S&P Dow Jones Indices to launch cryptocurrency indexes in 2021 • Hacker News Board

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

#111

Post by x87678r » Thu, Dec 03, 2020, 5:27 PM UTC

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 dont understand it either. To me yes BTC supply is limited, but there are lots of cryptos so BTC is nothing special. The secret could be if lots of important and smart people are invested in BTC you have to trust that it will keep being special, and better than other cryptos. It sounds sketchy to me, but the network effect is real so there might be something in it.

It seems lots of well known financial people are getting on board right now. It seems like a ponzi to me but those people aren't dumb.

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

#112

Post by lotsofpulp » Thu, Dec 03, 2020, 5:27 PM UTC

Der_Einzige wrote: post #98

baron_harkonnen wrote: post #43

Earlier quoted context omitted.

I recommend you read some of Stephen Deihl's thoughts on the subject[0]. You're not alone if you feel that cryptocurrency doesn't make sense as an investment vehicle, but the HN community will make you feel crazy for not seeing what a great thinking this is an incredible new opportunity and "things are different this time!" There is no better indication of a bubble then people telling you that you're the crazy one fo…

You are crazy for not buying a house in 2007. I can't think of a better investment to have right now than a house purchased in 2007...

The price of the house structure itself decreases with time. The price of the land the house sits on might increase, depending on where it is.

Land prices in very, very few areas have increased sufficiently to match a risk adjusted return (or even the nominal return) of a broad market index fund, such as VOO or VTI. Especially considering the liabilities and ongoing maintenance costs with owning housing structures.

The labor adjusted return is far better too, you spend minutes and a few clicks investing in an index fund, versus hours and days on real estate.

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

#113

Post by Consultant32452 » Thu, Dec 03, 2020, 5:28 PM UTC

phkahler wrote: post #83

nostrademons wrote: post #67

Earlier quoted context omitted.

It's analogous to investing money in USD or GBP before those countries were given a license to print as many USD and GBP as they wanted. Before then (1931 for the pound and 1933 for the dollar, though they maintained de-facto parity with gold until 1971), dollars and pounds were considered good investments. That's why we had bank runs: people thought their money would be safer under their mattress, and preferred to o…

>> Not so with Bitcoin: the total supply is fixed at 21M, forever, and there's no central authority with the power to change that. But as TFA indicates, there are over 500 other crypto coins. When anyone can create a new one they become irrelevant.

The dollar was just created but is not irrelevant.

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

#114

Post by JMTQp8lwXL » Thu, Dec 03, 2020, 5:28 PM UTC

phkahler wrote: post #83

nostrademons wrote: post #67

Earlier quoted context omitted.

It's analogous to investing money in USD or GBP before those countries were given a license to print as many USD and GBP as they wanted. Before then (1931 for the pound and 1933 for the dollar, though they maintained de-facto parity with gold until 1971), dollars and pounds were considered good investments. That's why we had bank runs: people thought their money would be safer under their mattress, and preferred to o…

>> Not so with Bitcoin: the total supply is fixed at 21M, forever, and there's no central authority with the power to change that. But as TFA indicates, there are over 500 other crypto coins. When anyone can create a new one they become irrelevant.

Anybody can easily create a coin, but if the coin has no market share or broad usage, it has no practical value.

We can make infinite coin types, with each coin type having an infinite number of tradable units; all that matters is adoption. Bitcoin is far more likely to be accepted than a coin you invent tomorrow.

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

#115

Post by misnamed » Thu, Dec 03, 2020, 5:30 PM UTC

okokok___ wrote: post #71

misnamed wrote: post #51

Earlier quoted context omitted.

Stocks are shares in profitable companies. They have risks, sure, but they also have expected returns based on sound fundamentals and a long history of generating income.

>Stocks are shares in profitable companies. Not always, tons of companies are losing money but the share price goes up.

Sure, not always. To clarify: I mean stocks are shares in companies, which generally generate profits. Yes, some companies may not, or may even go under, but none of this is an issue if you hold a diversified set of stock and bond indexes for the long haul (I'm talking about equities as an asset class, not any one stock). Stocks are stakes in companies - bonds pay a risk premium - crypto, gold, etc... don't generate income, which by definition makes them speculative.

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

#116

Post by School-Cotton » Thu, Dec 03, 2020, 5:31 PM UTC

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…

Bitcoin’s ambition is to become the new gold: something that has been ingrained in human culture as “money” for so long that people accept it as such by habit.

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

#117

Post by hammock » Thu, Dec 03, 2020, 5:31 PM UTC

iamspoilt wrote: post #79

nostrademons wrote: post #67

Earlier quoted context omitted.

It's analogous to investing money in USD or GBP before those countries were given a license to print as many USD and GBP as they wanted. Before then (1931 for the pound and 1933 for the dollar, though they maintained de-facto parity with gold until 1971), dollars and pounds were considered good investments. That's why we had bank runs: people thought their money would be safer under their mattress, and preferred to o…

It is fixed at 21M but technically, this can be changed through an Economic Majority [0][1]. [0] https://en.bitcoin.it/wiki/Economic_majority [1] https://bitcoin.stackexchange.com/questions/3945/how-could-t...

What does this concept of Economic Majority look like of we consider it for the US Dollar, rather than btc?

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

#118

Post by asdffdsa » Thu, Dec 03, 2020, 5:31 PM UTC

CapriciousCptl wrote: post #109

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 want to believe it's an investment myself, but haven't been able to-- and by sitting it out we've of course lost a lot of money in forgone gains. Where I get stuck, and maybe someone could help me here-- generally, you don't have to try to hard to imagine a future with cryptocurrency being more useful then it is today. That is, it is more valuable. BUT, why should that mean that its price should be higher? It's lik…

Are you disagreeing with the fundamental economics argument of supply and demand? More demand assuming a constant (forecasted) supply means the price will be higher.

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

#119

Post by Triv888 » Thu, Dec 03, 2020, 5:32 PM UTC

nostrademons wrote: post #67

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…

It's analogous to investing money in USD or GBP before those countries were given a license to print as many USD and GBP as they wanted. Before then (1931 for the pound and 1933 for the dollar, though they maintained de-facto parity with gold until 1971), dollars and pounds were considered good investments. That's why we had bank runs: people thought their money would be safer under their mattress, and preferred to o…

Bitcoin specs change all the time and they could decide to increase the supply

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

#120

Post by dandanua » Thu, Dec 03, 2020, 5:33 PM UTC

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…

It shouldn't be called an investment. Investment supposed to be spent on the production of new value. Bitcoin, despite its good intentions, is a pyramid scheme — its price grows only because of newcomers. I wrote a blog post about why it's a bad "investment" — https://dandanua.github.io/posts/why-i-wouldnt-recommend-usi...