I’ve invested in Bitcoin – it’s been a...

245

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  • grey_gym_sock
    grey_gym_sock Posts: 4,508 Forumite
    some cryptos do have uses, so they're certainly not worthless.

    the same goes for tulip bulbs.

    at some time (though nobody can tell when), bitcoin will go past its previous all-time high (from last december), and tulip bulbs will go past their previous all time high (from 1637).

    that's why i include both a diversified basket of cryptos, and a diversified basket of tulip bulbs, and a diversified basket of metals, and other things, within the commodities allocation of my portfolio.

    but don't allocate more than about 5% of your portfolio to commodities. they're there for diversification (i.e. they sometimes go up/down when equities or bonds go down/up), not for return. the likely real (after inflation) return from commodities is about 0%.

    (note: the commodities allocation of my portfolio happens to be 0% (anything between 0% and 5% could be reasonable), but notionally 25% of that 0% is in cryptos.)
  • Linton
    Linton Posts: 17,063
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    Completely agree with BinkyStottom. If you actually do your research, crypto currencies are more akin to venture capital investing than they are gambling. Some might be worth 0, but a handful will definitely be worth serious $$$.

    That's why you need a balanced portfolio, and to do your homework!

    Disagree. The trouble with holding multiple crypto currencies is that they are highly correlated - they rise and fall together. Successful venture capitalists invest in a range of different companies that largely succeed or fail independently on their own merits.

    There is no "definitely" about some crypto currencies eventually being worth $$$. Crypto currency technology, once it has been refined a bit, may be the future but the chance of any of the current implementations being worth anything other than $0 in the medium to long term seems very low.
  • msallen
    msallen Posts: 1,494
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    You know what, I'm happy for the government to continue thinking that cryptocurrency is gambling because I won't have to pay taxes on my gains.

    However, to disagree with Malthusian in post #2 That is merely his opinion of gambling vs investing, that is not a factual definition of either.

    The thing about Bitcoin or cryptocurrency in general is that you will get a lot of advice and opinion from people who don't know what they're talking about, don't understand what it is, have money already tied up in traditional stocks and shares but the worst opinion comes from those who feel threatened by it.

    There's only three criticisms I would make towards Guy Anker' investment...

    1: He invested at the wrong time (could have got in at a much better price)

    2: He didn't invest anywhere near enough!

    3: He doesn't understand what he's investing in and how to go about it (exchanging currencies in coinbase is a no no)

    Actually, the more I read, the more issues I have with the whole blog...
    Completely agree with BinkyStottom. If you actually do your research, crypto currencies are more akin to venture capital investing than they are gambling. Some might be worth 0, but a handful will definitely be worth serious $$$.

    That's why you need a balanced portfolio, and to do your homework!

    ... and still the religious fervour continues amongst those who've drunk the cool-aid...
  • Reaper
    Reaper Posts: 7,277
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    (note: the commodities allocation of my portfolio happens to be 0% (anything between 0% and 5% could be reasonable), but notionally 25% of that 0% is in cryptos.)
    lol, but I agree. I have approx 2% of my investments in crypto which seems about right to me given the risk.
  • Malthusian
    Malthusian Posts: 10,898
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    You know what, I'm happy for the government to continue thinking that cryptocurrency is gambling because I won't have to pay taxes on my gains.

    If you are in the UK, you are wrong. Gains from cryptocurrency are subject to capital gains tax.
    However, to disagree with Malthusian in post #2 That is merely his opinion of gambling vs investing, that is not a factual definition of either.

    Wrong again. It is an objective, factual definition commonly accepted by everyone except people who want to convince themselves that gambling is rational behaviour which will allow them to get rich quick.
    The thing about Bitcoin or cryptocurrency in general is that you will get a lot of advice and opinion from people who don't know what they're talking about, don't understand what it is, have money already tied up in traditional stocks and shares but the worst opinion comes from those who feel threatened by it.

    I would say the worst opinion comes from those who want to steal your money, but hey ho.
    1: He invested at the wrong time (could have got in at a much better price)

    2: He didn't invest anywhere near enough!

    This would be outstandingly useful advice if Guy had access to a time machine.
    If you actually do your research, crypto currencies are more akin to venture capital investing than they are gambling

    Venture capital investing = I give money to an entrepreneur in exchange for part of his startup company. As his company grows, my share grows. If the company is sold or wound up the entrepreneur has to give me a share of the proceeds, and if the company is profitable he has to give me a share of any profits distributed as dividends. This gives my share value, which I can sell to somebody else.

    Cryptocurrency token = I give money to a serial entrepreneur in exchange for points. My points can in theory used to track invoice financing or some other solution in search of a problem, but the real reason I bought the points is in the hope that somebody will give me more money for them later. As nobody who bought the points cares about invoice financing and only cares about selling for more they put in, everyone is relying on the Greater Fool Theory. The serial entrepreneur owes me nothing, and while everyone else is scrabbling around trying to sell their points to each other, he walks away with the real money.

    Once again "do your research" equals "read total nonsense until you have convinced yourself that you have an edge".
  • BinkyStottom
    BinkyStottom Posts: 15 Forumite
    the same goes for tulip bulbs

    Can we stop with the Tulip comparisons? It really isn't even similar no matter how often it's thrown bout by news outlets.
    Linton wrote: »
    The trouble with holding multiple crypto currencies is that they are highly correlated - they rise and fall together

    Not entirely accurate...

    The cryptocurrency market does tend to rise and fall as a whole, but what market doesn't? And there are many coins that tend to do completely the opposite of others.
    msallen wrote: »
    ... and still the religious fervour continues amongst those who've drunk the cool-aid...

    How about you share your extensive knowledge of the subject with us? Then we can point out just how little you really know.
  • Malthusian
    Malthusian Posts: 10,898
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    Can we stop with the Tulip comparisons? It really isn't even similar no matter how often it's thrown bout by news outlets.


    No matter how often you say "This time it's different", it isn't.
  • BinkyStottom
    BinkyStottom Posts: 15 Forumite
    edited 10 May 2018 at 9:34AM
    wrote:
    althusian;74267784]If you are in the UK, you are wrong. Gains from cryptocurrency are subject to capital gains tax

    "users who buy and sell coins in a similar way to an investment are required to pay capital gains tax"

    The way that legally breaks down is, if you buy crypto with money secured via a loan or similar, you are subject to capital gains tax. If you buy crypto with savings or wages, you are not.
    Malthusian wrote: »
    Wrong again. It is an objective, factual definition commonly accepted by everyone except people who want to convince themselves that gambling is rational behaviour which will allow them to get rich quick

    Wrong again.

    investment [in-vest-muh nt]

    noun 1. the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value


    Malthusian wrote: »
    This would be outstandingly useful advice if Guy had access to a time machine

    My point #3 still stands, he should have researched what he was getting into before jumping in blind, he would have known it was the wrong time.
    Malthusian wrote: »
    No matter how often you say "This time it's different", it isn't.

    Really? They're the same how? This Tulip metaphor is meaningless, they're different things with different uses from different times when the world was different.
  • BinkyStottom
    BinkyStottom Posts: 15 Forumite
    I don't understand why you no-coiners are so argumentative when it comes to crypto currencies.

    This is a new opportunity for everyone. Wouldn't you have loved to have invested in Apple or Google or Amazon back when they were just starting out? This is just that! This is the new internet, these are the new Apple, the new Google, the new Amazon.

    Years ago, you couldn't give away stock in Google because people didn't understand! It wasn't something you could touch, it was an algorithm and people couldn't wrap their heads around it.

    You owe it to yourself to understand, you will be left behind and you will regret it.
  • Naf
    Naf Posts: 3,160
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    I bought £100 worth 2 years ago (before it went totally crazy and transaction costs were low) to pay for some bits and pieces. Over the course of the year I spent £90 worth, and ended the year with £130 left over. Then it all went nuts and the value of what I had peaked at about £700.
    I moved it to a trading platform, withdrew about another £100, and thought I'd see if I could play the market a little with what is now essentially winnings. I've lost £150 trying it :rotfl:
    Never argue with stupid people, they will drag you down to their level and then beat you with experience.
    - Mark Twain
    Arguing with idiots is like playing chess with a pigeon: no matter how good you are at chess, its just going to knock over the pieces and strut around like its victorious.
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