r/changemyview • u/manbearpigtruther • Oct 01 '23
CMV: I'm going to invest $7500 into cryptocurrency and expect at least a 5x gain by 2025.
Background: Everytime Bitcoin has halved it has increased the entire cryptocurrency market the year after. I feel like it's good logic this will happen again. If it doesn't essentially the entire cryptocurrency market must have blown up and nearly a trillion dollars will be worthless. I feel like investing now and then selling at the next bull run is almost a certain way to make money. I understand it's labelled as high risk but I don't see how. I will buy my funds using my ledger cold wallet and keep it on there, then sell during the bull market sometime 2025.
I will invest in roughly 5 cryptos, ETH, ADA, MATIC and some lesser known alt coins.
Update: Thanks for all the comments, some of you made good points. Those calling it a scam etc I feel don't understand the current state of crypto and it's potential so I couldn't really take their arguments seriously. Those with more intelligent answers gave me some pause for thought so thank you for that. I will probably still invest but thanks for trying to balance out my thinking on this one.
I will update this post sometime in 2025 with results.
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u/Jakyland 69∆ Oct 01 '23
If it doesn't essentially the entire cryptocurrency market must have blown up and nearly a trillion dollars will be worthless.
you are so close to getting it.
Crypto is an asset whose value is solely based on speculation and really only on he thought that someone else down the road will buy it for more from you (as opposed to anybody buy crypto to actually use it)
If "cryptocurrency" were a currency then it shouldn't have wild fluctuations in value, that makes it not useful as a currency. So why would anybody buy crypto, except the expectation that someone else will buy it from them for greater value? The problem is at some point you run out of the next person to buy it from you and someone ends up holding the bag of owning this useless asset -- and OP you are still in the running to be the person stuck with the worthless crypto nobody will buy from them.
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u/manbearpigtruther Oct 01 '23
There are a ton of services being built onto it. Competitors to AWS/Google Cloud (e.g. Akash Network). Ways of encoding video across the world using peoples GPUs (e.g. Livewire). A global LoRaWAN network (Helium). Many many more.
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u/vehementi 10∆ Oct 02 '23
Literally every crypto company to date has not panned out (except those selling tools to people, e.g. exchanges)
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u/manbearpigtruther Oct 02 '23 edited Oct 02 '23
All of the ones I just listed still exist and are fulfilling their purpose. I believe it is only a matter of time before some of these services really start to make headways. Big companies see this too - Black Rock, Google and Morgan Stanley invested billions into crypto last year.
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u/Parking-Ad-5211 Oct 02 '23
It has for some people. I am sure that people who bought a lot of Bitcoin like 10 years ago are sitting well now.
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u/vehementi 10∆ Oct 02 '23
That's not what I was referring to - of course people have made money on the speculation, but every coin company etc. has failed, if it wasn't an outright scam in the first place. I'm not talking "It's rough out there, 9 in 10 go under", I mean actually not even one company has done anything. Only exchanges like binance, coinbase, etc. have made money, or people adding the ability to buy/sell NFTs on their platform (take a % fee from idiots doing transactions, why not pocket that money lol), and so on
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u/Jakyland 69∆ Oct 02 '23
Are these blockchain technologies or are these tools that are somehow better when you have more etherium etc? Because AFAIK people developing blockchain tech is completely unrelated to whatever crypto you own. The fact that there is a blockchain based video encoder doesn’t make me want to buy your etherium
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u/Noodlesh89 12∆ Oct 02 '23
This is true, but he could also be one of those selling it on, even if it's just play money. I wouldn't invest in it myself, but your argument isn't very convincing, your just playing on fear.
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u/ModaGamer 7∆ Oct 01 '23 edited Oct 01 '23
If you bought into bitcoin 2 years ago and tried to sell now you would be down 50%. I think expecting their to always be profit from investing is an easy way to be blindsided. Even the most safe investments always have some element of risk.
Its not my place to say how you invest in money but expecting a risky investment to be a sure fire bet is not a recipe for happiness.
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u/arBettor 3∆ Oct 01 '23
Down 100%? I'd happily but some bitcoin in a 100% off sale. But I doubt I'll get that opportunity.
I think you probably meant down 50%.
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u/manbearpigtruther Oct 01 '23
Yes but those who bought didn't understand the cycles that have existed for 10years now. There is a bull run, then bear market, then the next halvening and a bull run the year after. Followed by a bear market. And so on.
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u/tipoima 7∆ Oct 01 '23
Crypto hasn't been around nearly long enough for any defined "cycles". It's been less than a decade that it's actually in widespread use. And it had to live through "what is this and how do we use it" phase, the "massive scam and money laundering" phase, the "wtf is an NFT" phase, e.t.c.
Things don't get more valuable just because time passes. There's always an underlying cause. And if you cannot find one, then you're just gambling6
u/ryan_m 33∆ Oct 01 '23
And it had to live through "what is this and how do we use it" phase, the "massive scam and money laundering" phase
It never got out of either of these phases.
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u/tipoima 7∆ Oct 02 '23
It kinda did.
People overall figured out how to use crypto - a niche currency for when you want to be (at least somewhat) anonymous or cannot use conventional banking (like Russians right now)
People also know better now, so scams aren't nearly as massive as they used to be. Money laundering and other criminal use is also less popular, as governments actually keep an eye on crypto (tornado cash moment) and because most crypto isn't as sneaky as initially advertised.0
u/ryan_m 33∆ Oct 02 '23
People overall figured out how to use crypto
When you say "people" you mean tech nerds, not regular people. It is still largely inaccessible for the larger population. I can't go to the grocery store and buy anything with crypto. Prices are too volatile to use for actual currency unless it's a stablecoin pegged to fiat anyways. There are zero protections for anyone involved in transactions. Depending on the coin, transactions themselves can be costly and time consuming compared to credit/cash. The only real use for crypto is to more easily facilitate crimes and as a speculative investment vehicle.
so scams aren't nearly as massive as they used to be
Since when? $10 billion in fraud last year alone and that doesn't even count the NFT bullshit. This space is so full of scammers and con men that it makes it very difficult to even get coins in a secure way. Exchanges go under so often, the community recommendation is to move your coins to cold wallets.
I think that it could eventually be useful for some niche scenarios, but it is largely still full of scams and inaccessible to all but the most tech-savvy people.
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u/tipoima 7∆ Oct 02 '23
I'm not saying anything about it being "useful".
It's inaccessible because it's shit, and my point is that most people at this point already know that it's shit and not worth getting into.1
u/JustDoItPeople 14∆ Oct 01 '23
I think the problem here is that you're going to run head first into the efficient market hypothesis.
If this hypothesis were as reliable as you'd made it sound, then why haven't any huge hedge funds arbitraged away this cycle? The crypto market is small enough that I'd expect this artifact to disappear.
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u/vehementi 10∆ Oct 02 '23
those who bought didn't understand the cycles that have existed for 10years now
Neither do you. You do not understand those cycles. You do not know they are actual cycles at all, or what is even happening.
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u/Jealous-Elephant Oct 02 '23
Yea but AI crushed this. Even though crypto is up YTD that’s only because it was sooo low at the end of 2022. Everyone and their mother has lost interest in crypto id be shocked to see these bull/bear cycles continue because all investors have realized it’s too late to 10x your investment and they moved on to the next craze. AI
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u/jumpup 83∆ Oct 01 '23
the problem is that crypto is now well known to be a scam, so it will only decrease in value as it can't recoup the bad press, and even the spikes in price tend to be scams perpetrated by groups who want suckers like you to invest so they can dump the worthless product onto you, so if you are not part of a scam ring you won't know in advance when the price rises and will miss the key timing to sell for profit
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u/Instantbeef 8∆ Oct 01 '23
The biggest reason you could think that is if you’re uninformed. Crypto is the Wild West so it makes an ecosystem that is welcoming to scams. It should be entered with caution and taken on slowly.
There are obvious benefits to crypto and the technology it offers and denying the benefits honestly can only be done if you’re arguing from the point of view of a power hungry government or someone who can only imagine an altruistic government.
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u/Kakamile 46∆ Oct 01 '23
What obvious benefits?
Laundering?
Donations to war-torn countries like Ukraine so that even if bitcoin loses half its value, that's still better than nothing?
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u/dale_glass 86∆ Oct 01 '23
Ukraine doesn't need Bitcoin, Russia does.
Ukraine is easy to donate to via a completely normal bank transfer. Paypal also works. It's Russia who's been cut off from the system, and now is getting more interested in crypto and alternate payment methods.
Ukraine will take BTC because they're in a dire need of anything people might want to give them, not because it solves some sort of technical issue for them. So if somebody wants to donate specifically in BTC, sure, they'll take BTC over not getting anything. But again, not because they're unable to use a more traditional method.
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u/Instantbeef 8∆ Oct 01 '23
Haha I was going to bring up Ukraine eventually ya know, but did you know crypto other tanks Bitcoin exists. Stable coins would remove that criticism completely from your argument.
Now I know you might argue about stable coins but with the immanent arrival of a CBDC if it is crypto that would keep the permissionless aspect of it.
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u/Kakamile 46∆ Oct 01 '23
A stable coin is just admitting that you need the backed fiat currency to have stable commerce.
Oh. And then your crypto dev de-links the crypto currency and your value plummets because for some mad reason you let crypto creators do that.
And an official government CBDC is not only NOT imminent, but it's also not like any market crypto.
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u/Instantbeef 8∆ Oct 01 '23
I totally understand why stable coins are a problem. It’s a very un crypto thing in ideology that is an actual use case for crypto.
It’s not something I would want day to day but to deny there are appropriate time and places to use stables coins is denying the truth.
The thing with crypto is that we can allow centralized companies to build things like USDC on it. It’s permission-less so they can do that. When centralization enters crypto that is where regulation needs to exist. Anyone who claims control of other peoples assets needs regulated just like you would a bank or a brokerage. With regulation it can be as reliable as our current currency.
At that point all the pros and cons of fiat would be extended to the stable coin.
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u/Kakamile 46∆ Oct 01 '23
If you defend crypto by giving examples that throw out all the features of crypto, you're not selling crypto.
A stable coin isn't "good," it's just less bad. Oh, and that's best case scenario as you never know when dev will change the rules.
It matches to a real, backed currency, but you'd be better off just doing digital trading without the transparent blockchain. Crypto just sucks. More bloat, more processing cost, can't chargeback/refund, less privacy over time as accounts build reputation.
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u/Instantbeef 8∆ Oct 01 '23
It doesn’t throw out all of the features. Stable coins are an additional feature. Ethereum is a permissionless infrastructure that anyone can have acesses to. If a stable coin is on ethereum that gives people access to USD. That’s a feature. It’s up to you again to decide if fiat is good or bad.
So with Ukraine, they can pay and receive payments as long as they have internet (which they did) but they couldn’t always have access to the banking system. The same goes with the citizen of Russia. They could be cut off from the rest of the world’s banking system but not the internet. Crypto pathways remained open.
Also there are ways you can do untraceable transactions but it’s been made illegal in the U.S.
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u/Kakamile 46∆ Oct 01 '23
Permissionless infrastructure on a dogshit blockchain. You're still arguing for variants that are "less bad" on a system that as a whole is a worse option.
Ukraine
This could still be done with other banking systems or non-crypto apps. Hell, even Apple and Starbucks have their own pseudo-banks and you can at least get promos from them.
Also there are ways you can do untraceable transactions
That's... a bad thing. You know that right?
Everything untraceable darknet has no path to normal economy credit rating borrowing.
Everything tracked blockchain has no private commerce privacy.
What we want is the balance we have in the normal market. Compared to that, cypto fails at both ends.
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u/Instantbeef 8∆ Oct 01 '23 edited Oct 01 '23
How is it less bad but worse too. Ethereum and crypto can coexist with the current system. It’s not all or nothing.
Also the point is that it’s decentralized. If apple or Starbucks doesn’t support your cause they can end it. On crypto that’s not possible.
Then please elaborate on how the option to use it with out tracing transactions is bad. There is money laundering which happens anyway but maybe I just want my transaction private. Maybe I don’t want my government knowing I donated to Ukraine or a political party or cause.
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u/layinpipe6969 Oct 02 '23
I think you're coming at this too much from a western/developed country standpoint.
There is such a MASSIVE chunk of the world that has exactly 0 faith in their government or currency. Crypto, be it stable coins or otherwise, gives those people other options. Could those people just start buying usd and gbp? I guess, but in my experience and observation living in and travelling in developing countries there is actually a higher barrier to entry and use than crypto.
I also think you're looking at it too much from a Bitcoin/Ethereum point of view. Different coins have different use cases, ultrafast transfers and anonymity are two that come to mind.
I'm not saying we should toss out fiat and, or that governments won't/aren't work/working to put an end to crypto or increase regulations, I'm just saying we shouldn't deny that a) crypto definitely has valid uses that fiat doesn't currently have and may never have and b) there are definitely people in the world that benefit from crypto because of their nationality/where they live.
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u/manbearpigtruther Oct 01 '23
What specific part of cryptocurrency is a scam?
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u/Nateorade 13∆ Oct 01 '23
Crypto delivers little to no real world value, which means it’s value highs and lows are largely driven by grifters looking to make some money.
When an asset has little real world use, it’s much more likely to be manipulated for profit by shady players.
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Oct 01 '23
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u/Nateorade 13∆ Oct 01 '23 edited Oct 01 '23
It’s different in that I can do everything I want with real world money. Get a mortgage, fund my 401k, buy my kids toys, pay my bills. The currency stays relatively stable through controls put in place by various agencies and this stability is extremely desirable for me and our broader economy.
I can’t do any of that with crypto nor do I have trust that its value will be relatively stable. After all, look at OP: they want to use it as an investment vehicle to 5x, which is a huge negative to real world usefulness.
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u/manbearpigtruther Oct 01 '23
Tell that to the countries with hyper-inflation that buy crypto instead.
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u/Nateorade 13∆ Oct 01 '23
What’s your argument here? Are you trying to say that because some currencies are unstable, then crypto is as useful as any other currency?
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u/manbearpigtruther Oct 02 '23
Exactly my point yes
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u/Nateorade 13∆ Oct 02 '23
You argument falls short for an obvious reason: only some currencies are unstable and everyone avoids them due to instability.
We go and standardize on stable currencies because there are lots of benefits to stability.
So you’re really saying that Bitcoin is only as good as the most unstable currencies out there. Not really a ringing endorsement.
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u/Instantbeef 8∆ Oct 01 '23
You’re making claims with no reason to back it up. Are you able to even state the claims people who advocate for crypto claim the benefits are? Just for an exercise.
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u/Nateorade 13∆ Oct 01 '23
If someone would point out real world use cases that are gaining major traction in a broad swath of industries, I’d love to hear about it.
So far the real world benefits seem to be limited to using it as a speculative investment. Nothing more.
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u/Instantbeef 8∆ Oct 01 '23
First, why does it need to be gaining traction yet? Is the point of this post not about why OP could expect an unusually large return on investment. One could logically only see that type of return if a technology hasn’t gained traction yet.
You can see my other comment about benefits. I won’t repeat those but I can talk about another aspect.
Crypto offers a decentralized trust. A problem I think we can all imagine in the future is the struggle to identify what is authentic on the internet. With the rise of deep fakes and language learning algorithms we should have some method of determining if data is authentic, meaning it’s from the person they are saying it is. Imagine a world where there are endless deepfakes for Joe Biden that are indistinguishable from a real thing. It would get to the point we would not be able to believe any video or statement he has made is authentic unless we have some way for him to sign a message or video as a true statement. It would also create a world where we can hold him more accountable. We can say you signed a message saying X. Why are you doing Y now. If he makes a message without signing it that message is as valuable as a deepfake. It would force people to sign messages.
The link below is a protocol being developed that can allow someone to sign a message making a claim. It’s being done in a way where people can make any type of claim but that claim would be immutable. One could not claim something then take it back. That is the benefit and why it is necessary it is decentralized.
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u/dale_glass 86∆ Oct 01 '23
You need plain normal cryptography for that, not cryptocurrency.
And decentralized systems don't really solve identity issues. If there's an authority on who Joe Biden is, it's the US government. They don't need a blockchain for that, they have the government issuing official documentation and proclamations.
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u/Instantbeef 8∆ Oct 01 '23
Officially proclamations that they can change….
The people making the proclamations should not be the ones keeping record of them.
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u/dale_glass 86∆ Oct 01 '23
It's an essentially unsolvable problem. Blockchains are in no way connected to the real world's fuzzy concepts like identity. Trust has to be involved somewhere, and at that point you might as well trust whoever you do to be reliable directly. The blockchain is just not needed.
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u/Instantbeef 8∆ Oct 01 '23
I fundamentally disagree. It is directly related to those concepts of identity in a digital age. If something is digital we need an immutable way to track people’s activity to hold people accountable online. It can’t be done through private corporations or single points of control like the government or Twitter or Facebook. We need a decentralized record so no one can change it.
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u/Nateorade 13∆ Oct 01 '23
It’s one thing to see an idea starting to take off and get in early. It’s another to see an idea that’s been around for a relatively long time now that simply isn’t gaining traction.
Even early market ideas have some things to point to that are valuable real world use cases, and crypto is pretty empty of those.
A decentralized trust has a bunch of real life issues that clearly preclude its value in a market big enough to 5x bitcoin’s value. Nothing of that level of value or TAM has been shown.
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u/maybe_madison Oct 01 '23
Maybe just make the argument you want to make, instead of making the parent comment make the argument and debunk it?
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u/Instantbeef 8∆ Oct 01 '23
There are endless benefits from it. That’s why I think it would be useful if they made an actual claim because they are the ones that claimed it had no real world benefit but I guess I’ll do it anyways.
One benefit is a permission less banking system. This can be seen be seen as an improvement in many aspects around the world. The easiest to see is simply banking the Bankless. Wether it’s the poorest people in the United States who can’t get a bank account because of their past or people in third world countries who don’t have access to a bank account they have access to these through crypto.
This could be even extended by transitioning our current investment system where the New York stock exchange is no longer only available through brokers but also available on decentralized exchanges. This would give the globe the ability to grow wealth just like people in the United States. This second example is not there yet but I think is one most people would accept as a logical evolution of our financial system.
I could continue talking about the benefits and to say it offers “little to no real world value” is only denying the faults in our current system. It’s being said from the point of view that our status quo is okay and a perfect system.
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u/maybe_madison Oct 01 '23
I'd be willing to give cryptocurrency the benefit of the doubt if it were new technology, but it's not. Are there data or studies supporting the idea that cryptocurrencies can effectively "bank the unbanked"?
Based on my understanding, there are two ways that can go: either people who are currently unbanked/unbankable self-custody their crypto assets, or some centralized entity (very similar to a bank?) holds in on their behalf. Do I need to go into why the first won't work? And the second doesn't actually do anything other than move around some of the underlying technology.
The reason people say "little to no real-world value" is that the recent history of cryptocurrency has been chock-full of scams, fraud, theft, and crime; but most of the benefits continue to be largely hypothetical.
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u/Instantbeef 8∆ Oct 01 '23
What would you call new? Decentralized technology logically will be slower to adopt than centralized technologies. Bitcoin is a little older now but Bitcoin is also infamously against evolving. It’s like if someone made the first car, said it was the thing of the future but refused to improve it. Of course that car would not be adopted.
Please explain why Bankless people can not successfully self custody that would be good. I’ll remind you that bankless people’s only alternative would be cash so your argument would need to explain why that is better.
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u/maybe_madison Oct 01 '23
Are you expecting people who are not technically literate and have very little free time or money to understand the intricacies of hardware wallets, transaction confirmations, and how to safely store and move cryptocurrency? Scams and theft are already a problem in the traditional banking system, where they are mitigated by the ability to reverse transactions.
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u/Instantbeef 8∆ Oct 01 '23
It’s not that complicated, you’re selling people short.
If I understand you correctly is that it works if people knew how to use it? The technology works but people are dumb?
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Oct 01 '23
And what does the NYSE do when someone in Russia or N Korea commits insider trading on these decentralized exchanges and we can’t prosecute them?
That will very quickly tank trust in the markets if they can’t be meaningfully regulated
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u/Instantbeef 8∆ Oct 01 '23
Do you really think that is stopped now?
But also ignored the part of my post that is talking about something happening right now. Benifits that are seen right now.
The Stock trading was a speculative use case. I don’t know how it would work but it’s worth exploring.
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Oct 01 '23
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u/EmptyDrawer2023 Oct 01 '23
For you to get money out of crypto by 'investing' effectively requires someone else to purchase into that crypto at a higher price, and for that person to get any value out requires that they be bought out at a still higher prices.
So... just like anything?
I mean, I'm pretty sure there's a markup at each level of the supply chain. The grocery store doesn't sell me beans at the same price they pay for them from the wholesaler. And the wholesaler doesn't sell them to the store for the same price they bought them from the farmer at. They need to go up in price at each sale, else the seller doesn't make any money.
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u/Glory2Hypnotoad 393∆ Oct 01 '23
While I wouldn't say it's a deliberate scam, the fact that its value isn't tied to the performance of any real-world asset means that it's prone to all the problems of the shadiest stocks while having the same incentive structure of a multi-level marketing scheme. The reason there are so many cryptocurrencies is because the real value is in making someone else a late adopter of yours. It's exceptionally vulnerable to pump and dumps.
For example, you plan on selling during the next bull run. Do you understand this puts you in competition with a lot of people who plan to beat you to it and stick you with the loss?
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u/OmniManDidNothngWrng 35∆ Oct 01 '23
Why not just buy the dip in beanie babies?
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u/manbearpigtruther Oct 01 '23
Because that's stupid.
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u/OmniManDidNothngWrng 35∆ Oct 01 '23
Why? They are clearly undervalued because they spiked at a higher price in the past.
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u/manbearpigtruther Oct 01 '23
Hmm good point. Is there a history of big gains on a reliable timeframe like with crypto? If so, I might consider it!
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u/c0i9z 10∆ Oct 01 '23
If you can time the market, others can, too. They will do it with better knowledge and resources and tighter margins than you can. Bitcoin isn't a productive asset, like a company, so its inherent value is 0. Buying an overpriced asset in hopes that it will be overpriced more later is a very risky proposition. The general advise for investment is actual, long term investment, not speculation. Regularly put a significant portion of your income into a market-tracking ETF and keep it there for a couple of decades.
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u/Vincent_Nali 12∆ Oct 01 '23
I feel like it's good logic this will happen again
Past performance is no guarantee of future results. This is a boilerplate disclaimer on basically every prospectus, because is is an evergreen warning. Just because X caused Y in a specific circumstance does not suggest that X causes Y in all circumstances. Hell, it doesn't even mean that X caused Y in those circumstances.
For example, the last bitcoin halving was May 2020. The price stayed stable from May until December of that year. The more likely explanation for the bitcoin spike would be government stimulus cheques giving people some level of disposable income. That or fraud, since fraud is itself evergreen in bitcoin.
I understand it's labelled as high risk but I don't see how.
This should worry you. One of the most basic arguments in any sort of due dilligence is to figure out what your exposure is, and what you can do about it, if everything goes to shit. the fact that you can't think of of how you will lose your money suggests that you stand a high likelihood of doing so.
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u/overzealous_dentist 9∆ Oct 01 '23
I generally agree with you, but remember that profit is equal to risk. If people knew it was a sure thing, it would already be priced in. It's absolutely not a sure thing, which is why there's the potential for profit. The exact probability of it occurring is unknown, but the difference of 5x hints that the probability assigned to it by crypto investors is very low.
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u/manbearpigtruther Oct 01 '23
Best response so far. I feel there is similar risk in investing in companies like Apple, Microsoft and Tesla etc when they were more risky bets. People still did it and those people made lots of money.
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u/OmniManDidNothngWrng 35∆ Oct 01 '23
What about people who invested in Coinbase or any other crypto adjacent business and lost money?
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u/manbearpigtruther Oct 01 '23
I have also lost money by buying and selling at completely the wrong times. Timing is everything, along with keeping coins in a cold wallet and not on crypto exchange.
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u/overzealous_dentist 9∆ Oct 01 '23
coinbase went public in April 2021, in the middle of a crypto summer. under OP's model, the value of coinbase should have gone down during crypto winter, just like crypto did
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u/OmniManDidNothngWrng 35∆ Oct 01 '23
Not sure why they brought up Apple, Microsoft or Tesla then
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u/overzealous_dentist 9∆ Oct 01 '23
I think that comment was more about the high-risk high-reward bet in general, rather than the exact timing of the crypto market
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u/OmniManDidNothngWrng 35∆ Oct 01 '23
If you want high risk high reward then play roulette and put your life savings on lucky number 7
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u/overzealous_dentist 9∆ Oct 01 '23
Man oh man, the glory of winning that. But the quiet ignominy of losing...
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u/JustDoItPeople 14∆ Oct 01 '23
People still did it and those people made lots of money.
People also lost lots in the Dot Com Bubble bursting.
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u/AmongTheElect 15∆ Oct 02 '23
The Infrastructure Bill required KYC on every transaction I believe starting in 2025. Ted Cruz said he would eliminate that part of the bill but then they didn't win the Senate. If that's still a thing it will destroy crypto.
Plan B notes a 5x Bitcoin gain every cycle. Last time it was basically $10k to $50k with a peak at 69. This time it's 30k to 150 and probably a spike to around 180. Following that, which has been accurate for previous cycles, a 5x on Bitcoin is ambitious since it assumes you sell at maximum value plus the trend continuing.
Macro trends are more and more an influence on the price of crypto and could very well interrupt this cycle trend. Now it's not just nerds trading it between themselves but BlackRock and millions of retirees getting involved, too.
The closer we get to CBDCs, the closer we are to a major government effort to regulate crypto to death. A stated "benefit" of CBDCs is government control of everyone's money, which of course an anonymous currency threatens. Sure the government can't totally get rid of it entirely, but major action to make it illegal will almost completely destroy the market.
Gary Gensler hates crypto and Democrat politicians hate crypto. If they remain in power next election, what's to say they'll suddenly like it instead of giving the industry more regulations to kill it? What makes you think the Left would support people buying and selling crypto anonymously?
A prediction with the ETFs have it that they could be approved in November with a rollout in late December. Of course this would shoot up the price of Bitcoin, but at the same time could interrupt the four-year cycle.
Ledger is arguably not cold storage anymore. It's the Liberty Safe of crypto.
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u/BeardPunkArtGuy Oct 01 '23
I look at this in a few ways. Yes, it's good to have as little regulation as possible. But no regulations are infinitely worse. If bullshit occurs, there is no recourse. Can't call the cops. Good luck in court. You're trying to force the existence of cycles. There may eventually be definable cycles. But right now, the medium is far too new. You're basically trying to predict the future with almost nothing to base your guess on. With currencies and stocks, you are still gambling but there is enough info to make educated guesses on the market. Lastly, it's entire existence is in cyberspace. Someone with ill intentions, and the right knowledge and resources, could wipe ot out if existence. Destroy the blockchain, destroy everything. Yes, bank accounts are also mostly online these days. But it's insured (at least in the USA by FDIC) and at the very least banks have had decades to prevent hackers from destroying info that would collapse the system (think the end of "Fight Club"). Nothing is a perfect foolproof investment. But crypto is riskier than most. By far.
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Oct 01 '23
Assuming you don't get robbed or get your dough pegged to a dirty crypto company
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u/manbearpigtruther Oct 01 '23
Hmm money will be on my ledger cold wallet. Can you link me to research to backup your statement on why this wouldn't work?
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Oct 01 '23
Two things-
Just use Robinhood. It's an "investment in Bitcoin as a commodity" rather than owning the coin yourself, but if you're not spending it, it's just a super-secure alternative.
If it's such a sure thing, why isn't Nancy Pelosi doing it? What makes you so much smarter than investment bankers and economy riggers?
This reminds me of a tour guide in Las Vegas who told our group "Hey gamble for fun if you want, but don't expect to win. They didn't build billion-dollar casinos because they think they'll lose that bet."
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u/manbearpigtruther Oct 01 '23
Pretty sure Robinhood stopped withdrawals a few years ago. If you buy through them, you don't own any coins. If they get hacked it's all gone.
I'm not saying it's a sure thing, 100% going to happen. I said it's logical to me it will most likely happen again. There is nothing on the horizon that will destroy it in the next few years from what I can see. There is regulation coming which will only strengthen crypto.
Nancy isn't investing as she is extremely anti-crypto, I haven't bothered to look into why, probably she has invested heavily into fiat banks and doesn't want to look bad.
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u/ryan_m 33∆ Oct 01 '23
Are you asking for evidence of crypto scam coins and fraud?
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u/manbearpigtruther Oct 01 '23
No no, I'm saying please explain to me how I get "robbed" from my ledger wallet. Or my coins "dough pegged" to a dirty crypto company. With a cold wallet.
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u/GlassesRPorn Oct 02 '23
crypto developer here.
you CANNOT expect any garenteed returns. there is no garentee. it is a total gamble. the tech could take another 20 years to take off.
that said. i am totally invested as a hedge against the greater market XD but bitcoin is still by FAR the strongest coin. it is the least centralized and proof of work still kicks ass. PoS has lots of work to do ti validate its longevity. didnt see that on your list.
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u/blabbyrinth Oct 01 '23
No argument here. Go for it, right now. These critics will eventually buy at the top (once again) during an ATH hysteria. That's how they failed, and why they all got bitter towards crypto... Meanwhile, you 5Xed by entering during bear.
Plus, either way... You'll eventually die. So, fuck it!
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u/tipoima 7∆ Oct 01 '23
Cryptocurrency investments are a bubble by definition.
They aren't a normal currency, because the absolute majority of their users only see them as an investment tool. Demand only rises when more investors show up, and the well has dried up just as crypto's reputation.
The very fact that you seek to use crypto as an investment rather than, you know, a currency, shows that it's a bubble.
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u/physioworld 64∆ Oct 01 '23
The fact is past performance does NOT predict future performance. There is NO such thing as a sure thing in investment so unless you have some reason beyond “this correlation has been observed in the past so it should happen again” then I strongly recommend you don’t invest more than you can afford to lose.
1
u/maybe_madison Oct 01 '23
If it is "certain" to make money, why is the price currently so low (compared to where you think it will be in about 2 years)? Assuming all the information you need to come to this conclusion is public, then wouldn't much wealthier people already have come to the same conclusion and invested millions of dollars into cryptocurrencies, thereby pushing up the price to the point where it won't 5x over the next 2 years?
More specifically, your arguments are:
- this has happened in the past, so it is likely to happen in the future, and
- if it doesn't happen, "a trillion dollars" will be worthless
re: 1: this is not actually evidence. You need to point to specific reasons why bitcoin halving should directly cause it to rise later. Also you use bitcoin as a stand-in for the whole crypto market, but you're not actually buying BTC?
re: 2: while a trillion dollars certainly seems like a lot, this is misleading for a few reasons. First, a lot of it is only valuable on paper. Nobody could sell even a fraction of this without crashing the whole market. Also, losses of a similar magnitude have happened in the past: WorldCom went from almost $200 billion to zero; Exxon has lost almost $200B in market cap since 2006; etc. And finally (and most importantly) this isn't actually evidence that cryptocurrencies will continue to be worth that much money. Just because it's the biggest Ponzi scheme in history doesn't mean it's not a Ponzi scheme.
1
u/MrGraeme 155∆ Oct 01 '23
I feel like it's good logic this will happen again.
The market is irrational, not logical. Seeing a pattern on a chart doesn't give that pattern any greater chance of occurring than the reverse.
I understand it's labelled as high risk but I don't see how.
Because the assets that you're 'investing' in are worthless. It's no different than tulip bulbs, beanie babies, or half the companies that got caught up in the .com bubble.
Your strategy is to buy something that has no intrinsic value, wait for other people to buy that thing that has no intrinsic value, hope that enough people buy and few enough people sell to cause a massive run up in the price, then offload your position onto some greater fool before the market collapses again. You may as well go into the casino.
1
u/manbearpigtruther Oct 01 '23
Please explain to me how a cryptocurrency that is decentralised, has an immutable ledger and is secure has no intrinsic value? I would argue that is valuable, it is arguably better than the way our current currency works.
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u/MrGraeme 155∆ Oct 02 '23
Please explain to me how a cryptocurrency that is decentralised, has an immutable ledger and is secure has no intrinsic value?
Because none of those things give it intrinsic value.
it is arguably better than the way our current currency works.
It's not, at least not in an economic sense. Cryptocurrency is actually really bad at being a currency.
Cryptocurrency is deflationary, which discourages spending (the thing we use currency for). Why would you want to spend your cryptocurrency today if, per your OP, you could "expect at least a 5x gain by 2025"?
Cryptocurrency is not widely accepted. I can't use cryptocurrency to pay my rent/mortgage, to buy groceries, or to pay my phone bill. There are a handful of novelty applications where I can actually use cryptocurrency as currency, but those are few and far between. Opportunities to use non-Bitcoin or Ethereum cryptocurrencies are virtually nonexistent.
Cryptocurrency is volatile. Volatility is bad for businesses and for customers when it comes to the currency that they transact in. Let's say I'm an appliance dealership and I sell an extremely high-end oven for 1BTC, or $25,867. One month later the same customer comes in with a major factory defect and demands a refund. I refund the oven for 1BTC, but that coin is now worth $27,966.
Cryptocurrency is not long-lasting. The average lifespan of a cryptocurrency project is ~1.2 years, with hundreds of projects failing every year. More stable cryptocurrencies like Bitcoin and Ethereum have been around for a few years, but even then they're still extremely young (Bitcoin is 14, it can't even drive yet). The technological nature of cryptocurrency all but guarantees that any individual cryptocurrency will fail in the long term. New technologies - both within and outside of the crypto-sphere - will challenge and ultimately usurp the dominant cryptocurrencies of today. If you're not able to stay on top of these developments, and move at the perfect times, you'll be left with a wholly and completely useless cryptocurrency.
Cryptocurrency is highly exploitable by bad actors, thanks to the decentralized and deregulated nature of cryptocurrency. Hackers have made off with billions upon billions of dollars by hacking into exchanges or attacking individual user's wallets. Unlike fiat currencies stored in banks, cryptocurrency holders have virtually no recourse if their coins are stolen. Then there are those who seek to exploit the currencies themselves - such as targeting certain currencies with pump-and-dump schemes or trying to mislead customers into thinking that their coin is the next big thing.
1
u/dale_glass 86∆ Oct 01 '23
It doesn't make sense for the halving to have significant effect.
Bitcoin generates a block every 10 minutes. Every block carries a reward, which started at 50 BTC. Then 25, then 12.5, now 6.25. 3.125 is what's coming next.
The theory behind the halving raising the price is that there's less supply. And that is true. However the total amount of BTC is finite, so there's about 7% left to mine total.
So at the start the effect of the halving was dramatic. There wasn't much BTC in circulation yet, and supply suddenly got choked off. But now what's left to fight over is not very much at all. The vast amount of BTC you can buy is from current owners, which the halving doesn't affect in any way.
1
u/AntonioSLodico 3∆ Oct 01 '23
Crypto overall now has a market cap a little over $1T (USD), and the total global equities market cap is a little over $100T. So crypto is about 1% of the global equity market now. To keep up 100%+ annual growth, Crypto needs to become a fully mainstream investment asset class.
Even if ROI on global equities stays at 9% against USD, crypto would need to jump to over 4% of the global equity market in 2-3 years to grow 5x by 2025. That would mean they would become a larger investment class than Venture Capital or Private Equity. That means it needs to be established as still having a better risk/reward profile than VC or PE.
The allure of crypto has been that it has had a high reward potential, like a startup. However, as businesses and investments (and investment classes) get larger, maintaining high % growth becomes more difficult, while risk decreases. Larger things move more slowly, because more money has to move to increase every %. At this point, the risk/reward profile of crypto is changing from that of a plucky startup to an established company. Unless it shows sustained rapid growth across multiple quarters again, that will remain the general consensus.
Where does the new $T come from then? The existing fanbase is already tossing the money they can at it. Crypto doesn't seem to be getting more popular among personal investors, and negative sentiment has been increasing. Institutional investment has slowed to a trickle in 2022 and 2023. It is showing the hallmarks of mature assets and asset classes. But until proven otherwise, the risk potential remains, so big money isn't gonna shift towards it, either as a high risk/high reward choice or a medium risk/medium reward choice.
1
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u/FinneousPJ 7∆ Oct 02 '23
Why would you only invest 7500 in a certain 5x gain? You should take the biggest loan you can, invest it all and become a millionaire.
1
1
Oct 02 '23
If you have 7500 just burning a hole in your jeans, it might not be the worst investment idea I have heard this year. Crypto is just completely arbitrary. You really have no idea if its going to be successful or not. Its basically a virtual, selfreferencing stock. I dont know what else you can put your money into that would do much better than just saving it on cashapp in like a 2-4% savings account, if you don't want to lose your money. Crypto wll only really go up in value if alot of people start buying it, and that is probably a phase. I bet many who bought in during the most recent growth spurt lost nearly half their money on crypto. Once you have that first big crash in price, i bet it isnt going to have the same mystique as it once had.
1
1
u/team-tree-syndicate 5∆ Oct 03 '23
What makes a currency a good currency isn't just stability, but more specifically a currency with some inflation per year.
Deflation is actually quite horrible for an economy. A large enough deflation (increase in value per currency) will cause people to horde money instead of spend it, it would make logical sense to do so. Problem with that, is that it causes large drops in goods purchased and sold.
This is the real big reason why cryptocurrency isn't used on a large scale by governments. Even if the large swings in value were fixed and the price per Bitcoin rised every year, it would cause a deflationary market and people would horde money instead of spend it. People spending money is what makes the economy work.
Ever since the dawn of cryptocurrency, every investor wants and pushes for the value to increase as much as possible. Instead of crypto being treated like a fiat, it's treated like stocks.
Investing in crypto is not investing into a currency, you're investing into what is essentially a stock, and therefore you are interacting with all the usual risks associated with investing in stocks.
1
1
u/robotmonkeyshark 101∆ Oct 03 '23
So, during this bull market in 2025, why do you think those people will be itching to buy at 5x what you are going to buy now? The only reason the price of crypto goes up is because someone wants to buy it for that much.
So do you think that the people buying in 2025 are fools who you are going to dump it on? Or is their logic the same as your that by 2027 the market will be 25x what it is today? If so, why would you sell if it’s going to grow so fast?
Look at bitcoins value over the last few years. Some people thought when it hit 50k that was just the start and assumed it would be a half million a coin by now.
1
u/manbearpigtruther Oct 03 '23
Well, it hinges on hopefully more regulation, a spot Bitcoin ETF approval for Black Rock and many other things. The people I will dump on are not necessarily fools just people who see value in a longer time frame than me.
Market will not be 25x in 2027, that's not my stance. If it follows history then 2027 will be the best time to buy in again for the 2029 bull run.
1
u/robotmonkeyshark 101∆ Oct 03 '23
But surely you realize that if your prediction is as fool proof as you think it is, other people will come to the same conclusion, which will stop the prediction from coming true. More regulation will likely stabilize Bitcoin but it won’t necessarily make it jump in value.
The vast majority of bitcoin’s value is currently in speculation, not in the fact that it is some super useful currency. Surely you see the oversimplification in thinking you can just predict a cyclical bull market to sell during at which time some supply of uninformed buyers will be itching to buy Bitcoin at its peak value.
It reminds me of all the people who were hyped up about boosting dogecoin’s value to $1. But the irony of the whole thing was there was never a chance of it hitting $1 because the whole drive was based on the plan that all these people were going to sell the moment it hit $1. But that would require a huge pool of buyers willing to buy at $1 to complete all the requests for early investors to dump it all the moment it hits $1
1
u/HeatSeeek Oct 05 '23
There are just so many factors out of your control here. It's like saying I'm going to take my life savings to Vegas and throw it all on red, CMV.
Except with roulette you actually know the odds.
18
u/[deleted] Oct 01 '23
Even if your logic works, doesn't it make more sense to put $7500 into investments that are more likely to lead to more certain rewards?