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(Pure speculation warning) I was wondering why they were taking so long to put out their options trading and web UI. I wonder if this had something to do with it.
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I can hold a lottery ticket.
yes but it's a bad analogy because the odds are known and if you don't win the lotto the ticket is worth nothing. all bitcoins are equally valuable ( fungibility ).
I can imagine a lottery where usually nobody wins anything but every now and then everyone who bought a ticket wins collectively. It's still a lottery.
I'm disappointed in Robinhood. They've done great work making equity investment approachable to people who are traditionally alienated by it. Their mission, "[...] to democratize the American financial system." caries fantastic social value and generates a lot of good will for them. Entering cryptocurrencies IMO runs counter to that mission. It's a cash grab which will expose their users to poorly-understood risks an…
> It's a cash grab which will expose their users to poorly-understood risks and will likely not put anyone on a more stable financial footing. That's already the case. Their entire user-base is comprised of naive stock market investors. If they really wanted to bring about a more stable financial footing for their users they would just offer dressed-up ETFs.
My assumption here is that by "no-commissions" they mean that they're only making the bid/ask spread on transactions as a market maker?
I don't think they are making the market themselves, but my understanding is they are paid for order flow from those who do. I can only imagine the data is worth quite a bit too, assuming their EULA allows them to sell it.
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I put money down on a blackjack table, play a hand, win, and cash out with more money than I put in. How is that not an investment?
A better question might be: How is anything an investment? If the stock market is priced efficiently, it is as much a gamble as Bitcoin. The stock market is of course not perfectly efficient, but it is likely extremely efficient relative to the knowledge of your average retail investor. Which means that buying Bitcoin or other cryptos is no more a gamble than any stock market investment with a similar volatility.
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I buy bitcoin, it changes in value, I cash out, I now have a different amount of money than I put in. How is that not an investment?
I put money down on a blackjack table, play a hand, win, and cash out with more money than I put in. How is that not an investment?
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What separates investing from gambling is the expected return for everyone is greater than zero. AKA buy stock at 100$ and sell it at 100$ does not mean you broke even. You could have gotten 10$ in dividends. Now that positive may be small and some people may lose money, but that's allowed as long as the expected returns end up positive. Bitcoin's can't have a net positive return because they only way to add money in…
What about stocks with no dividends (which constitutes the vast majority)? By your definition, only dividend investing and rental property investing is true investing. I'm not disagreeing with you. In fact I almost agree with you, but your argument fails for most stocks.
Related, kinda: Robinhood seems to be pulling in a lot of different directions and there's all these "early access" features that never seem to actually, well, launch. I've now signed up for: * Web access (otherwise it's mobile-only) * Options trading * And now, cryptocurrency trading (because why not) and I haven't gotten access to any of them yet, even though Robinhood for web has been in "early access" for quite a…
I'm really confused about why web access hasn't launched yet? Would think that is the easiest of them all and entirely in their own fate. Options and crypto seem like much more complicated endeavors but a website, ffs.
A company I left a few years ago went down the same path.
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A better question might be: How is anything an investment? If the stock market is priced efficiently, it is as much a gamble as Bitcoin. The stock market is of course not perfectly efficient, but it is likely extremely efficient relative to the knowledge of your average retail investor. Which means that buying Bitcoin or other cryptos is no more a gamble than any stock market investment with a similar volatility.
The difference is that with investing, you have a reasonable indication where your investment will end up in the future. Chances are, in 10 years Walmart is still going to be profitable and continue to pay out dividends. There's no telling what will happen to Bitcoin in the next week, let alone the next year, so it's a gamble to put your money in Bitcoin.
"Chances are" alone, is an assumption. How is that any different from your speculation on Bitcoin. The only difference is longevity of the window period, otherwise it's the same principle.