Bitcoin

Retireby40

[Deleted User] said:

Retireby40 said:

I don't understand it enough so won't be investing and there isn't value for me. Maybe if it drops again to 10k or so I may go for it.

I've heard that so many times already. First time around 2013 when Bitcoin reached $1000 for the first time. Many people I know  didn't bought it then, "it's too expensive, I've missed the boat!" Few years later, Bitcoin fall back to $100. They didn't bought it, because it fall so much it must be dead! No?

Now, you are here, 7 years later, saying that it's "too expensive" to buy. You don't yet realize how funny that will sound with Bitcoin price £100k or £250k.

And you are not the only one to make that mistake: https://www.businessinsider.com.au/imf-head-christine-lagarde-says-bitcoin-is-too-expensive-for-me-at-the-moment-2017-10

IMF's Christine Lagarde said that in October 2017, at price around $4400, just before price took off to all time highs ($20k) in 2018.

But when it will eventually crash, let's say to your level of £10k, it will be in circumstances which will scare people, as usual - well planned scare tactics, big exchange hacks, hostile government regulation, often all at once, all this will make price to crash and you will not buy back because of fear - just like you didn't bought the dip in March 2020.

Didn't buy the dip in March because I was out of work and didn't know when I would be back. Ive only basically properly had money to play with the last couple of months. Hence throwing a few £1000 into something I didn't know enough about was too risky for me.

I have a bad attitude towards bitcoin. Probably jealously as I am never done hearing and reading about people turning £1000-3000 into 50-60-70k. While I wouldn't call it life changing money its huge profit. It makes a difference.

Obviously that's always the paper talk and people only ever boast of their wins never their loses but I dunno. Doubling my money or maybe trebling it isn't worth it for what I would be putting into crypto. Could still represent a solid investment but as I said its something I don't understand and when things like what has happened over the last 4 weeks happen it makes me dubious.

[Deleted User]

Retireby40 said:

Didn't buy the dip in March because I was out of work and didn't know when I would be back. Ive only basically properly had money to play with the last couple of months. Hence throwing a few £1000 into something I didn't know enough about was too risky for me.

I didn't know that you didn't invested in March 2020, I just guessed it. If you said it in previous posts I didn't read it. It was easy to guess because everything you expressed in last few posts, your risk averse approach (not really "Retireby40" approach I might say), might be reasonable for bonds and new in town! all-time-high 0.5% saving accounts!, but sadly misplaced for Bitcoin discussion.

HansOndabush

Bubbles blow up, they pop. South Sea bubble, Mississippi bubble, tulip bulbs, Japan's Stockmarket, .net boom, and now bitcoin. Everyone invested in these bubbles sounds very smart until the inevitable day comes when they are wiped out.

bowlhead99

HansOndabush said:

Bubbles blow up, they pop. South Sea bubble, Mississippi bubble, tulip bulbs, Japan's Stockmarket, .net boom, and now bitcoin. Everyone invested in these bubbles sounds very smart until the inevitable day comes when they are wiped out.

That's the problem with speculative investments. The price is pretty unpredictable.  But when Bitcoin was $5000 or $10000 its naysayers were telling us that "if I wanted to buy a bubble, tulip bulbs are more useful" ; less than a year later, it's  $40,000 today. 

If you have a 'only speculate with what you can afford to lose' mentality, it is a limited risk bet. When I bought a few thousand-worth in my pension in the summer, I could only lose those few thousands - you can't lose more than 100% of what you put in -  but the upside was greater than those few thousands, because you can 'win' more than 100% of what you put in, if you're lucky.  And now it's priced about 4x what it was in July, so some profits taken out have covered the original cost (and the original cost of the ETC in the pension was in itself covered by previous bitcoin profits), and my retirement won't fail if I lose it, so I'm happy to still keep a few thousand of exposure.

So there are all sorts of people thinking what they have left is a 'free ride' rather than cold hard cash that they could or should put into a more legitimate conventional investment, so they are not selling as much as they could, so the demand from the greater fools is not being covered by the supply from the earlier fools exiting.

There's no published table of what the chances are that you will more than double your money, or lose your money, so the risk is entirely unknown, but the people who have seen it tenbagging from from $10 to $100, then $1000, and $10,000 then $20,000 and now $40000 today (not in a straight line) are thinking they are up for the gamble, because maybe the $40,000 will get to over $80000 instead of $0. The FOMO crowd are thinking it is heads or tails whether it will crash or soar, and the potential upside from soaring is more than the downside from crashing. If it really was 'heads or tails' 50:50 on losing your stake or more than doubling your stake, the maths says you should play. The only problem is we don't know whether it is really 50:50 or 90:10 or 99:1 or 1:99. That's the problem with bubbles. Someone gets burned. But someone doesn't; so lots of people hope to be the one(s) that doesn't, and will have a punt.

thegentleway

Retireby40 said:

[Deleted User] said:

Retireby40 said:

I don't understand it enough so won't be investing and there isn't value for me. Maybe if it drops again to 10k or so I may go for it.

I've heard that so many times already. First time around 2013 when Bitcoin reached $1000 for the first time. Many people I know  didn't bought it then, "it's too expensive, I've missed the boat!" Few years later, Bitcoin fall back to $100. They didn't bought it, because it fall so much it must be dead! No?

Now, you are here, 7 years later, saying that it's "too expensive" to buy. You don't yet realize how funny that will sound with Bitcoin price £100k or £250k.

And you are not the only one to make that mistake: https://www.businessinsider.com.au/imf-head-christine-lagarde-says-bitcoin-is-too-expensive-for-me-at-the-moment-2017-10

IMF's Christine Lagarde said that in October 2017, at price around $4400, just before price took off to all time highs ($20k) in 2018.

But when it will eventually crash, let's say to your level of £10k, it will be in circumstances which will scare people, as usual - well planned scare tactics, big exchange hacks, hostile government regulation, often all at once, all this will make price to crash and you will not buy back because of fear - just like you didn't bought the dip in March 2020.

 Probably jealously as I am never done hearing and reading about people turning £1000-3000 into 50-60-70k. While I wouldn't call it life changing money its huge profit. It makes a difference.

Are you jealous about the people that make that kind of money from individual stocks? It's no different, it's just luck. Nobody can predict what's going to happent with bitcoin just like nobody can predict individual shares' performance.

Type_45

Bitcoin is an alternative to gold. It's a storage of wealth. Bitcoin is not an alternative to cash. There are other crypto currencies which are better suited to be transacted with.

I happen to believe (rightly or wrongly) that Bitcoin is here to stay and that one bitcoin will be worth £100,000+ before long.

My concern is CGT, if you do make money. You are allowed to make £12,300 per year without declaring it (someone please correct me if that's wrong). But the exchanges and apps are in touch with HMRC and your investment is not known only to you and the exchange.


I would far rather invest in bitcoin through my ISA for tax reasons. Does anyone know of a fund where this is possible? 

HansOndabush

Bitcoin is neither an alternative to gold nor a store of wealth. It is a different asset class to gold. I don't believe it stores any wealth as although the numbers of numbers are restricted, at the end of the day they are simply numbers with no inherent value and which can't be used for anything useful.

RichTips

HansOndabush said:

Bitcoin is neither an alternative to gold nor a store of wealth. It is a different asset class to gold. I don't believe it stores any wealth as although the numbers of numbers are restricted, at the end of the day they are simply numbers with no inherent value and which can't be used for anything useful.

Over the last 10 years Bitcoin seems to have demonstrated remarkable resilience in the face of this 0 value perspective, consistently trending upwards despite multiple booms and busts. 
Outside of whether or not it will go up or down in price from here, would you not consider it possible that you may be uninformed about its significance given this? 

barnstar2077

RichTips said:

HansOndabush said:

Bitcoin is neither an alternative to gold nor a store of wealth. It is a different asset class to gold. I don't believe it stores any wealth as although the numbers of numbers are restricted, at the end of the day they are simply numbers with no inherent value and which can't be used for anything useful.

Over the last 10 years Bitcoin seems to have demonstrated remarkable resilience in the face of this 0 value perspective, consistently trending upwards despite multiple booms and busts. 
Outside of whether or not it will go up or down in price from here, would you not consider it possible that you may be uninformed about its significance given this? 

The difference is that gold has a use, it isn't just stockpiled, it is also used for jewellery and electronics.  Bitcoin so far feels more like an idle game.  I understand why people buy it, because they think they can make money, but other than that it is worthless.

csgohan4

bitcoin has a place in one's own portfolio, as long as they understand the risks are far greater and the volatility as well.

One man's meat is another man's poison