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  • FIRST POST
    • MSE Luke
    • By MSE Luke 19th Feb 18, 4:33 PM
    • 269Posts
    • 76Thanks
    MSE Luke
    Ive invested in Bitcoin its been a...
    • #1
    • 19th Feb 18, 4:33 PM
    Ive invested in Bitcoin its been a... 19th Feb 18 at 4:33 PM
    'You know what, the headline is wrong. I didn't invest - I gambled. I bought 250's worth of cryptocurrency - Bitcoin, Ethereum and Litecoin - in December. I know nothing about them, I just saw the price rising and thought I could make a quick buck.'

    Read MSE Guy's full blog: 'I've invested in Bitcoin - it's been a roller-coaster. Here's what I've learned'
    Last edited by MSE Luke; 19-02-2018 at 4:35 PM.
Page 1
    • Malthusian
    • By Malthusian 19th Feb 18, 5:20 PM
    • 4,314 Posts
    • 6,806 Thanks
    Malthusian
    • #2
    • 19th Feb 18, 5:20 PM
    • #2
    • 19th Feb 18, 5:20 PM
    You could argue traditional investing is a form of gambling, but that!!!8217;s a debate for another day.
    No, it's a fallacy.

    Gambling = long run negative expectation of return, traditional investing = long run positive expectation of return.

    4% transaction costs! And to think that the sort of people who gamble on Bitcoin say things like "I don't want to be ripped off by the bloodsucking vested interests of the financial industry" - vested interests who charge around 3% for regulated advice (less for larger investments) plus transaction charges in the region of a quarter of a percent.
    • Bonnie151
    • By Bonnie151 19th Feb 18, 5:44 PM
    • 273 Posts
    • 16,014 Thanks
    Bonnie151
    • #3
    • 19th Feb 18, 5:44 PM
    • #3
    • 19th Feb 18, 5:44 PM
    Of course it!!!8217;s a gamble! Martin Lewis posted a link to his Bitcoin article via his fb page a few weeks ago where he entitled it !!!8220;investing in Bitcoin!!!8221;. I suggested he stop calling it investing as it is gambling and he responded by telling me to read the article and then I would understand why he calls it investing (can I roll my eyes and say that I had read the article and strongly disagree with him).

    I wish MSE would stop calling it investing and start calling it gambling. Hopefully this post is a start to a change! I love my Bitcoins and alt coins but how anyone can call them anything other than a gamble is beyond me!

    <rant over>
    Hmmmm, need new siggie
    • Thrugelmir
    • By Thrugelmir 19th Feb 18, 5:48 PM
    • 59,201 Posts
    • 52,594 Thanks
    Thrugelmir
    • #4
    • 19th Feb 18, 5:48 PM
    • #4
    • 19th Feb 18, 5:48 PM
    Even those supposedly in the know surely couldnt have predicted the wild swings from when one Bitcoin was worth about 1,000 last summer, soaring to almost 15,000 late last year, only for it to crash down to about 7,000 now.
    Then there's some extremely poorly educated people in this tech savvy world. Common sense alone should be enough.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • ValiantSon
    • By ValiantSon 19th Feb 18, 6:01 PM
    • 2,167 Posts
    • 2,041 Thanks
    ValiantSon
    • #5
    • 19th Feb 18, 6:01 PM
    • #5
    • 19th Feb 18, 6:01 PM
    I bought 250!!!8217;s worth of cryptocurrency !!!8211; Bitcoin, Ethereum and Litecoin !!!8211; in December. I know nothing about them, I just saw the price rising and thought I could make a quick buck.
    Classic speculator behaviour. Investing in something that you know nothing about because the price is rising is almost the very definition of speculation. This would be true of buying equities, or any other asset too.

    You could argue traditional investing is a form of gambling, but that!!!8217;s a debate for another day.
    You could argue that, but you would be completely wrong.

    Even those supposedly in the know surely couldn!!!8217;t have predicted the wild swings from when one Bitcoin was worth about 1,000 last summer, soaring to almost 15,000 late last year, only for it to crash down to about 7,000 now.
    I, and lots of others, predicted those swings. It wasn't exactly hard.

    The technology behind these currencies is called blockchain. Some very clever people have tried to explain it to me but I!!!8217;ve still little clue.
    "So I decided to buy into it!"

    Without wishing to blow my own trumpet, I know a thing or two about personal finance given my job. But I have to hold up my hands with crypto that I!!!8217;m an amateur.
    By the sounds of it, not just with cryptocurrency, but with any form investments, given the nonsense written within this blog that displays zero understanding of how markets work.

    I, like many others, thought !!!8220;wow!!!8221; when the price kept soaring late last year. I just wanted some of the excitement of getting involved as, other than a 20 buy-in when I play poker with my mates once a month or putting $30 on the tables when I went to Las Vegas a couple of years ago, I rarely gamble.
    Whereas, I, like many others, thought, "Look at that enormous bubble; I won't be going anywhere near that with my money!"

    A friend told me he!!!8217;d bought some crypto and as there was a possibility it would keep rising I thought !!!8220;why not?!!!8221;
    Always a bad reason to invest in something. "I had a tip from a friend [who also knows nothing about what he has invested in]."

    I have no intention of ever using any of the currencies I!!!8217;ve bought, I just hope for my gamble to net a profit.
    Good luck.

    Why would it return a profit? You've already commented on the wild volatility, so how can you even begin to know when to sell? Have you considered the intrinsic value of the asset? No, because, you "know nothing" about it.

    I used the Coinbase app as after some quick research
    Nothing like doing your homework is there? And that was nothing like doing your homework.

    Coinbase isn!!!8217;t the cheapest but the fees were bearable for the convenience. They were about 4% of what I bought.
    4%!!! If someone's equities investments were costing them 4% they would be up in arms about it. 4% is ridiculous. Exactly what is your 4% buying you?

    One thing I have learned is to avoid too many transfers within Coinbase. When I saw Bitcoin!!!8217;s value plateau in December I used some Bitcoin to buy some Ethereum within the app.
    Once again, the lack of understanding of investments shines through. You saw the price starting to fall so you sold. This is the way to lose money. Keep going!

    I was charged for taking money out of Bitcoin, and again, for using it to buy Ethereum.
    Yes, they saw you coming! It's aimed at the credulous who invest with no understanding or knowledge, so they charge high fees that experienced investors wouldn't even consider paying.

    Coinbase can also be expensive when withdrawing money !!!8211; see my colleague Callum!!!8217;s blog on how to withdraw money from Coinbase.
    Yes, I read your colleague's blog, and once I'd picked my chin up off the floor, I wondered why anyone would have used such a service without checking first what the the process was for getting at your money.

    And given the volatility, the whole process means that the price could have swung wildly between when you chose to sell and when you actually were able to.

    As I write this, my 250 gamble stands at 300.57. Sorry, scrap that. It!!!8217;s now 303.65 !!!8211; it moved about 1% in the hour or so between first writing this and applying the finishing touches.

    I!!!8217;ve lost money in theory in the last few weeks, though. It hit 450 a few weeks ago, then dropped to 200ish only to recover a bit to the 300-or-so mark.

    There have been other yo-yo moments within those peaks and troughs. If the stock market had bounced around like Bitcoin, there would be chaos.
    Now there's an investment I don't want to be part of!

    Should you gamble on Bitcoin or other cryptocurrencies?
    Only if you are either completely credulous, or you have so much money that you just don't know what to do with it all.

    You may be reading this in the same position I was in last year when considering whether to take the plunge, and hoping I!!!8217;ll answer that question for you.

    Sorry, I can!!!8217;t. It!!!8217;s simply down to your attitude to risk and whether you are prepared to gamble on something you probably know little about.
    Is your attitude to risk one of being prepared to lose absolutely everything you put in and not being able to sell when you actually want to, and paying sky-high fees for the privilige?

    What I would say is if you!!!8217;re an amateur in this field like me,
    Let me correct that for you: "What I would say is you are an amateur in this field, just like me,"

    See it as a flutter, wondering what number will come up when you open the app !!!8211; and hopefully making some money.
    There are much cheaper ways of betting.
    Last edited by ValiantSon; 19-02-2018 at 11:51 PM. Reason: Typo
    • Malthusian
    • By Malthusian 19th Feb 18, 6:07 PM
    • 4,314 Posts
    • 6,806 Thanks
    Malthusian
    • #6
    • 19th Feb 18, 6:07 PM
    • #6
    • 19th Feb 18, 6:07 PM
    Then there's some extremely poorly educated people in this tech savvy world. Common sense alone should be enough.
    Originally posted by Thrugelmir
    I'm not sure you read the rest of the sentence after "wild swings". When Bitcoin was at 1,000 common sense dictated that it would rise to 15,000 and then collapse to 7,000 etc?

    Pretty much no-one predicted it would go through yet another bubble (or it wouldn't have been at 1,000 at that point). Once it rose to 15,000 then yes, common sense dictated there would be wild swings between the mugs piling in on one side and the economic laws of gravity on the other. But Guy was saying that nobody could have predicted this when Bitcoin had only just recovered the all-time high from which it previously collapsed in 2014.
    • AlisonCVS
    • By AlisonCVS 9th May 18, 10:20 AM
    • 88 Posts
    • 93 Thanks
    AlisonCVS
    • #7
    • 9th May 18, 10:20 AM
    Cryptonash
    • #7
    • 9th May 18, 10:20 AM
    Anyone know anything about CryptoNash - I saw an article quoting they had been on Dragon Den and set up an account with 250. They very slickly managed to persuade me to add a further 750. When they kept pressuring me to add 1000 more I got anxious and decided, "you know what, I am pulling out". I have been waiting 2 weeks for them to close the account and pay me back my money - I don't even care about the apparent profit I have made. Starting to think i have been had.

    Any advise gratefully received.
    Cahoot 8673.84 0
    Natwest 6266.71 0
    Barclaycard 3492.28 0
    Littlewoods 2907.86 0
    • Malthusian
    • By Malthusian 9th May 18, 10:51 AM
    • 4,314 Posts
    • 6,806 Thanks
    Malthusian
    • #8
    • 9th May 18, 10:51 AM
    • #8
    • 9th May 18, 10:51 AM
    Anyone know anything about CryptoNash - I saw an article quoting they had been on Dragon Den and set up an account with 250. They very slickly managed to persuade me to add a further 750. When they kept pressuring me to add 1000 more I got anxious and decided, "you know what, I am pulling out". I have been waiting 2 weeks for them to close the account and pay me back my money - I don't even care about the apparent profit I have made. Starting to think i have been had.
    Originally posted by AlisonCVS
    You have been had. The money is gone.

    Any advise gratefully received.
    Write it off. Change your phone number / email address / however they contacted you - you are on a suckers list. If you fell for this obvious scam you are at high risk of falling for more scams in the future, and might lose more than 1,000 next time.
    • Reaper
    • By Reaper 9th May 18, 12:03 PM
    • 6,280 Posts
    • 4,529 Thanks
    Reaper
    • #9
    • 9th May 18, 12:03 PM
    • #9
    • 9th May 18, 12:03 PM
    The name changes but the scam is the same
    https://www.mirror.co.uk/tech/bitcoin-scam-website-using-dragons-12350545
    https://www.actionfraud.police.uk/news/well-known-names-being-used-in-cryptocurrency-scams-apr18
    Last edited by Reaper; 09-05-2018 at 12:15 PM.
    • BinkyStottom
    • By BinkyStottom 9th May 18, 7:37 PM
    • 15 Posts
    • 9 Thanks
    BinkyStottom
    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...
    Last edited by BinkyStottom; 09-05-2018 at 7:46 PM.
    • DollarPincher
    • By DollarPincher 9th May 18, 8:25 PM
    • 8 Posts
    • 0 Thanks
    DollarPincher
    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!
    • grey gym sock
    • By grey gym sock 9th May 18, 8:53 PM
    • 4,441 Posts
    • 3,989 Thanks
    grey gym sock
    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
    • By Linton 9th May 18, 9:41 PM
    • 9,401 Posts
    • 9,537 Thanks
    Linton
    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!
    Originally posted by DollarPincher
    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
    • By msallen 9th May 18, 11:03 PM
    • 851 Posts
    • 935 Thanks
    msallen
    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...
    Originally posted by BinkyStottom
    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!
    Originally posted by DollarPincher
    ... and still the religious fervour continues amongst those who've drunk the cool-aid...
    • Reaper
    • By Reaper 10th May 18, 9:07 AM
    • 6,280 Posts
    • 4,529 Thanks
    Reaper
    (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.)
    Originally posted by grey gym sock
    lol, but I agree. I have approx 2% of my investments in crypto which seems about right to me given the risk.
    • Malthusian
    • By Malthusian 10th May 18, 9:34 AM
    • 4,314 Posts
    • 6,806 Thanks
    Malthusian
    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.
    Originally posted by BinkyStottom
    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
    by DollarPincher
    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
    • By BinkyStottom 10th May 18, 10:13 AM
    • 15 Posts
    • 9 Thanks
    BinkyStottom
    the same goes for tulip bulbs
    Originally posted by grey gym sock
    Can we stop with the Tulip comparisons? It really isn't even similar no matter how often it's thrown bout by news outlets.

    The trouble with holding multiple crypto currencies is that they are highly correlated - they rise and fall together
    Originally posted by Linton
    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.

    ... and still the religious fervour continues amongst those who've drunk the cool-aid...
    Originally posted by msallen
    How about you share your extensive knowledge of the subject with us? Then we can point out just how little you really know.
    • Malthusian
    • By Malthusian 10th May 18, 10:18 AM
    • 4,314 Posts
    • 6,806 Thanks
    Malthusian
    Can we stop with the Tulip comparisons? It really isn't even similar no matter how often it's thrown bout by news outlets.
    Originally posted by BinkyStottom

    No matter how often you say "This time it's different", it isn't.
    • BinkyStottom
    • By BinkyStottom 10th May 18, 10:31 AM
    • 15 Posts
    • 9 Thanks
    BinkyStottom
    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.

    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
    Originally posted by Malthusian
    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



    This would be outstandingly useful advice if Guy had access to a time machine
    Originally posted by Malthusian
    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.

    No matter how often you say "This time it's different", it isn't.
    Originally posted by Malthusian
    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.
    Last edited by BinkyStottom; 10-05-2018 at 10:34 AM.
    • BinkyStottom
    • By BinkyStottom 10th May 18, 10:40 AM
    • 15 Posts
    • 9 Thanks
    BinkyStottom
    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.
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