BITCOIN

Aegis

RolandFlagg said:

https://www.forbes.com/sites/frankcorva/2024/03/12/unbanked-bitcoin-users-in-peru-are-changing-their-communities/

The Fiat Ponzi is dying and these people have found a life raft.

That's literally what inflation means.  Inflation encourages investment because people with vast amounts of wealth will look to invest that wealth so that instead of losing value it grows. That drives economic activity, which generally makes the country look like a better place to invest.  This is why the common agreement is that inflation of about 2% is optimal - 0% would actually be a problem for an economy's growth.

It's not a Ponzi scheme because there are no returns that have to be paid from more people buying in to the scheme. It's not even something you could twist into being an accurate analogy.

Aegis

RolandFlagg said:

If your financial advisor that tells you Bitcoin is a ponzi or "too volatile" sack them.
By selling you outdated advice that will give you returns less than real inflation all you are doing
is giving them a nicer lifestyle with their excessive fees for poor advice.

Times have changed. They and you need to change with it.
Better returns and a better sharpe ratio.

Fine, they can sack me. If they have decided that bitcoin is a suitable investment, it means they haven't listened to any of my conversations with them about what an investment is or how to decide whether something represents good value for risk exposure.

When bitcoin crashes for good, they can come back to me with the remnants and ask for my help doing something sensible.

Scottex99

Aegis said:

RolandFlagg said:

If your financial advisor that tells you Bitcoin is a ponzi or "too volatile" sack them.
By selling you outdated advice that will give you returns less than real inflation all you are doing
is giving them a nicer lifestyle with their excessive fees for poor advice.

Times have changed. They and you need to change with it.
Better returns and a better sharpe ratio.

Fine, they can sack me. If they have decided that bitcoin is a suitable investment, it means they haven't listened to any of my conversations with them about what an investment is or how to decide whether something represents good value for risk exposure.

When bitcoin crashes for good, they can come back to me with the remnants and ask for my help doing something sensible.

When’s that then? It’s already crashed for dead 5000 times.

Does something up 150% in a year represent good value for risk and a small allocation?

HHarry

Scottex99 said:

Aegis said:

RolandFlagg said:

If your financial advisor that tells you Bitcoin is a ponzi or "too volatile" sack them.
By selling you outdated advice that will give you returns less than real inflation all you are doing
is giving them a nicer lifestyle with their excessive fees for poor advice.

Times have changed. They and you need to change with it.
Better returns and a better sharpe ratio.

Fine, they can sack me. If they have decided that bitcoin is a suitable investment, it means they haven't listened to any of my conversations with them about what an investment is or how to decide whether something represents good value for risk exposure.

When bitcoin crashes for good, they can come back to me with the remnants and ask for my help doing something sensible.

When’s that then? It’s already crashed for dead 5000 times.

Does something up 150% in a year represent good value for risk and a small allocation?

 Does cherry picking the time frame make it a good thing?  Up 150% in a year, yet only up 5% in 3.

Aegis

Scottex99 said:

Aegis said:

RolandFlagg said:

If your financial advisor that tells you Bitcoin is a ponzi or "too volatile" sack them.
By selling you outdated advice that will give you returns less than real inflation all you are doing
is giving them a nicer lifestyle with their excessive fees for poor advice.

Times have changed. They and you need to change with it.
Better returns and a better sharpe ratio.

Fine, they can sack me. If they have decided that bitcoin is a suitable investment, it means they haven't listened to any of my conversations with them about what an investment is or how to decide whether something represents good value for risk exposure.

When bitcoin crashes for good, they can come back to me with the remnants and ask for my help doing something sensible.

When’s that then? It’s already crashed for dead 5000 times.

Does something up 150% in a year represent good value for risk and a small allocation?

It's irrelevant. A winning lottery ticket would have represented excellent value for money, but I would have no reason to recommend that someone plays the lottery simply because they could end up winning a life changing sum, and I absolutely will not accept blame if they argue after the fact that they should have played because the numbers they would have chosen came up.  The lottery does not make sense from a purely rational look at what it is, i.e. a negative sum game. Same for bitcoin. Doesn't matter that there are some winners, it doesn't change the fact that the average person in either must lose money because of how the systems work.

Aegis

HHarry said:

Scottex99 said:

Aegis said:

RolandFlagg said:

If your financial advisor that tells you Bitcoin is a ponzi or "too volatile" sack them.
By selling you outdated advice that will give you returns less than real inflation all you are doing
is giving them a nicer lifestyle with their excessive fees for poor advice.

Times have changed. They and you need to change with it.
Better returns and a better sharpe ratio.

Fine, they can sack me. If they have decided that bitcoin is a suitable investment, it means they haven't listened to any of my conversations with them about what an investment is or how to decide whether something represents good value for risk exposure.

When bitcoin crashes for good, they can come back to me with the remnants and ask for my help doing something sensible.

When’s that then? It’s already crashed for dead 5000 times.

Does something up 150% in a year represent good value for risk and a small allocation?

 Does cherry picking the time frame make it a good thing?  Up 150% in a year, yet only up 5% in 3.

Exactly.  And regardless of how many bull and bear periods there have been, the underlying asset is still identical to the tokens traded for under $1 each (other than the number of tokens in circulation), so there is no rational reason why they should now be changing hands for close to $70,000.  It's a wholly irrational pseudo-investment and I will have no part of it when giving professional advice. I have yet to come across a single client that actually cares enough about bitcoin to insist that they will be buying some regardless of what I recommend, so I genuinely do not think it is anywhere near as universally adopted as some would have us believe.

Replace bitcoin with something like marbles with a unique crystalline structure in the centre of the ball and you start to realise how insane it would be to suddenly argue that those marbles were worth tens of thousands purely because each one couldn't be exactly copied due to that unique crystalline structure. And yet that is more rational than bitcoin because at least with marbles you can appreciate the unique beauty of the internal pattern or play a game of marbles with friends (not that I have done that since I was a kid, and I am sure that we never actually had any proper rules).

zagfles

Scottex99 said:

Aegis said:

RolandFlagg said:

If your financial advisor that tells you Bitcoin is a ponzi or "too volatile" sack them.
By selling you outdated advice that will give you returns less than real inflation all you are doing
is giving them a nicer lifestyle with their excessive fees for poor advice.

Times have changed. They and you need to change with it.
Better returns and a better sharpe ratio.

Fine, they can sack me. If they have decided that bitcoin is a suitable investment, it means they haven't listened to any of my conversations with them about what an investment is or how to decide whether something represents good value for risk exposure.

When bitcoin crashes for good, they can come back to me with the remnants and ask for my help doing something sensible.

When’s that then? It’s already crashed for dead 5000 times.

Does something up 150% in a year represent good value for risk and a small allocation?

No. Even if I did want a gamble, investing in something that's just risen massively is usually the worst time to buy. Chasing yesterday's winner is a classic rookie investor's mistake. Next is selling just after a big loss. 

Scottex99

No. Even if I did want a gamble, investing in something that's just risen massively is usually the worst time to buy. Chasing yesterday's winner is a classic rookie investor's mistake. Next is selling just after a big loss. 

Obviously.

I’m saying in hindsight would it have met risk reward goals?

Market is well down this morning, I’ll be buying later 

zagfles

Scottex99 said:

No. Even if I did want a gamble, investing in something that's just risen massively is usually the worst time to buy. Chasing yesterday's winner is a classic rookie investor's mistake. Next is selling just after a big loss. 

Obviously.

I’m saying in hindsight would it have met risk reward goals?

Market is well down this morning, I’ll be buying later 

With hindsight everyone would be a billionaire. Without, bitcoin would never have met any of my risk reward criteria. Or any objective criteria. IMO the price isn't driven by anything real, like utility,  prospects, economic outlook etc. Just look at a graph of its price. What's happened to cause the peaks and troughs of the last 5 years? Anything real? Give me a logical reason why bitcoin is now worth over twice as much as a year ago, and why in 2022 it lost way over half its value down from about £34k to £13k? What happened in 2022 to make bitcoin plummet so much? 

Usually, when the price of any asset rises/falls so massively over a short period you can point to some major event that prompted it, such as a technological breakthrough, COVID, big change in the economy, profit announcement etc. But that doesn't seem to be the case with bitcoin. Price seems to be driven purely by speculation, by the weight of speculative opinion feeding on itself till it reaches a tipping point. Fed by hoards of economically illiterate you-tubers and bloggers desperate to pump the price trying to convince gullible fools with FOMO the inevitable rise to the moon. 

The irony is I quite like the idea of a decentralised currency. I can see it being useful. But a currency that it so volatile is completely useless, as I said before. So while bitcoin is completely useless for the utility it supposedly is, I won't touch it with a bargepole. Let the speculators carry on speculating. Let them carry on willy waving when it rises and going back under their rock when it falls. Let them carry on missing the point when they boast about gains or how they or even everyone who owns is now in profit.

It's no different to my mate picking the winner of the 3:30 at Kempton Park and trebling his money. Good luck to him. But I'm not going to take the same gamble, and he wouldn't try to persuade me to. It's a gamble, not an investment. 

MeteredOut

zagfles said:

Scottex99 said:

No. Even if I did want a gamble, investing in something that's just risen massively is usually the worst time to buy. Chasing yesterday's winner is a classic rookie investor's mistake. Next is selling just after a big loss. 

Obviously.

I’m saying in hindsight would it have met risk reward goals?

Market is well down this morning, I’ll be buying later 

With hindsight everyone would be a billionaire. Without, bitcoin would never have met any of my risk reward criteria. Or any objective criteria. IMO the price isn't driven by anything real, like utility,  prospects, economic outlook etc. Just look at a graph of its price. What's happened to cause the peaks and troughs of the last 5 years? Anything real? Give me a logical reason why bitcoin is now worth over twice as much as a year ago, and why in 2022 it lost way over half its value down from about £34k to £13k? What happened in 2022 to make bitcoin plummet so much? 

Usually, when the price of any asset rises/falls so massively over a short period you can point to some major event that prompted it, such as a technological breakthrough, COVID, big change in the economy, profit announcement etc. But that doesn't seem to be the case with bitcoin. Price seems to be driven purely by speculation, by the weight of speculative opinion feeding on itself till it reaches a tipping point. Fed by hoards of economically illiterate you-tubers and bloggers desperate to pump the price trying to convince gullible fools with FOMO the inevitable rise to the moon. 

The irony is I quite like the idea of a decentralised currency. I can see it being useful. But a currency that it so volatile is completely useless, as I said before. So while bitcoin is completely useless for the utility it supposedly is, I won't touch it with a bargepole. Let the speculators carry on speculating. Let them carry on willy waving when it rises and going back under their rock when it falls. Let them carry on missing the point when they boast about gains or how they or even everyone who owns is now in profit.

It's no different to my mate picking the winner of the 3:30 at Kempton Park and trebling his money. Good luck to him. But I'm not going to take the same gamble, and he wouldn't try to persuade me to. It's a gamble, not an investment. 

Bitcoin discussions on Social Media (including this thread) remind me of those folk on facebook who only ever post their betting slips after a win, but never post the others where they picked a DOGE, sorry, dog.

What frustrates me is that I do believe the underlying blockchain/crypto technology has some huge utility (possibly as the basis of a decentralised currency) but its the pump-and-dump trading that catches peoples attention. However, it's their money - some will win big, many will lose. I can almost guarantee there will be people wanting a class-action lawsuit against some exchange in future due to their "mis-selling".