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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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Do you not see how you are contradicting yourself? "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.
There is always going to be some degree of uncertainty with any action. Just because a meteor can fall on your head if you walk outside doesn't make it a gamble to do so. There's a fine line between investing and gambling, but the extreme ends of the spectrum should be obvious.
This is it. Margin trading on Bitcoin for unsophisticated retail investors. Here we go...
Something about Robinhood just makes me uneasy - clearly their main target market is the small retail investor who is sensitive to a $7/trade fee, but the low friction, mobile-first no fee stock trading experience they've created mostly serves to encourage bad investor behavior i.e. emotional, irrational day trading among people who can least afford it. Now they are "democratizing" margin trading (Robinhood Gold), op…
I think Robinhood's purpose is exactly to promote "emotional, irrational day trading." Isn't that part of what impacts the market anyway? There are tons of bad traders in any given platform, and you're right that Robinhood increases that likelihood but you can't exactly blame an app for poor trading motivations. That's a due diligence.
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A better question might be: How is anything an investment? If the stock market is priced efficiently, it is as much a gamble as Bitcoin. The stock market is of course not perfectly efficient, but it is likely extremely efficient relative to the knowledge of your average retail investor. Which means that buying Bitcoin or other cryptos is no more a gamble than any stock market investment with a similar volatility.
If the market is priced perfectly efficiently you will still make money because your capital is put to work. A perfectly efficient market just means you can't beat that intrinsic rate of return.
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A better question might be: How is anything an investment? If the stock market is priced efficiently, it is as much a gamble as Bitcoin. The stock market is of course not perfectly efficient, but it is likely extremely efficient relative to the knowledge of your average retail investor. Which means that buying Bitcoin or other cryptos is no more a gamble than any stock market investment with a similar volatility.
What separates investing from gambling is the expected return for everyone is greater than zero. AKA buy stock at 100$ 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…
gambol: A playful skipping or frolicking about.
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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.
I also think the stock market is not "investing" but think it's safer to invest. 1. There's more government regulation and less manipulation. 2. New money is constantly flowing in, via 401K's and pensions. Most people aren't even aware they're invested in the stock market. 3. The government cares so much about the stock market doing good. Look at how Trump brags about the booming market. If it goes in a funk, the gov…
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Bitcoin is backed by an asset with a tangible value that may or may not increase over time. What exactly is Blackjack backed by?
Bitcoin isn't backed by an asset. It's not really backed by anything other than people's expectation that it is worth something now (and it will be worth more in the future). This is true even for the miners, since they would not build out infrastructure and burn energy if bitcoin was worth zero.
It's backed by hash rate, which secures the blockchain.
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Providing capital to someone only occurs in the IPO stage. The stock market is a secondary market with people trading stocks, not providing capital.
Several different points and comparisons here. Providing capital to someone does not only occur in the IPO stage. I'm not even sure how to go about refuting that statement; that's... not how finance works anywhere on the planet. People do trade stocks with the expectation of stocks rising or falling in varying periods. People also hold stocks for long terms and then sell them afterwards. Just like cryptocurrencies! H…
"Providing capital to someone does not only occur in the IPO stage. I'm not even sure how to go about refuting that statement; that's... not how finance works anywhere on the planet."
First, I provided that statement in the context of the parent comment. In the equities market, providing capital occurs only in IPOs, not in the secondary market. When you buy Apple stock, you typically are exchanging money with another person who is selling it. You are not providing capital to Apple.
Second, you could've gone about refuting my statement by providing a counter-example. It's that easy. Otherwise you're simply just trying to put me down, and make me look like an idiot, without explaining why.