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I'm now in the crypto craze

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  • Dahlia
    started a topic I'm now in the crypto craze

    I'm now in the crypto craze

    Just putting it out there- about a month ago my partner learned about cryptocurrency through a conversation with a wealthy man on an airplane.

    I had heard of it and dismissed it as a fad that was going to be as useful as beanie babies or pokemon cards.

    But the more he researched it, the more I kind of thought there is a legitimate use for it (worldwide use) , several pros associated with it (no government interference or taxes), and it still seems to be in the infant stages (4% of the U.S. or world?-cant remember the population- is using it). Experts are saying that the generation entering the job market now has an "instant gratification" mindset- and this seems like it has Generation Millennium written all over it with daily and hourly influx. So I wonder if younger workers will divert paychecks away from stock market investing and into cryptocurrency?

    So as much as it is worth now with a 4% popularity- I can see why people are predicting it (bitcoin at least) to go to $100k value.

    So I gave my approval to get into it. I don't have the spare cash, but my partner does. So he put in $1500 and has seen a profit of $400 (give or take with volatility). Today he put in another $500, and is planning to put in $1k more in the next few weeks.

    After that, I want him to stop and wait. And pull his principle out so that the profit just does its own thing in the market. He initially agreed to that plan, but now he's so excited and buying so deeply into the hype- I am concerned it will be a small battle to get him to pull out.

    Not a real question here- just a personal observation from a non-expert, and non-industry vantage point.

    This seems a lot like gambling over investing. Though I am watching all of this and I've now got a personal stake in crypto success too.

    Anyways, just my .02.

  • jim cooper
    replied
    Definitely a bubble that will soon burst. I believe its too late to enter now, and won't do until there is some regulation safety otherwise its just like gambling.

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  • Tabs
    replied
    I'm betting Uncle Sam will win the taxation case.

    The dark net is already moving on from bitcoin due to blockchain.

    Speculations come and go. Currently, it's cryptocurrency. Before that was precious metals due to the housing bubble burst and recession. Before that was the housing bubble (remember all those people flipping houses because they have claimed that housing prices have never gone down before). (Edit: Around post-9/11, there was also a bubble of sorts for anything related to the military, security, and firearms, etc.) Before that was the tech stocks. I mean it just keeps going.

    What I find interesting isn't so much as what the latest fad is, because history has shown that there is always going to be something. Rather, I'm more interested in why people follow them and even insist on them.
    Last edited by Tabs; 12-26-2017, 05:39 PM.

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  • frugal saver
    replied
    The U.S. government isn't putting its foot down on Bitcoin (that I've heard) but the IRS is.

    The IRS has ruled any cryptocurrency to be property and must follow the same rules and taxation as buying and selling stocks or bonds. I recently heard that they're starting a court case against one company that is refusing to turn over records regarding sales--and more will probably follow.

    Given one of the benefits of Bitcoin (to some) is the ability to launder money and evade taxes, this is going to be an interesting war between the companies and the IRS.

    Might need extra popcorn before it's all done.

    Leave a comment:


  • Tabs
    replied
    Eh, no, I disagree. Not literally everything you put your money into is speculating. I mean, what about bonds (backed by some government or corporate entity) or even gold coins (backed by the government down to your local pawn shop)?

    Even if it's stocks, you have all kinds, like for example, Waste Management (WM) which should be around short of a nuclear holocaust. WM even pays a dividend (almost 2% at the time of this writing) if that will make you happy. A lot of stocks also have a real track record (WM has risen from $35 in 2013 to $85 in 2017).

    Also, this has already been mentioned but what about intrinsic value? Even gold at least has some commercial use.

    And finally, many stocks have a lot of fundamentals behind it. You can check their books and cashflow, you can check their track record, you can check their management team. Cryptocurrency has none of that.

    Look, if you want to buy some cryto, go ahead. I'm not going to judge. But saying everything out there is the same as spinning a roulette wheel, then no, that is just incorrect.
    Last edited by Tabs; 12-26-2017, 05:44 PM.

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  • Sam1000
    replied
    Anything you invest your money into is gambling. You either gain or lose money. So technically, it is gambling. Although, it's essential that you know what project you're investing into. Similar to stocks , where you invest into the companies to ultimately get nice returns. Same concept , although, the crypto market is much more volatile and has made tons of millionaires.

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  • Spiffster
    replied
    Tulips, er Bitcoin is up to 17k. Probably going to cash out more very soon. Got cars I want to pay off, saving the rest until... I dont know, perhaps pay off mortgage balance. 401k and Roth maxed out so not really all that motivated to invest in other areas.

    Update: Pulled out $15k to pay off remaining balance on cars. Feeling sketched out with relentless upswing. Still have much more than that in the game. All of it has been house money since about June.
    Last edited by Spiffster; 12-07-2017, 07:55 AM.

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  • Joan.of.the.Arch
    replied
    I know my brother had a little bit of bitcoin from years ago when he had a tip jar on his blog and had arrangements for bitcoin tips. I hope if he still has it, he takes his profit while it is real.

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  • Spiffster
    replied
    How are Tulips different than Bitcoin?

    Its all about the infrastructure in place. Bitcoin is easily transferred securely around the world and has infrastructure in place that allows it to be quickly converted to just about any currency almost instantly. For transferring or converting money, its currently the most secure and effective medium for doing so.

    Only 21 million will ever be produced. Which is why the amount available to trade will likely, always be in ever shortening supply. But that has no real effect on its utility for transferring and converting various currencies.

    Obviously there are many nefarious uses as well... which is another reason why the government may want to interfere as we have seen with China and Bitcoin exchanges being closed down. Which had much less effect than expected. But if US government was to put its foot down then all bets are off, which makes BTC an even riskier proposition (Though I never said it wasnt).

    These are the key differences I can think of.
    Last edited by Spiffster; 12-04-2017, 01:39 PM.

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  • james.hendrickson
    replied
    Originally posted by Spiffster View Post
    Comparing Bitcoin to Tulips underlines the lack of general understanding of bitcoin.

    I think the reason it will continue to climb is because more and more people are becoming aware to the potential it has. Still very speculative and apparently not an investment. But many are buying and holding, making less available to trade. Bitcoin is still relatively unknown and will increase in popularity.

    Im gonna go out on a limb and say that the US $ has a lot to do with what people are willing to pay for BTC as national debt continues to spiral out of control. But hey, lets give everyone tax breaks. yay!
    Spiffster - okay, so how is it different?

    Leave a comment:


  • Spiffster
    replied
    Comparing Bitcoin to Tulips underlines the lack of general understanding of bitcoin.

    I think the reason it will continue to climb is because more and more people are becoming aware to the potential it has. Still very speculative and apparently not an investment. But many are buying and holding, making less available to trade. Bitcoin is still relatively unknown and will increase in popularity.

    Im gonna go out on a limb and say that the US $ has a lot to do with what people are willing to pay for BTC as national debt continues to spiral out of control. But hey, lets give everyone tax breaks. yay!

    Leave a comment:


  • msomnipotent
    replied
    A lot of people are comparing it to the tulip craze, and rightfully so. Tons of people driving up the cost of something they don't really understand (or know how to take care of) in the hopes that they can sell it for a profit. I don't want to be the last person holding the bag.

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  • james.hendrickson
    replied
    Originally posted by Spiffster View Post
    BTC nearing $12k, almost doubled from my last post on this thread on 10/31... so about a month ago.
    What in the investment thesis in bitcoin at this point?

    It feels an awful lot like stocks in the tech bubble a decade ago to me - more downside risk than upside potential.

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  • Spiffster
    replied
    BTC nearing $12k, almost doubled from my last post on this thread on 10/31... so about a month ago.

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  • Tabs
    replied
    Linus Tech Tips just posted this several hours ago.

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