serious invester.

Do you honestly expect similar gains in the next 5 years? Remember that around 1/5th of Crypto Currencies have become 'dead coins' and now cease to exist. Link here

I genuinely hope you and any other City fan on this forum does really well out of crypto. But you can't change the fact that it's essentially just gambling.

I don’t expect similar gains but I think there is a very strong chance ETH & BTC continue to outperform the markets for next few years.

I agree there is an element of gambling, but it could be compared to going into a casino and putting your money on black, if it doesn’t come in you lose, but if it does come in you 10x you stake.
Obviously it’s not that straight forward but hopefully you get my point in the risk & upside vs downside.

By some distance my best investments have been in cryptocurrency. For the reasons you mentioned though only a small allocation of my capital is in it. It’s not much fun watching its value free fall before your eyes.