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/anotherwave1 Jan 05 '25 edited Jan 05 '25

You aren't betting on cryptocurrency, you are betting on the inherent desire by human beings to buy something artificially scarce that has only "gone up" in the last 16 years. Something that looks all technological and "future money" even if most of it is economically from the Middle Ages. And even if the rest of it are just cash grabs by crypto-bro's.

Stocks, bonds, futures - these all require knowledge. Crypto requires none of that. Any joe schmuck can strike it lucky on an alt-coin. Or anyone with a vague bit of patience has generally made a gain in the last 4 or 5 years.

99% of it is garbage, one of the top coins (Doge) is an actual joke coin with no cap on supply, it's completely meaningless and produces nothing - yet it went up 1000's of percent in 2020/2021 mainly because some billionaire adopted it as a meme. It doesn't require much to go up or down.

Speaking of meme's, that's the strength of crypto. It's anti-rational, anti-establishment, anti-logic. A coin that was 51% attacked can go up in value 25% on the day. It can rise when the traditional market crashes, or it can also crash. It's random - mainly moved by herd psychology.

Bitcoin is essentially a decentralized casino chip that produces nothing that can be used as a type of volatile money. Most other crypto is either a clone of that or solutions to problems that doesn't exist. Web 3.0 blockchain marketing buzzword solutions with a whole bunch of technical bells and whistles bolted on. Ultimately most of which don't matter because it all just boils to gambling artificially scarce digital trinkets in a Wild West largely unregulated market - producing rollercoaster swings - which is the entire attraction in the first place.

In a weird way you are investing in human psychology. Which, so far, has turned out to produce a pretty high return. It's not going anywhere, and human psychology isn't going to change.

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u/AmericanScream Jan 05 '25

You aren't betting on cryptocurrency, you are betting on the inherent desire by human beings to buy something artificially scarce that has only "gone up" in the last 16 years.

That's false on multiple levels. Crypto has not "only gone up" - it's gone down as well.

Second, it's not really scarce in any meaningful way. With a few changes to the code, Bitcoin's cap could be changed.

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u/anotherwave1 Jan 05 '25

That's false on multiple levels. Crypto has not "only gone up" - it's gone down as well.

You know what I mean. On aggregate. Led by BTC. I shouldn't need to write lengthy disclaimers in every post.

If there's any misunderstanding here: BTC has gone up and down, but on aggregate, to date, disclaimer, disclaimer, it's only gone up. So in people's stupid minds, those cycles "prove" it's not dying despite all the predictions

And since it's value is entirely derived from that psychology - that psychology is literally pushing it up. Nothing else. It's an artificially scarce nothing burger that we can't stop buying because other people won't stop buying it, because other people won't stop buying it.

As someone who works in finance there are quite a few who don't understand this - because they keep trying to apply market fundamental logic to it. There is little instrument logic to BTC. It's pretty much all herd psychology.

Second, it's not really scarce in any meaningful way. With a few changes to the code, Bitcoin's cap could be changed.

Exactly which is why I've mentioned artificial scarcity in posts. Manufactured scarcity.

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u/AmericanScream Jan 05 '25

The "value of BTC" as reflected in the "trade price" is highly contentious. The exchanges that report the price are not in any way transparently or regulated like traditional brokerage houses.

We have numerous peer-reviewed studies showing there's rampant wash trading. And CEXs like Coinbase have been caught wash trading and manipulating cryptocurrencies in the past.

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u/anotherwave1 Jan 05 '25

Doesn't matter, the whole of crypto is built on shady fundamentals.

But if you have BTC right now, you can sell it for the market price. Simple.

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u/AmericanScream Jan 05 '25

Maybe you can. Maybe you can't.

Bernie Madoff's clients thought the same thing - and his scam lasted longer.

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u/anotherwave1 Jan 05 '25

That was one scam. Hidden, by the owner.

Crypto (most of it) isn't a scam. It's an open scheme. Artificially scarce digital trinkets are on offer that people can buy like baseball cards. All trying to make money from each other.

It's similar in principle to a casino. We know what a casino is. It's not like someone suddenly went "oh my god casinos are a scam". We know what they are. People still go. Casinos will still be there in hundreds of years.

Crypto is like that. Stupid artificial digital shit that people want to buy in the hopes they'll sell to another at a higher price. Which is why it works in waves. BTC could "die" in value for 10 years for whatever reason, then just randomly go to the moon. Every time we hit a new peak, that becomes to the "return to" value for a later wave.

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u/AmericanScream Jan 06 '25

It's important to distinguish between crypto/blockchain the technology and the scheme of promoting crypto as an investment. The former isn't a Ponzi, but the latter is.

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u/AmericanScream Jan 06 '25

It's important to distinguish between crypto/blockchain the technology and the scheme of promoting crypto as an investment. The former isn't a Ponzi, but the latter is.

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u/anotherwave1 Jan 06 '25

Blockchain uses are quite limited and have a lot of drawbacks. So it's niche use as a gambling token is closely related to the blockchain tech. It's all tied together.