BITCOIN

Aegis

MeteredOut said:

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".

There might well be some use for a decentralised token of some sort, but before it takes off and becomes commonplace they will need to work out how to address the gross inefficiencies inherent in needlessly duplicating the transactions, especially when the redundancy is achieved by huge networks solving completely arbitrary and pointless cryptographic puzzles. There's something to be said for that kind of redundancy with things like a property ownership ledger where the underlying asset is somewhere you live and needs protection that just can't be easily achieved because of the rarity of transactions for that property, but even then it's hardly necessary to replicate that more than a handful of times - certainly not thousands or millions.  In fact, the problem is already addressed with things like off-site backups and cloud hosting, and if the system needs more trust, then audits by independent bodies.  Much like banks do with their account information, meaning we do not have to worry about dodgy banks stealing our money for the most part, and the solution is a fraction of the cost of a fully decentralised network.

As I have been saying for years, cryptocurrency is an interesting solution begging for a problem to solve.

Scottex99

Cherry pick whatever date you like -

2015? 2017? 2021? Last week? Most are up, some recently are down. Shock horror retail people finally bought at ATH and have got burned (short term) again. Same as if I bought NVDA last week, which I did actually haha. Found some USD lying around in eToro and thought why not have some exposure to this monster gain stock? Fully expecting I'd be in the red, which I am.

I gave a year as an example as its a pretty arbitrary number - I can easily see that % change on any cointracker.

The pro arguments and related price rise have been well documented here over the last 50-100 pages or so, plus discussions around the $40k mark. Not like we all popped up at $73k and started shouting told you so and you need to put all your money in right now or you'll be left behind. I'll not bother with them right now.

2022, FTX blew up, taking a lot of firms with it and Billions of Dollars were lost. The market was over-leveraged, just like banks were in 2008. Can happen. I'm sure RBS was "creating value" and the share price was reflective of that until.... it wasn't and they needed bailed out and started posting losses of 10-20bn every year.

I'm jumping around, but that's why the BTC price tanked. People lost confidence. It hit $16k I think. People called it dead (again), said it was going to zero (again). But it didn't, it maintained the properties it always had and the price came back. People saw that it could be a speculative investment, that it could be a store of value, that having an asset where the supply has been fixed since the day of its creation, may be a positive thing. Then the ETFs came.

Of course it has its faults, it's not easy to understand how the infrastructure works. You can lose your seed phrase and your assets along with it, you can send coins on the wrong chain, you can have assets stored in an exchange that goes bust. It's not great as a currency either as the value is very volatile but the option is still there, you can buy a coffee via a POS terminal, pay by scanning a QR and have the payment confirmed onchain via Lightning Network in about 20 seconds.

Pump and Dump and Memecoin mania is just part and parcel of the journey, people making and losing Millions on Dogwifhat etc is nothing to do with Bitcoin. There will always be crazy gamblers in any space, look at WallStreetBets for example. And there will be people selling their house last week to open a huge leverage long that's now in big trouble, Again, nothing to do with the underlying utility. 

Most major coins are down 7-12% in the last few hours, I don't know why yet but doesn't change my outlook. Maybe ETF numbers have down, whales are taking profit and people are knee-jerk selling because some influencer promised them BTC was going to $100k pre halving...

Risk/Reward as usual and fair play to the people who could never take this risk and need to protect the nest egg or try to grow it in other ways. But that doesn't make Bitcoin a Ponzi either 

MeteredOut

Scottex99 said:

Cherry pick whatever date you like -

If the internet was around in the1630's, the same would have been said about Tulips. 

"Check pick whatever date you like"

Scottex99

3 years = 15 years?

Bought some more BTC 5 mins ago.

Not looked into the narrative behind this dip but hardly surprising given we’d never hit ATH pre halving before.

Will see how the run up to halving looks and expecting number go up after 

Cus

Imo it's possible that Bitcoin becomes a potential future wealth store similar to gold, therefore in the future it might be used actively when trying to hedge against equity markets and other events, like gold today.  Why we need an alternative I don't know.
Currently it's far to volatile to invest a significant portion of my portfolio.
But for it to get the market cap of gold, it needs a significant level of investment by traditional investors, and central banks.
This has started with the ETF's.
I suspect that the price will rise (with spikes) over the next few years but slower and slower, until eventually it's a boring wealth store with no magic rise coming. During this period many earlier holders will exit, lose interest, move onto something more exciting.  The bitcoin price will slowly ebb away and stabilise with old money holding the asset and wondering why they bothered instead of gold.

Might be worth a £10k punt, but what's the point.

MeteredOut

Scottex99 said:

3 years = 15 years?

Bought some more BTC 5 mins ago.

Not looked into the narrative behind this dip but hardly surprising given we’d never hit ATH pre halving before.

Will see how the run up to halving looks and expecting number go up after 

And there's the rub. You'll find exponentially more people telling you they've bought than telling you why they've bought. And even fewer, if asked, would be able to tell you why they bought*

(*) Other than the usual "to the moooooon" responses.

Scottex99

In this case it's obvious.

Because I believe all points in my previous post and that it'll be worth more in the future than today.

I think it's a classic "mistake" that financial literate people make - The moonboy teenagers or the people selling their car to buy NFTs of frogs, or the orange pilled bulltards, are probably what you see and hear the most. But that's not the whole industry.

The demand is already there, the supply is about to get cut, I think it's an obvious play.

And I'm more than happy to take the gains/losses with however it plays out.

Could be worth 10k, maybe not. The point would be (for me) that it'll make you more money than buying anything else over the next year. Caveat of course about the swings and the need to manage the exit

HHarry

Scottex99 said:

Not like we all popped up at $73k and started shouting told you so and you need to put all your money in right now or you'll be left behind. I'll not bother with them right now.

 That’s exactly what happens.  This thread is like the Mary Celeste when BTC is down, yet it gets a bit of a spurt, approaches ATH and suddenly it’s on page 1 of the board with everyone shouting “to the moon”.

mooneysaver

Aegis said:

Sumselkb said:

I wont have a problem buying it. I'll buy it when its cheap and sell it when its high.

The problem is that it seems technologically complicated. I'm not very good with apps and computers and programs and it seems there's a lot things to learn/do eg software, signing up, verifying, transferring, save passwords, keep secure, exchange rates, fees, Capital Gains Tax. etc. I don't know where to start.

How will you know when it's cheap? Or expensive, for that matter? What is your metric? Is it based on the cost a year ago? 2? 10? If so, why? Is it instead based on a calculation of value based on your ownership of an economic activity? If so, what  activity, and how do you measure it?

You've mentioned you are new to this, but these are fundamental questions you should feel comfortable asking yourself about any proposed investment, and going from 0 to bitcoin is a strategy for tears in the long run if you don't understand the difference between a positive and a negative sum game when considering investments (basically, bitcoin is negative sum, in that the tokens themselves are not economically active, but a proportion of the total ownership of bitcoin is lost each year - this is the same type of structure as playing the lottery or going to a casino.  You might be ahead at certain particular points, but eventually the house edge means that you will lose money unless you change the nature of the game like card counters).

As long as you understand the risks you can dive on in to your heart's content, but I again ask "why is £20,000 cheap and not expensive?"  I sincerely hope that you have an answer better than just "line goes up" or similar.

Most investors use a discounted value calculation which is broadly done like this: decide when you are going to need to sell the asset and then determine the number of halvenings which will occur between that date to calculate the value at the sale date. You then need to discount by your required rate of return (or alternatively the risk free rate if you don't have your own discount rate) and deduct the value today to give you your overall profit in today's terms.

E.g. if you plan to sell within five years any price less than $54,000 will put you in profit assuming a discount rate of 3%

Scottex99

HHarry said:

Scottex99 said:

Not like we all popped up at $73k and started shouting told you so and you need to put all your money in right now or you'll be left behind. I'll not bother with them right now.

 That’s exactly what happens.  This thread is like the Mary Celeste when BTC is down, yet it gets a bit of a spurt, approaches ATH and suddenly it’s on page 1 of the board with everyone shouting “to the moon”.

I’m sure you can back that easy enough with a quote then right