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S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

reuters.com

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Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#231

Post by puranjay »

miguelmota wrote: post #186
puranjay wrote: post #150

I've been dabbling in crypto since the lockdown (all red, but I've had fun) and this space is like the wild west early days of the internet, with even more scammers. We're past the heady ICO days but now, all the scams have moved to Uniswap. And I might be guilty of being elitist, but I rarely, if ever, see founders with A+ tier credentials (Ivy league education, FAANG/Investment banking/Mckinsey et al) starting cryp…

What exactly are you seeing on Uniswap that’s a scam? Why do you think people need credentials to create a startup if they have a good idea?

> Why do you think people need credentials to create a startup if they have a good idea?

They don't. But good credentials are a signal in a crowded field where most projects are just whitepapers.

They might not matter in the startup world where you usually launch with at least an MVP. But in the crypto world, most new coins are just whitepapers. You at least need to know that the founders have the technical knowhow to bring the whitepaper to life.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#232

Post by pashamur »

misnamed wrote: post #139
fractionalhare wrote: post #68

Earlier quoted context omitted.

Gold is a good portfolio asset for reducing overall risk in a long term investment strategy. You can beat the market over time with less risk by holding the S&P 500 and gold and weighting each according to respective volatility. This also has a lower beta exposure than just holding stocks. Gold (and commodities more generally) have fundamentals - just different ones from equities. You can't take advantage of the univ…

We have fairly little data on gold as a freely available modern asset class (around 50 years), but yes, in small amounts it can limit volatility and potentially even increase returns (or at least: risk-adjusted returns). That said, over the long haul, independently, it has tended to roughly track inflation. I'm not against it, just see it as something of limited utility to an ordinary investor.

Technically, everyone in the U.S. was an investor in gold up until 1971 since USD was supposedly backed 1-1 by gold :)

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#233

Post by puranjay »

vmception wrote: post #228
puranjay wrote: post #168

Earlier quoted context omitted.

I agree. But it is a signal, especially in a field filled with as much noise as crypto. When all you have to go by is a whitepaper and a website, past performance of the founders becomes important.

Its not a signal at all. Thats the entire rebuttal. Your premise is flawed.

How else do you figure out whether the devs can actually do what the whitepaper promises? Just go by their word?

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#234

Post by diab0lic »

didibus wrote: post #94
iamspoilt wrote: post #30

Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…

When you buy into a Crypto you're investing into the technology itself. If you believe that more and more payments will be handled through it, its value will go up, thus making it a good investment. If you take Bitcoin, there's a small pool of total Bitcoin and that's guaranteed by the technology. Each new coin costs real money to mine, due to needing physical compute resource to do so, and it gets harder and harder…

> When you buy into a Crypto you're investing into the technology itself.

This argument of technology + limited supply is fallacious. If the technology is so useful the coin can just be cloned with more supply. The technology itself doesn't force me to participate in a limited supply market in order to get the benefits.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#235

Post by Spivak »

elevenoh wrote: post #70
iamspoilt wrote: post #30

Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…

ETH for instance is used for fees in the decentralized economy (e.g. p2p lending/borrowing/investing/marketplaces). If demand for fees in the ethereum economy outpaces supply, the price is likely to rise. https://cryptofees.info/ Aside: If I issue equity in my company, I'd do it directly on a decentralized network like Ethereum > IPO. I'd prefer to not have an underwriter like goldman sachs take 3%+ & manipulate reta…

I think your phrasing of "demand for fees" is kinda weird. Since it really comes down to "demand for validators" or "demand for compute resources on the ETH network."

ETH's fundamental value is that it's the only form of payment accepted to use the eth network. It can and does have secondary value as a medium of exchange but that's what's at the bottom and the reason you need ETH opposed to something else.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#236

Post by JxLS-cpgbe0 »

joosters wrote: post #151
clarky07 wrote: post #146

Earlier quoted context omitted.

so why does it still take me 3+ business days to move money between banks? I assume it's just because they use that float to make money, but it still sucks. i for one like transactions clearing in a few seconds rather than a few days.

It's because you don't live in the EU. Millions of people have had instant money transfers for years now.

Some wire transfers are instant and they are much more expensive than BTC or ETH

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#237

Post by hddherman »

cwkoss wrote: post #219
itodd wrote: post #183

How can this be with Tether existing? Does anyone really honestly think that USDT is legit?

Tether would be silly to include in the index, but not sure how its existence affects crypto indices otherwise.

There have been theories and allegations that Tether is being used to prop up the price of various cryptocurrencies. When I last kept an eye on the wild world of cryptocurrencies, Tether was at around 4 billion USD in total, and now it has grown to 19 billion, while at the same time Bitcoin is at an all time high.

As long as Tether continues to exist, any cryptocurrency USD prices should be taken with a spoonful of salt.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#238

Post by UShouldBWorking »

iamspoilt wrote: post #30

Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…

Here comes the hn, "durrr, I don't get it, it must be fake. There's no real value..."

How is it that a group of people that purportedly understand so much about programming and systems are so incredibly obtuse about a programming system?

Bitcoin has value because there is an unlimited supply and it is a useful tool for moving and storing value, how hard is this to understand?

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#239

Post by dcolkitt »

iamspoilt wrote: post #30

Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…

I consider it a deep out of the money call option. There's a small but real chance that Bitcoin (or another crypto) essentially replaces the US dollar as the world's reserves currency.

Bitcoin's total capitalization today is $200 billion. The total value of the dollar is harder to measure and depends on what you count as money or just money-like. But M3 is $20 trillion, and add in short-term T-bills and money markets and it's substantially higher. So in this scenario, it's possible for BTC to rise from $20,000 to $1,000,000+ or higher.

Given that, I think it's prudent to allocate 1-2% of your overall net worth to crypto exposure. Especially because we expect it to out-perform in high-inflation/low-growth environments, which is the worst environment for traditional 60/40 portfolios.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#240

Post by root_axis »

nofunphil wrote: post #229
iamspoilt wrote: post #30

Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…

Buying Bitcoin is becoming similar to buying gold. It’s a Store of Value. Why is gold an investment? Because it’s scarce and we have, as a society, decided it’s an investment. There may be nuances here, but that’s the basic idea. Bitcoin is digital gold. Most other tokens are similar buying fiat currencies which can help if you local fiat currency is hyper-inflating. But then some tokens give access to de-fi which a…

Cryptocurrency isn't actually scarce though, it may be "scarce-like" but the scarcity is an artificial property that can be arbitrarily changed, unlike gold's scarcity which is an unalterable property of reality.
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