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After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors

nytimes.com

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Re: After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors

#101

Post by kimsk112 »

systematical wrote: post #79
RivieraKid wrote: post #21

Investors? More like speculators, gamblers... Most people buy crypto because they believe the price will rise and they will be able to sell at profit. Investing is when you buy something that generates profits or utility, for example a share of a company or a house.

Isn't that what my 401k is? Sure I get matching contributions from my employer, but I am hoping it keeps rising and that I can sell later for a profit when I retire. Maybe I'm oversimplifying that, but how is that any different?

Because companies exist to create revenue and grow. Revenue means dividend and R&D investment, hence, people spend more to buy those shares because company values are higher. For Cryptocurrencies, you just expect someone else will pay more than you do, but there is no obvious reason why it should be that way forever.

Re: After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors

#102

Post by rapnie »

evancox100 wrote: post #13

Where do they find these people? Is this what a lot of "ordinary" people do? Take out tens of thousands of dollars in loans to invest in cryptocurrency? Are the people profiled in the article a representative sample? Or are we hearing about the worst cases only because they are so notable and out of the ordinary? Will this post ever stop asking questions?? Stories like these are full of anecdote and short on facts, i…

Probably you hear about them because they are so notable, like the Dutch family that became world news when they went all-in [0], but there will be many who are over-invested.

[0] https://www.cnbc.com/2017/10/17/this-family-bet-it-all-on-bi...

Re: After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors

#103

Post by GreeniFi »

cryptothrow wrote: post #77

I appreciate being the opposite of this story. Bought into an ICO five years ago, forgot about it, remembered early last year, diversified into more tokens but had a feeling to pull out when BTC was $18k. Sold 95% of my entire portfolio.

Just out of curiosity, how does it make you feel knowing your gains were at the expense of not very fortunate or rich people losing out around the world - unprotected because of the newness of the “investment” type - by investment laws. I made a modest return on a bitcoin investment, felt shit about it, and donated all the return to charity.

Re: After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors

#104

Post by ericpauley »

jonas21 wrote: post #88
paulpauper wrote: post #82

Earlier quoted context omitted.

due to the mining aspect of bitcoin, unlike a stock, it does a a sort of floor, but that too can eventually fail

How does mining set a floor?

It doesn't, it's the other way around. Price sets a floor on hash rate.

Re: After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors

#105

Post by JumpCrisscross »

21 wrote: post #50
fru2013 wrote: post #43

Earlier quoted context omitted.

Past performance is not indicative of future results.

Then why do people say "invest in the stock market for the long run by buying an index fund?"

> Then why do people say "invest in the stock market for the long run by buying an index fund?"

Because the American economy has historically grown. Buying an index of Austrian stocks on the eve of WWI would have been about as effective as buying cryptocurrencies.

Re: After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors

#106

Post by [deleted] »

lowdest wrote: post #92
whoisjuan wrote: post #29

Earlier quoted context omitted.

That doesn't even make sense. Anyone that is attempting to invest in crypto is a noob, even the ones that claim to be 'experts'. Nobody had any type of signaling to predict a price deflation for any of the crypto assets. The hard lesson is about timing, not about expertise.

Not 100% true. It's a small market full of inexperienced investors. It's easy enough to play it as such and come out a winner. For example, all the price movements are exaggerated because novice investors lack emotional control -- they get too greedy when the price is going up (magnifying the upward trend) then sell in a panic when the trend starts to reverse. I often make better returns in a sideways crypto market t…

[deleted]

Re: After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors

#107

Post by tim333 »

benashford wrote: post #85
cm2187 wrote: post #19

Earlier quoted context omitted.

I don't think any investor saw this as anything else than a bubble, they just wanted to enjoy the ride up. I would go all-in in a bubble if I had the confidence someone would tap on my shoulder to let me know when it's going to crash. Investing requires discipline.

That isn't what they were saying at the time. Even level-headed forums like Hacker News had a lot of comments (gathering positive votes, although I suspect not all were organic) trying to describe with a wide-array of pseudo-science why Bitcoin was the king of a new world of inherently superior currencies. Of course it was nonsense, as anyone who'd read about previous bubbles could tell you. But it was a mad time las…

I know people who still think there is value there and it will go back up.

Re: After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors

#108

Post by sdf43543t345 »

GreeniFi wrote: post #103
cryptothrow wrote: post #77

I appreciate being the opposite of this story. Bought into an ICO five years ago, forgot about it, remembered early last year, diversified into more tokens but had a feeling to pull out when BTC was $18k. Sold 95% of my entire portfolio.

Just out of curiosity, how does it make you feel knowing your gains were at the expense of not very fortunate or rich people losing out around the world - unprotected because of the newness of the “investment” type - by investment laws. I made a modest return on a bitcoin investment, felt shit about it, and donated all the return to charity.

Nobody had a gun to the buyers/sellers head. Everyone knows what they are getting into, and markets are a zero-sum game. I have no ethical issues with making profit from trading. I'm sorry that you were not able to take the win. Maybe you should not play games?

Re: After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors

#109

Post by teachrdan »

JumpCrisscross wrote: post #99
abakker wrote: post #49

Earlier quoted context omitted.

They do this when their 90k in savings isn't going to cut it in their retirement, or sending their kid to college. Desperation and duress cause people to make poor decisions, in finance, health, jobs, marriage. It is this fact especially where "advice" doesn't really help. I have not seen that coping with need , whether perceived or real is something people tend to do rationally. And, unfortunately, once you are in t…

> 90k in savings isn't going to cut it in their retirement $90k at 45 years old isn't great, but it isn't destitution.

I think the point is that it wasn't enough. In which case it makes sense to gamble, especially if the odds seem to be in your favor.

Re: After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors

#110

Post by tedunangst »

jonas21 wrote: post #90
Retric wrote: post #65

Earlier quoted context omitted.

Because of minimizing risk, and minimizing transaction fees. If you buy 100 stocks and 10 of them go to 0 you are out 10%. However, if the other 90 stocks are up more than 15% then you have gained a little money. But, if you buy 100 different stocks by hand then you pay 100 different transaction fees and have to keep track of them independently for tax etc.

I'm pretty sure you still need to pay taxes on the dividends even if you're reinvesting them.

If it's an IRA, there's no tax unless withdrawing.
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