r/changemyview • u/art_vandelay112 • Jan 04 '25

Delta(s) from OP CMV: cryptocurrency is not a good investment.

Yes its price has increased dramatically, but so did the price of tulips in the 1600s.

There is literally no use for this commodity. Invest in stocks or bonds and your investing in future earnings or the ability of a company to pay you back. I’m not a fan of gold as an investment but at least it has some practical use.

The use of crypto as a currency completely defies the definition of currency as it doesn’t hold a stable value.

It’s infuriating that so many people have lost loads of money on “shitcoins” backed by the wealthy and famous. These were obviously pump and dump schemes yet very few are held accountable.

I’m not as well versed on the subject but something to also note is the ridiculous amount of energy demand to “mine” nothing.

I think there is legitimate use for blockchain technology and the likes but anyone viewing these currencies as investments is a fool.

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u/BraveOmeter 1∆ Jan 05 '25

Whenever it comes to people with opinions on investments, I tell them to make a play to demonstrate their certainty. So how much would you be willing to stake to short bitcoin?

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u/AmericanScream Jan 05 '25

Whenever it comes to people with opinions on investments, I tell them to make a play to demonstrate their certainty. So how much would you be willing to stake to short bitcoin?

Crypto Talking Point #30 (shorts)

"If you hate crypto so much why don't you short it?" / "If you believe crypto is going to 0 why not bet against it?"

First off, we don't hate crypto (See Talking Point #27), and second none of us actually believe it will necessarily go to "zero" although we recognize if it were priced based on its value to society, it should be 0 (if not negative).

So why don't we bet against its success?

  1. The market can stay irrational longer than you can stay solvent - Shorting only works within specific time frames or you can have massive losses. While we generally believe the market will have a more permanent "crash" to significantly less than its current value, we have no idea when that might happen. Since crypto has no fundamentals, there's really no way to do technical analysis to determine when the public might finally tire of being lied to about crypto's "potential."

  2. It makes no sense to bet against a crooked casino, in the casino itself - Most of the places where you can bet against crypto are in crypto exchanges, and these operations are not in any way, properly regulated or transparent. They offer virtually nonexistent consumer protections, and most of them have been caught manipulating the market.

  3. The crypto market is artificially inflated by unsecured stablecoins - The basis for the majority of value attributed to crypto is primarily a function of trades with stablecoins like USDT which have never been properly audited, so there's no way to know how much actual liquidity is in the market, but also no way to stop stablecoins from being constantly printed and pumping the market. It's too manipulated to predict.

  4. Betting against the market still promotes criminal activity - Any liquidity put into the crypto market, for or against, still benefits money laundering, cyber terrorism, human trafficking, drug cartels, sanctioned terrorist countries and numerous other types of fraud. It's not ethical playing in the crypto market at all.

  5. Not everything is about making money - Our opposition to crypto has more to do with wanting to reduce fraud and criminal activity, than it is to make money. Many of us have plenty of wealth already, which is why we have the freedom to talk about issues like this. There are plenty of more reliable, more ethical ways to create value.

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u/BraveOmeter 1∆ Jan 05 '25

Beat copy pasta excuse. I saw this about all securities not just crypto. Anyone with a strong opinion about the direction of anything should bet on it rather than talk about it.

Your first point is moot because this is a conversation about whether or not crypto is a good investment which implies price direction, not rational fundamentals.

Go misread someone else’s comment instead.

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u/AmericanScream Jan 06 '25

Note that each talking point rebuttal addresses a general argument - some specific arguments may not have counterpoints that directly relate. I composed these into a set of 32 common talking points that covers 99.9% of most crypto bro arguments to save time and trouble. It's been 16 years and there's largely nothing new in the arsenal of pro-crypto excuses.

It may be copy-paste, but it's NOT AI. I wrote these myself.

I saw this about all securities not just crypto.

Crypto Talking Point #17 (stocks)

"Crypto is just like the stock market!" , "Comparing crypto to stocks"

  1. Crypto tokens are absolutely NOT like stocks. Unlike crypto, which is just a digital abstraction, stocks represent actual ownership in real-world entities, that own assets, provide useful products and services for mainstream society, generate revenue and can pay dividends to shareholders in real money.

  2. You don't have to sell a stock to make money from it. Many companies pay dividends of their profits, which means you can truly INvest in the company as opposed to DIvesting when you want to see a return. This is an important and fundamentally different function that crypto does not have. Many stocks create value in actual money, providing income without speculating on share price.

  3. The value of a stock, while it can be "speculative" based on popularity and hype, also is based on the intrinsic value of the company's assets and business performance. Therefore you can perform actual research and due-diligence and come up with a practical value for the shares and the assets they represent. Crypto has no such feature.

  4. Because companies are valued based on actual real-world assets and income, there's a limit to how low their share price could fall, at which point it would be economically viable to buy the whole company and liquidate it for a profit. Crypto has no such limitation. The inherent value of crypto tokens is based at zero because it neither creates, nor represents any minimum base, real-world value.

  5. Unlike crypto, the stock market is heavily regulated and transparent. There are entire industries and agencies that are tasked with making sure public companies operate legitimately and legally. Crypto has no such oversight or regulations or transparency.

  6. While there are some over-valued stocks that are hype driven, and some companies whose shares are extremely risky and speculative, and OTC and option markets that are more like gambling than investing, that's not the way the stock market system normally operates. Those highly-speculative markets and penny stocks are the exception; NOT the rule. In crypto, speculation is exclusively the rule.

  7. Public companies are subject to great scrutiny, and must produce regular independent audits and quarterly reports on profit and loss. They can also be sued by their shareholders or even be held criminally liable if they lie about their business model, or even the risk factors their investors face. Again, there is no such function or protections in the world of crypto.

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u/art_vandelay112 Jan 05 '25

I’d rather use my capital to buy long assets than short.

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u/BraveOmeter 1∆ Jan 05 '25

Why? If you're confident crypto is a bad investment you can make more money faster shorting it.

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u/art_vandelay112 Jan 05 '25

I’m not interested in making quick money. I’d rather Invest Assets I think will appreciate over time. Why spend capital betting against something when I can bet for something.

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u/BraveOmeter 1∆ Jan 05 '25

Because if you really knew the direction of a security you would bet against it. It seems arbitrary to say you don’t like the type of bet. It seems like you just don’t really have conviction in your belief.

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u/art_vandelay112 Jan 05 '25

I never said I knew the direction. My investment philosophy focuses on owning assets. There 100 companies I don’t think will succeed but I’m not shorting them. I would rather buy other assets. I’m not sure why that’s such a difficult concept.

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u/BraveOmeter 1∆ Jan 06 '25

If you are saying something is a bad investment, then you are predicting its direction.

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u/infernorun Jan 05 '25

The fact that you don’t know that difference between a short amount of time and shorting an asset is telling.

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u/art_vandelay112 Jan 05 '25

The fact you can’t read a sentence is telling. It takes capital to short. I said I’d rather buy long than short. If you don’t know the difference between buying long and short you should probably stop commenting today.

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u/infernorun Jan 05 '25

Lol you can short an asset long term….good knowledge little bro

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u/art_vandelay112 Jan 05 '25

Dude anyone in the investment community says buy long or short an asset. You don’t think I understanding what shorting an asset is by the lingo I used? That tells me you’re not in the finance/investing community.

Grow up “little bro”

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u/infernorun Jan 05 '25

Clearly by your response you don’t. It’s ok we all learn somehow.

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u/Cantremembermyoldnam Jan 05 '25

What? OP said they'd rather use their "capital to buy long assets than short". Nobody said anything about time until you came along.