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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

#41

Post by [deleted] »

PretzelPirate wrote: post #38
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 think part of the confusion is the word “currency”, which implies it’s something like USD. Ethereum’s ETH token, for example, is an asset that will appreciate if demand of the Ethereum network increases for real-world business applications (not just financial payments). That makes it much more like investing in a limited resource (ex: oil) that will go up in value. It’s still speculating, but most stock investments…

[deleted]

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

#42

Post by bitxbitxbitcoin »

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 more analagous to buying some gold for your investment portfolio than buying a fiat currency that has its inflation under control by a central government.

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

#43

Post by baron_harkonnen »

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 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 for questioning it. I remember people telling me I was crazy for not buying a house in 2007, and crazy for not trading tech stocks in 1999.

[0] https://www.stephendiehl.com/posts/crypto.html

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

#44

Post by elevenoh »

anm89 wrote: post #23
elevenoh wrote: post #12

No brainer considering to buy ETH on the stock market via grayscale you're paying a 104% premium. The demand (e.g. within registered & margin accounts) is there. https://ycharts.com/companies/ETHE/discount_or_premium_to_na... Aside: Seems covid is accelerating understanding & adoption of crypto. I remember when I couldn't perform a wire transfer for a full week back in March '20 - at one of the most reputable banks g…

When you say stock market, do you actually mean stock market or a crypto exchange? I'm not under the impression that there is any way to buy ETH via any stock market.

stock-market traded securities that hold crypto underlyings.

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

#45

Post by jamesmehaffey »

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…

If you are using blockchain tokens to run an application, then you are essentially paying A large network of computer operators for their combined processing capacity. This means their electricity, maintenance cost, etc. instead of investing in servers that will be old by the end of the year. So purchasing cryptocurrency is in fact a very real investment. Think of it like an airline purchasing jet fuel three months ahead of time.

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

#46

Post by bitxbitxbitcoin »

ahelwer wrote: post #2

Wonder how the weighting will work. If you don't massively overweight smaller coins, you'd just end up holding like 80% Bitcoin & Ethereum with very little of anything else.

ETH and BTC dominance is closer to 73% at the moment.[1] But your point is still very much valid.

[1] https://www.coingecko.com/en

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

#48

Post by ajay-d »

anm89 wrote: post #21
wp381640 wrote: post #6

Earlier quoted context omitted.

Probably the best strategy tbh, you only have to go to a few spots down to find some bad coins and the edge of the top 10 to find some outright scams

Bitcoin cash comes in at #7 on coinmarket cap and while I wouldn't call it a scam, it's not a respectable project IMO. And it quickly gets worse from there over the next 10. Strongly agree that the best bucket is going to be composed of a vast majority of bitcoin and ethereum. I don't believe crypto is on the whole in a bubble right now but the fact that Bitcoin Cash has a market cap of >$5B is one of the biggest thi…

I was more shocked to hear there are at least 550 actively traded coins.

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

#49

Post by Alex3917 »

baron_harkonnen wrote: post #43
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 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…

As a store of value it's better than gold in some ways, because you don't need to physically store it. But unlike gold, which can appreciate in value indefinitely, Bitcoin is mathematically capped in how much it can appreciate in value because the expected value of mining and purchasing need to go to par.

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

#50

Post by iamspoilt »

bitxbitxbitcoin wrote: post #42
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 more analagous to buying some gold for your investment portfolio than buying a fiat currency that has its inflation under control by a central government.

From the school of thought that I would adhere to (Jack Bogle, Warren Buffet), Gold on its own is not an investment.
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