Cryptocurrencies - Invest now?
- Thread starter Smada2001
- Start date
I am just kidding you. I have lost a lot in the last few days as well but think it will come back or not lose too much more. I guess we’ll see won’t we. One thing I do know is that those who have to flash their cash by buying expensive toys, etc., usually don’t have a pot to piss in.
Look, I'm not debating the merits of saving in a 401k, IRA, Roth, etc. along with mutual funds. My wife and I have maxed out our 401ks for years along with company matching, we are doing just fine in that regards. But to ignore a potential investment sector like the crypto market is insane. It's an unregulated market for the most part so doing your own research is important, but to call it all a ponzi scheme is ignorant. There are legit companies and technologies that will disrupt and revolutionize a number of industries. This is an opportunity to be an early investor in some exciting areas. Blockchain is the future for being the backbone of financial transactions (not as a currency but as the infrastructure for all digital transactions) and there are a lot of reasons to be excited.
Likewise, the potential for artificial intelligence to disrupt industries is huge. Basically, if companies aren't investing in it now, they will be left behind. There is one very large insurance company that is going to be in big trouble in the next year or two because they haven't invested the resources. Actually a company to keep on eye on is Lemonade. But just because you don't understand a technology or potential impact doesn't mean it isn't valuable.
Now with that said, Bitcoin is junk right now. It's not a viable currency due to long transaction times, volatility and transaction cost. Unfortunately it's the grandfather of them all, most other cryptos are tied to it still and that's the one everybody knows and wants to get into first. There are also a lot of potential scams out there or really crappy companies that people just throw money into. But there are several strong contenders worth taking a risk on.
Finally, please explain the Ponzi criticism and how that doesn't apply to the stock market in general? Both run off supply and demand, both require new money to come in to continue to drive up price.
Again, at least you are underperforming the market on the downside. Do they market perform on the upside?
My opinion:
I can purchase a share of a company, and that company must produce reports about their profitability on a quarterly basis. As a shareholder, I am then entitled to some portion of that profit in addition to any increase in the value of my share. The value of the share and the dividend, viewed over the long term, are both tied to the efficacy of the business at making money.
The value of any currency, including bitcoin, changes with a host of different factors, but primarily perception of those who would hold it. There is no way to view any long term prospectus for Bitcoin. Anyone purchasing it at a certain price is speculating that it will become more valuable in the future. Bitcoin is one of a few different crypto currencies seeking widespread acceptance. The thought that bitcoin is limited in number is a fallacy, as there are already plans to expand to Bitcoin 2 and all it takes is a different algorithm to create another currency.
One can speculate or invest in individual stocks or the broad market (this the overall health of the economy). I believe currency trading of any kind is exclusively speculative, and anyone saying they’re invested in BTC or any currency “for the long haul” is just fooling themselves into thinking that makes their speculation an “investment”.
I wouldn’t tell anyone what they should or should not do. I’d just encourage them to recognize it for what it is, and act accordingly. Probably my best friend in the world watched the Netflix documentary on BTC and bought in at roughly $8000. He criticized me for being too conservative and not understanding BTC when it was up near $20K. I encouraged him to sell. He didn’t because he believes the projections that it will demonstrate limitless growth as it gains acceptance. I wished him luck, because that’s what he’s banking on in my opinion.
If you exclude the money I have in bonds (~20% of portfolio), it's yes and no. My NASDAQ top 100 fund does better than the entire NASDAQ. My S&P 500 fund pretty well matches that index, as it is designed to do. I have an "extended market index fund" and it doesn't do as well as the S&P 500 but it outperforms most peer funds.
I agree for the most part - however you also have to realize that some of these cryptos aren't currency, they are basically utility tokens that do produce value. For example, one of my current favorites is OmiseGo (OMG) - they are basically building infrastructure for handling millions of transactions per second on their own blockchain. Instead of using proof-of-work (like Bitcoin) to validate transactions, token holders stake their OMG tokens and run a light software package to validate transactions on the network. Tokens are staked to prevent cheating/hacking the system (if you are caught trying to cheat validation, you lose your tokens) but the processing power to validate is fractions less than bitcoin, so you can technically stake using a raspberry pi or AWS. The beauty is then, when you stake your token, you get a percentage of the transaction fees. OMG has a traditional financial company in Thailand and Japan that does billions in transactions - they will be shifting to the blockchain (while retaining ~30% of tokens for their own staking). Depending on partnerships and adoption of their network, transaction fees can be huge for stake holders, which will drive up the price of the OMG token.
Japan has already announced they are developing their own national cryptocurrency (J-Coin), several European countries have announced they are moving to cryptos as well. Think of it what you will but the tech is real. Nobody is forcing you to invest/speculate, but do some research before dismissing it out of hand.
Your post was fine until your last paragraph. I have done research. I am not dismissing it out of hand. I do not intend to speculate on Bitcoin specifically. I agree that blockchain technology is going to be a big deal, and I agree that at some point, cryptocurrency is going to happen. I haven't decided or figured out where/how I want to invest. I am extremely skeptical about Bitcoin in particular for the reasons I've spelled out in this thread numerous times, all of which are founded in my own personal extensive research on what it is, how it works, and how I think it's likely to be accepted (or not). So, please, give your advice to someone else who needs it, because I sure as shit do not. Good luck.
I'd like to mention sector funds. From Investopedia: "A sector fund is a fund that invests solely in businesses that operate in a particular industry or sector of the economy. Sector funds are commonly structured as mutual funds or exchange-traded funds (ETFs)."
I have had sector funds as both mutual funds and ETFs. I was in energy, healthcare, transportation. IMHO, they work great until they don't. Seems like sectors like energy or healthcare or transportation would be solid forever but then comes fracking or Obamacare or 9/11 or Hurricane Katrina, then the bottom falls out.
As far as individual stocks, I put $50K in the mother of all tech stocks: Iridium. The sister of the CEO lived next door when I was stationed at Fort Lee, VA. I was getting "insider" info. Google Iridium, it's the mother of all turkeys.
You need to focus upon the long haul and that means trying to capture the entire market, or at least the best part of it. Index-based mutual funds self-select the top stocks based upon market capitalization. If Acme Widget becomes a top 500 in mkt cap, they join the S&P 500 and #501 drops out.
After doing this for 37+ years, my advise is to do what Warren Buffet advises: Invest regularly in no-load, index-based mutual funds.
I have had sector funds as both mutual funds and ETFs. I was in energy, healthcare, transportation. IMHO, they work great until they don't. Seems like sectors like energy or healthcare or transportation would be solid forever but then comes fracking or Obamacare or 9/11 or Hurricane Katrina, then the bottom falls out.
As far as individual stocks, I put $50K in the mother of all tech stocks: Iridium. The sister of the CEO lived next door when I was stationed at Fort Lee, VA. I was getting "insider" info. Google Iridium, it's the mother of all turkeys.
You need to focus upon the long haul and that means trying to capture the entire market, or at least the best part of it. Index-based mutual funds self-select the top stocks based upon market capitalization. If Acme Widget becomes a top 500 in mkt cap, they join the S&P 500 and #501 drops out.
After doing this for 37+ years, my advise is to do what Warren Buffet advises: Invest regularly in no-load, index-based mutual funds.
Last edited:
And how about hedge funds? Rule of thumb: hedge fund managers do very well and hedge fund investors do not.
https://www.wsj.com/news/types/hedge-funds
https://www.wsj.com/news/types/hedge-funds
Yes, of course. The only people who will be hurt are the ones who get out of the market now.
I'm hoping for a nice, solid two- to three-month bear with a 20-25% total decline now to take the edge off the market, and then a solid rebound over the course of a couple of years to set me up nicely for early retirement.
i had dreams of early retirement. Then i had twins. now i aspire to catch up on my sleep.
Funding those 529s put a dent in my personal savings rate.
I've been in the Grayscale Bitcoin Trust (GBTC) for some time and have nearly doubled my money. Still hanging onto it because I predict it'll go even higher
Bumping to celebrate ETH hitting 2k. And BTC blowing past 50k this week. Congrats to those that remained patient the last 2-3 years. It’ll crash again soon enough for those of you watching from the sidelines waiting to jump in.
Yea it's been crazy.. I rode it from 2017 and it's exciting again. The DeFi craze is partially fueling this run, so we'll see if it's more sustainable than the 2017 Bull. This feels different in terms of utility, institutional investment. Hopefully just the start of this latest run but who knows!
Latest posts
-
-
Example #346 that liberalism is a disease....- Latest: Boiler Buck
-
-
