BITCOIN

Malthusian

ZingPowZing said:

 If you lose £20,000 today "on paper", that is as real as a tax-bill or losing a suitcase with £20,000 in it, or a small inheritance. We would react very differently but there is no quantifiable difference. 

There is a difference between a loss of £20,000 in a diversified non-geared investment in the global stockmarket, that will recover providing the world economy hasn't entered a new Dark Age, and a loss of £20,000 in a crypto token, that will recover if and only if you can find a bro willing to buy your tokens off you for £20,000 higher than the current value. (Which only leaves you back where you started.)

Unless of course you are a bro who believes that the possibility of all global stocks collapsing is as likely as the possibility of being caught on the sharp end of the mathematics of a zero-sum game. In which case carry on stobbling your chunkbuckets and BMFRing and whatever other made-up words are currently being bandied about on Reddit to pretend that Bitcoin is different from every other zero sum game that has gone before.

You asked "What is the difference between losing money in bitcoin and losing money", that's the difference. If you meant to ask "What's the difference in £s between losing £20,000 in Bitcoin and £20,000 in shares" that's a different question.

Prism

The current value of bitcoin, property, equities etc is meaningless until you sell them to turn into cash which you use to buy food, beer, stuff or whatever. Net worth is a pointless stat. Your level of income that those investments can produce is more important, and also only really important to you.

[Deleted User]

thegentleway said:

ZingPowZing said:

Atlas234 said:

ZingPowZing said:

What is the difference between losing money in bitcoin and losing money?
Im thinking none but I’m ready for the masterclass.

Much the same as when the stock markets are down, you don't lose anything until you sell your investment

Yes of course you do. 
“You don’t lose anything until you sell your investment,” is the same as saying You don’t gain anything until you sell your investment; in which case someone ought to review Warren Buffet’s credit rating.

How Crystallization Works

When an investor buys a capital asset, an increase (or decrease) in the value of the security does not translate to a profit (or loss). The investor can only claim a profit (or loss) after he has sold the security. Selling the security at a profit is referred to as crystallizing a capital gain.
https://www.investopedia.com/terms/c/crystallization.asp

To be fair, I have seen "you don't lose anything until you sell your investment"  from many posters and wondered where they read it. Where Investopedia refers to claiming a profit or loss under the head How Crystallisation Works, some seem to have interpreted it literally to mean, You don't become poorer until you sell your investment. I think that is unhelpful in multiple ways.  

Firstly, it panders to the idea that all investments come good in the end rather than the much healthier idea that nobody knows everything and will get some investments right, some wrong.

Secondly, it abstracts the risk. And when that investment is in an inherently abstract medium like Bitcoin - where literally nobody knows its current value - you have a recipe for speculation, and speculation's victims.

[Deleted User]

Malthusian said:

ZingPowZing said:

 If you lose £20,000 today "on paper", that is as real as a tax-bill or losing a suitcase with £20,000 in it, or a small inheritance. We would react very differently but there is no quantifiable difference. 

There is a difference between a loss of £20,000 in a diversified non-geared investment in the global stockmarket, that will recover providing the world economy hasn't entered a new Dark Age, and a loss of £20,000 in a crypto token, that will recover if and only if you can find a bro willing to buy your tokens off you for £20,000 higher than the current value. (Which only leaves you back where you started.)

Unless of course you are a bro who believes that the possibility of all global stocks collapsing is as likely as the possibility of being caught on the sharp end of the mathematics of a zero-sum game. In which case carry on stobbling your chunkbuckets and BMFRing and whatever other made-up words are currently being bandied about on Reddit to pretend that Bitcoin is different from every other zero sum game that has gone before.

You asked "What is the difference between losing money in bitcoin and losing money", that's the difference. If you meant to ask "What's the difference in £s between losing £20,000 in Bitcoin and £20,000 in shares" that's a different question.

Your histrionics are entertaining but what is the difference, Malthusian?
Apart from promising a different reward down the line?

HansOndabush

Yeah basically if its gone down you've lost. End of. You then have to decide whether to sell and limit further losses or carry on holding in the hope of a reversal in fortune. Either way you have lost, fact.

[Deleted User]

HansOndabush said:

Yeah basically if its gone down you've lost. End of. You then have to decide whether to sell and limit further losses or carry on holding in the hope of a reversal in fortune. Either way you have lost, fact.

And that was all she wrote.

tichtich

If the price of an asset falls because its material prospects have got worse,  then of course that's a loss. For example,  you own shares in a company whose factory burns down, and its share price slumps as result.

On the other hand,  if the price has only fallen because of a temporary change in market sentiment, then it doesn't matter unless you sell before the sentiment changes back again. 

In the case of Bitcoin, the price is almost entirely a matter of market sentiment. The question is whether the sentiment has changed temporarily or permanently. 

Scottex99

TimSynths said:

Well that was a bit brutal! I've been through this before and its never nice but i'm not as panicked as I was the first time.

Yeah, chilling.

Asia might crash it again but picked up some nice buys near the lows. Now Elon is tweeting that Tesla has Diamond Hands haha, weirdo

HansOndabush

tichtich said:

In the case of Bitcoin, the price is almost entirely a matter of market sentiment. The question is whether the sentiment has changed temporarily or permanently.

Exactly, bitcoin price is driven by pure speculation; it's failed as a currency and failed as a 'store of wealth'.

[Deleted User]

tichtich said:

If the price of an asset falls because its material prospects have got worse,  then of course that's a loss. For example,  you own shares in a company whose factory burns down, and its share price slumps as result.

On the other hand,  if the price has only fallen because of a temporary change in market sentiment, then it doesn't matter unless you sell before the sentiment changes back again. 

In the case of Bitcoin, the price is almost entirely a matter of market sentiment. The question is whether the sentiment has changed temporarily or permanently. 

No, that's entirely the wrong way round, tichtich: 
The market is not in error if it does not conform to your reading. I often think it is but when I come to trade, nobody else cares!
Many investors seem to be clinging to the comfort of the idea that the market will eventually say You're right (as if you are a stopped clock).