I hope you are right!
In a portfolio, I think that at least 1% in Bitcoin is very important and makes sense. For a small amount of your capital, you have 'insurance' stored in what is hopefully a non-correlated asset to traditional financial markets.
Yeah they generate paper money, but their plan is to turn that paper money back into real assets as fast as the can sensible do so, and they are real assets inside Berkshire, where as there is nothing inside Bitcoin.A huge conglomerate of businesses generating paper money they promise you will never see.
Trust us bro, we can all get rich togetheras long as we denominate at in $USD(-34 Trillion)
Good to be back VC
Rare coins, art, sneakers don't generate a return. They hold value due to scarcity.No, in investments you look to the asset it’s self to generate a return, you don't have to rely on some one else buying it from you at a higher price to make your return.
if you are relying on price action to make your return, that’s speculation not investment.
for example, let’s say you bought a dozen large farms and leased them to tenant farmers, and each year you earned lease payments from them. Your family could go generations without selling that asset and living off the income, that’s an investment, you might never ever check the price of the land. that’s what I mean by looking to the asset to make your return.
you can’t live off bitcoins like that.
but if you buy the farms hoping they go up next week that’s speculation not investment.
Now of course one day you might hope to sell the farms and make a capital gain, due to the value of the farm rising over time, but that’s still an investment, because it’s a productive asset.
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1. Why will there be increasing demand over time?
2. How is it basic economics?
jog on
duc
Yeah, so a rare coin is sort of a hybrid between a regular coin that its worth is face value, and a baseball card that has some sort of additional value to collectors, provided there is enough interested collectors you might be able to sell it one day at a higher price than its face value.Rare coins, art, sneakers don't generate a return. They hold value due to scarcity.
I've seen "investment" thrown around these instruments. Invest in gold/silver is another one. I suppose you do hold something physical with these though.
Like most speculation there is the possibility of huge profits, eg betting on horses, the lotto, roulette.Lets face it....
Bitcoin is the greatest opportunity to make money. It's a hell of a lot better to trade than stocks.
While I flinch at the word "invest" when it's used with crypto. You can't argue with the returns.
I seem to remember everyone talking of it's demise not that long ago.
Yeah, but Bitcoin could also fall out of fashion and go to zero, and who is going to hold on to their ETF’s as they see the price falling.I would have thought the Bitcoin ETFs would lead to constant inflows over time. And the supply is fixed at 21 million BTC. So, with supply being held constant, and demand going up into the future - this would leads to price to respond upwards.
Please correct me if I have the wrong idea!
1. I would have thought the Bitcoin ETFs would lead to constant inflows over time.
2. And the supply is fixed at 21 million BTC. So, with supply being held constant,
3. and demand going up into the future - this would leads to price to respond upwards.
Please correct me if I have the wrong idea!
I'd argue the only value you need in any asset is enough numbers of people throwing their money at it. Well that and a bunch of hype.Yeah, so a rare coin is sort of a hybrid between a regular coin that its worth is face value, and a baseball card that has some sort of additional value to collectors, provided there is enough interested collectors you might be able to sell it one day at a higher price than its face value.
But I wouldn’t call that investing, I would call the value above its face value a “speculative value”, not an “investment value”
So a coin can be valued in 3 ways.
1, its weight in metals
2, its current face value
3, it’s speculative collector value.
these are three different values, some more real than others, and the values can fluctuate according to different drivers
Yeah, but hype for collectables like Bitcoin can fade, it’s nice to know what the other underlying causes that give the item value are.I'd argue the only value you need in any asset is enough numbers of people throwing their money at it. Well that and a bunch of hype.
That's why I don't believe in the "gambling theory" for most of these types of instruments anymore. Roulette wheel doesn't equate. Now you have the numbers from social media hype bumping your win up in a pretty safe way. It's all "greater fool theory" and has been for the last decade.
Even stocks weren't safe look at game stop.
I suppose it's just trend trading. I agree that the attention can fade. I mean look at the signature collectors, antiques, etc.Yeah, but hype for collectables like Bitcoin can fade, it’s nice to know what the other underlying causes that give the item value are.
for example Gold can become a speculative bubble every so often, but we know that even if the speculative bubble fades there is other sources of demand that prop up its price, for example worst case scenario gold should never drop below the value of copper because it’s superior to copper for many industrial purposes, and it also has demand for jewellery etc.
But if the collectable/speculative hype of Bitcoin fades, what else can prop up its price? It could go to zero, that’s not out of the question.
but as I said if you enjoy speculating on crypto, go for it.
Yep, but one factor that I think will burn peoples attention span faster is that as people lose money, they will eventually lose interest.I suppose it's just trend trading. I agree that the attention can fade. I mean look at the signature collectors, antiques, etc.
They can fade because of tech advances. The collectable is niche and the demographic that collects it dies out. Or it goes out of fashion.
Opposite end is which collectable gets the most eyes on, coupled with the age of those collecting and then working out if they have yet to hit peak earnings and the rough longevity.
I think crypto is young in one sense, but the half life of these commodities has shortened dramatically. I don't think I see it hanging around for decades.
But then again, lots of people get playing the pokies, even though they steadily lose money, Humans are weird hahaha.Yep, but one factor that I think will burn peoples attention span faster is that as people lose money, they will eventually lose interest.
Now, this is a problem for crypto, because it generates no return itself that it can throw off to keep people interested. So every dollar that some one takes out of crypto as a profit is coming at the loss of some one else, and the fees earned by miners and the people running the new ETF's adds to this losses that must be absorbed by the market.
How long can the average market participant stay interested and keep pumping their savings into the system, when the market average return of the system is negative?
For every winner you have a loser in crypto, plus the system is draining dollars to fund the middle men and even just electricity.
This is not the same as shares and other investments, because they aren't a zero sum game due to the earnings they throw off, which make the market average return positive over time.
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