BITCOIN

Adyinvestment

Interesting answer.

It seems to me that people who are against Bitcoin are attempting to value it in the same way as a stock, and because there are none of the fundamentals that traditionally traders are acclimated to it makes no sense. As someone who has limited experience/time in the traditional form of investing perhaps I am more acceptable of Bitcoin with fewer barriers to break down, you do have to have some degree of "faith" to put your money in Bitcoin.

I am not a youngster but I imagine this is one of the reasons crypto in general appeals to the young, they do not have the same experience with traditional investing and are in affect a blank canvas, combined with how easy it is to find information (and misinformation) and do it yourself investing on the internet.

I find the whole for and against Bitcoin points of view quite fascinating, as it seems most have a very strong for or a very strong against point of view with only a smaller minority without a particular preference, I can see how to some there is an almost religious aura.

I am starting to ramble now and shall go back to my bottle of white...I guess only time will tell us how the Bitcoin revolution will pan out!

Aegis

Adyinvestment said:

Interesting answer.

It seems to me that people who are against Bitcoin are attempting to value it in the same way as a stock, and because there are none of the fundamentals that traditionally traders are acclimated to it makes no sense. As someone who has limited experience/time in the traditional form of investing perhaps I am more acceptable of Bitcoin with fewer barriers to break down, you do have to have some degree of "faith" to put your money in Bitcoin.

I am not a youngster but I imagine this is one of the reasons crypto in general appeals to the young, they do not have the same experience with traditional investing and are in affect a blank canvas, combined with how easy it is to find information (and misinformation) and do it yourself investing on the internet.

I find the whole for and against Bitcoin points of view quite fascinating, as it seems most have a very strong for or a very strong against point of view with only a smaller minority without a particular preference, I can see how to some there is an almost religious aura.

I am starting to ramble now and shall go back to my bottle of white...I guess only time will tell us how the Bitcoin revolution will pan out!

In my case - as someone "against bitcoin" - I am not really trying to value it in any way, just asking others how they do it.  In most cases the answers seem to be either "the netwrok will tend towards parity with X" where X is gold, or USD, or similar, or it's based on how things have behaved to date, ignoring the warning that past performance is not a guarantee of future performance.  I think the closest way you could think of valuing bitcoinis to make a comparison between it and traditional commodities, in that the actual ownership offers no revenues.  The issue is that the actual commodity in question also offers no industrial application or other demand for consumption.  As such, the closest way I can think about it is as a future with either an infinitely long time to the call date or no underlying asset on which the contract is written.  In either case, I genuinely can't ascribe any value to the contract itself, so my valuation for bitcoin has to be zero,

I genuinely hope that things work out well for those that innocently invest in bitcoin because they think traditional investments are too corrupt, but my worry is that most people will end up getting caught out when rationality reasserts itself and the value of bitcoin plummets.

Zola.

Fair points. Only a fool would put all their eggs in one basket, no matter what the asset class is... diversification is the name of the game after all.

Despite that, Bitcoin has outperformed every single investing opportunity since its inception, to not have ANY exposure at this stage of adoption is also equally foolish (in my opinion). It is the single most asymmetric opportunity of our lifetime. Past performance blah blah blah, the point stands...many of the worlds best investors from Paul Tudor Jones, Kevin O'Leary, etc all have Bitcoin now. Are they all wrong? Maybe, but having a position at least gives a huge opportunity if we are all right. 

I still anticipate another 8 years or so of heavy volatility with massive crashes as it grows and the market reacts to inevitable FUD. When Bitcoin mining has proven to be highly sustainable and it's 'acceptable' for public-facing entities to add bitcoin to their balance sheet, there may be a stampede to do so, and there just isn't enough to go around. 

ChesterDog

Adyinvestment said:

I find the whole for and against Bitcoin points of view quite fascinating, as it seems most have a very strong for or a very strong against point of view with only a smaller minority without a particular preference, I can see how to some there is an almost religious aura.

I expect there's a tendency for forum posts to present a polarisation of viewpoints, as those are the people most likely to be motivated to post on the subject and to "correct the erroneous views" of others.

Personally, I'm pretty agnostic on the subject as, I imagine, are many of the silent majority here.

Ironically, I find one of the biggest hurdles to developing a clear view of the subject is this very business of discussions tending to be dominated by entrenched views, often pushed at people, and the varying degrees of contempt for alternative viewpoints. 

It seems to me that an appreciation of cryptocurrency as an investable asset requires one to take a viewpoint, a considered judgement, the acceptance of a degree of faith that cannot really find a comfortable home in the analytical mindsets of those experienced in more conventional investments.

I used to think you're either the sort of person willing to accept that situation, where valuations have no measurable intrinsic basis while still accepting their potential validity, or you're not.

However, it seems increasingly to me that the sensible approach is to accept that (despite the hot air), nobody really knows where it's all headed, so it's probably worth getting on board for the ride, even if in only a small way, accepting and embracing the fact that only hindsight will have the answer.

caprikid1

Am I the only one who finds the term "crypto assets" to be slightly amusing ?

Malthusian

Zola. said:

Despite that, Bitcoin has outperformed every single investing opportunity since its inception

This is incorrect. It has underperformed every single investing opportunity that delivered a return above zero. Punters' money in == punters' money out. The performance of an investment is the performance across all investors, not performance for some random cherry-picked subgroup that cashed out at a profit.

This is not a matter of "entrenched viewpoints", just maths.

Virtually no-one mined a Bitcoin at inception and still holds it today or cashed out in the last 12 months. The biggest hodler of coins mined at inception, Satoshi Nakamoto, lost all of them. The rest cashed out years ago.

Zola.

Investing isn't a group project where we all win, there are always winners and losers between buyers and sellers. Stocks are no different.  If you hold long enough onto the right asset, you typically win.

Let's go back as far as google BTC pricing will let me.... today that's November 20th, 2015.  The fact of the matter is if I spent £1000 back then it would have bought me 5 Bitcoin. Today that value is £220,365. I sure wish I was a "crypto bro" back then, and if people here were honest with themselves, they'll have regretted missing that opportunity too. 

HCIMbtw

When I see news like 'Amazon to stop accepting visa' because of the associated fees associated with transaction (about 2.4% of turnover for a small company). 

All I can think is how crypto and DeFi can easily fill a service like this with significantly lower fees

adindas

Adyinvestment said:

As someone who is an IFA and also clearly against Bitcoin at this time, I am curious as to what it would take (if anything) for you to advise a client to consider putting money in Bitcoin?

This just my general view regarding using an IFA services, I am not refering to a particular  IFA.

To me I do not need to pay a financial advisor just to tell me to invest in treasury Bond earning about 1.5 % a year.

In term of stock, I also do not need a financial advisor telling me to invest in index fund S&P 500, FTSE 100, Vanguard Life Strategy, Vanguard Target Retirement Fund, etc either.

If I use an IFA I am expecting my money to beat the market to grow at least 30%+ a year. I do not need them just to tell me to invest in bonds, in index funds, multi assests well diversified funds. It is a very simple job. It is only the laziest cannot perform the job “invest and forget”. I will avoid straight away those who advise me to invest in bonds, treasury bonds, government bonds. You get a better return and more flexible of investing your money by throwing your money into Regular Saving Accounts. There are a lot of people on this MSE sharing information about this that could help you making the right decision.

You often see reasonable number of people on this MSE keep quoting chinese proverbs, “The best time to plant a tree was 20 years ago. The second-best time is now.” Well, in my opinion they apply it out of the context. While this jargon might be more suitable for Index fund such as S&P 500, very well diversified multi asset funds; it is inappropriate to high volatile assets such as BTC, ETH other cryptos as well as high growth stocks. Common sense rule, you should not be catching the knife, where everyone could see the knife is falling, it will hurt you. Why not wait until it has settled and use it for your advantage. You might not get the bottom 100% of the time. But you do not need the “very bottom” but around the bottom is enough. Also you just need to get 50%+ right to make money.

adindas

HCIMbtw said:

When I see news like 'Amazon to stop accepting visa' because of the associated fees associated with transaction (about 2.4% of turnover for a small company). 

All I can think is how crypto and DeFi can easily fill a service like this with significantly lower fees

In addition, you might want to add PayPal, Microsoft, Starbucks, Amazon. You might also see the future value of block chain in the things like distributed economy, increase market efficiency, smart contracts, invaluable contracts, land deeds, etc almost free from politics and government intervention. There are tons of info like this but for the flat earthers they will still think the earth is flat.

Most importantly some people are refering to what Warren Buffet and Charlie Munger are saying regarding Bitcoin. I highly respect WB and CM views in fundamental of investing. But WB and CM make their money before the fourth industrial revolution featured with high growth stocks in technology. But if you compare their fund performance since then, every investor including you and I will beat WB &CM, just by doing almost nothing, just throw you money into S&P 500 and forget it. I posted the graph as evidence in this thread earlier.

Those billionaires who understand from both side the Investing and Technological sides such as Jack Dorsey, Elon Musk, Matthew Roszak, Michael Saylor, Cathie Wood, Tim Cook, Jeff Bezos, Brian Armstrong, Matthew Roszak, Tim Draper, Bill Gates, Mark Zuckerberg will have an entirely different opinion with WB & CM. Not to mention other multi billionaires hudgefund managers such as Ray Dalio, Kevin O'leary, Druckenmiller, etc

A good example is Amazon. The company hardly making any profit in the early day as they was investing for growth, reinvesting revenue they have made to expand the business. Acquire other companies to accelerate the expansion and grow like an octopus. It only made its first profit in the fourth quarter of 2001: $0.01 (i.e., 1¢ per share), on revenues of more than $1 billion.

Facebook did similar thing Acquire other companies to accelerate the expansion, only start making profit in 2004.

Many people could not see the future value of something. Those who could see the future, have invested on both companies since in the early day where there were not a lot of people pay attention, understand the future value of something, what they will create, see where they are now!!!

Similar to BTC, cryptos but in this particular case unless they are blind, or do not read the news this one eveyone could see in relatively shorter period where they were five years ago and where they are now.

In this thread I also posted the Performance of MARA (Marathon Patent Group, Inc.). One of the largest Bitcoin Mining

This company is not mining minerals, precious metals but they are mining Bitcoin. They are not extracting Oils, harvest crops, vegetables, food which everyone understand to have value as you could eat it.

For some people in this thread, they are mining sh1te, worthless asset with only the fools will buy, hoping to sell it at a higher price to another fool.

But guess what this sh1te miners multiples your money 35X+ (yes thirty five times, not 3.5X) in less than a year. What is the P/E ratio of this company? well N/A or infinite.

The next big things to watch might be “METAVERSE”. If you think you have missed blockchain you might not want to miss the next big things.