IMHO there's only one thing that makes Bitcoin valuable and that's human emotion. And people LOVE Bitcoin, forever.
They love it until they loose. It's same with the casino.
Will Bitcoin Make a Good Investment?
51–60 of 137 posts
Re: Will Bitcoin Make a Good Investment?
#52Bitcoin is not an investment. It has no underlying rate of return. When you invest in stocks you get dividends. When you invest in bonds you collect coupons. When you invest in real estate you collect rent. Bitcoin is speculation. You are just hoping somebody comes.along and pays more for it than you did. In that sense it's more like gold and silver.
I beg to differ.
Alice wants to send $1 to Bob via Bitcoin.
Alice needs some Bitcoin to do so.
Hoddler sells some Bitcoin to Alice for $1.01
Alice sends that to Bob.
Now Bob wants to change it to $.
Hoddler buys back for $1
Hoddler has a return on his investment.
Re: Will Bitcoin Make a Good Investment?
#53Except for a small window around the peak in December 2017, if anyone bought bitcoin anytime during its existence, they would be profitable now.
> Except for a small window around the peak Most people bought during the peak, that's why it was a peak. As any other pyramidal Scheme the only way to win is to be there first. Later on you are just trying to put other people into the scheme to regain some losses.
> Most people bought during the peak, that's why it was a peak.
There is no cure for jumping in with your emotions and money into markets.
How is it any different from buying stocks at its peak? If you bought SPY during 2008 peak bubble, you had to wait for 6-7 years to even break even!
Re: Will Bitcoin Make a Good Investment?
#54Bitcoin is not an investment. It has no underlying rate of return. When you invest in stocks you get dividends. When you invest in bonds you collect coupons. When you invest in real estate you collect rent. Bitcoin is speculation. You are just hoping somebody comes.along and pays more for it than you did. In that sense it's more like gold and silver.
This strikes me as a somewhat semantic argument. Many stocks don't pay dividends. Flipping houses would also fall outside of your definition of investing. Buying gold has also been a relatively safe "investment" strategy as well, speculation or not. Every form of investment is, at its core, speculation on some level. If i pour my savings into Apple and they tank, the dividends would pale in comparison to my losses.
Every asset that produces an Income or has a possibility of producing income in the future is an investment. Everything else is speculation.
Buying a commercial property and renting it out is an investment. Buying a house in the hope of selling it for more in the future is not investment.
Same goes for Gold, Bitcoin, momentum trading in stocks in not investment. Buying a stock that does not pay dividend but is a real business that produces something is an investment.
Re: Will Bitcoin Make a Good Investment?
#55Short answer: hell no. What gives currency value is how often people use said currency to purchase goods, nobody uses Bitcoin, not to the extent of any real currencies anyways.
By that logic, gold should be worthless. It isn't. Bitcoin will probably never be a currency equivalent to fiat, but it surely is a store of value in the long term.
Gold is almost worthless but people just don't want to accept that because governments still use it as a form of currency.
Credit rating agencies are using gold reserves(among other things) so this could be a reason
Re: Will Bitcoin Make a Good Investment?
#56Re: Will Bitcoin Make a Good Investment?
#57Earlier quoted context omitted.
What exactly does it mean when people say that a currency is backed by a government? ”Backed” to me implies, e.g., redeemable for gold which is clearly not the case for the US dollar. Is it that the government issue bonds denominated in that currency? But that has nothing to do with the money supply per se...? Please explain.
The US government accepts payment for taxes in USD. Even if an American wants nothing to do with USD, and conducts all their exchanges through bartering, they will need to acquire some at some point in order to make tax payments. The value of USD can't fall to 0 as long as the federal government retains the ability to impose taxes.
So do cryptocurrencies acquire their value through market demand. For example, XRP is the cheapest and fastest way of sending money between the EU and China. Standard wire payment would not arrive before Monday the earliest, but XRP is there in seconds for a fraction of a cent.
In military, even a pack of cigarettes functions well as a currency. It does not need to be government-backed. It needs some kind of useful property to ensure demand.
Re: Will Bitcoin Make a Good Investment?
#58Bitcoin is not an investment. It has no underlying rate of return. When you invest in stocks you get dividends. When you invest in bonds you collect coupons. When you invest in real estate you collect rent. Bitcoin is speculation. You are just hoping somebody comes.along and pays more for it than you did. In that sense it's more like gold and silver.
Exactly. I tend to phrase this as “BTC has no fundamentals.” Stocks go up because profits go up along with GDP (this is the reason non-dividend paying stocks are also investments). None of this applies to BTC.
Re: Will Bitcoin Make a Good Investment?
#59Bitcoin is not an investment. It has no underlying rate of return. When you invest in stocks you get dividends. When you invest in bonds you collect coupons. When you invest in real estate you collect rent. Bitcoin is speculation. You are just hoping somebody comes.along and pays more for it than you did. In that sense it's more like gold and silver.
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Re: Will Bitcoin Make a Good Investment?
#60Any article which talks about Bitcoin as an investment without mentioning (at least in passing) the currently unregulated exchanges and the role of Tether in the price, is missing a large part of the picture.
The current set of exchanges which are setting the price are totally unregulated banks (effectively) and with Tether (a "stablecoin" that isn't 1:1 backed and which has been rapidly inflating it's supply) there are significant concerns about how much of the price is really reflective of demand.