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ROI of creating an investment portfolio 1 year ago, and selling today: - All Bitcoin: ~500% - Mix of top market: ~2800% - All Strat: ~13500% Meanwhile, stoc

ROI of creating an investment portfolio 1 year ago, and selling today: - All Bitcoin: ~500% - Mix of top market: ~2800% - All Strat: ~13500% Meanwhile, stock investors call 12% a good year.

mrb 9y ago
Yup. Few people realize Bitcoin has been literally the best performing investment in human history. One dollar invested in March 2010 is worth $1+ million today. 1,000,000× returns. But the downside of performing so well is that it is too easy to get distracted by the price and disregard the radical improvements that Bitcoin brings over legacy financial systems...
- joosters 9y ago
  What? Practically every day, someone wins $millions from a $1 lottery ticket somewhere in the world. That's the same or better returns...
  - mrb 9y ago
    A "lottery ticket" does not quite fit the traditional definition of "investment". Besides, almost no one who buys a lottery ticket ends up winning millions, but everyone who bought and held bitcoins since 2010 is a winner.
    - joosters 9y ago
      They seem perfectly equivalent to me. Lottery winnings came from everyone else buying tickets, yes. So where are the 'winnings' of these magical 2010-era bitcoin holders coming from, if not from other people buying bitcoins?
csomar 9y ago
Eh, I don't really know where to start to explain how wrong this is. The crypto market is still niche. There are stocks that make 100-1000% performance. But the stock market is "saturated" for representing assets, equities and companies. So its growth is limited.
- proofofstake 9y ago
  I agree with: > The crypto market is still niche. There are stocks that make 100-1000% performance. But the stock market is "saturated" for representing assets, equities and companies. So its growth is limited. so I do not see how my post was wrong. These are the numbers. With such numbers, it would be foolish to discard the crypto market as "too volatile" and stick with stocks. There are crypto coins that did way better than Strat, but there was not enough volume to make a decent profit. Even Doge did 260%. The only "loser" is STEEM with a 80% ROI.
  - shimon 9y ago
    No, these numbers do in fact suggest the crypto market is extremely volatile. Many, many people who invest regularly in stocks should not invest in cryptocurrency because it is too volatile. People/companies that are able to understand and accept the risk that comes from speculating on cryptocurrencies should consider doing so, because it is possible to make a profit, perhaps a significant one. But if you're looking at the past and saying "wow, I should buy BTC because it made 1000% last year - it can't lose!" then you're ignoring a quite serious risk that volatile growth could change into volatile collapse in the future.
    - csomar 9y ago
      See Shimon comment. Economists/Traders/Finance guys have this concept that: Every stock/asset/price is equal. It is the volatility that matters. Traders don't look for "potential growth". In their frame of reference, that potential of growth is already "priced in". Now if you disagree with that, it is another story. Edit: replied to the wrong guy.
    - base698 9y ago
      I always read these posts as all or nothing, so forgive me if that's not what you mean. Why not take a smaller chunk of a portfolio, say 2%, and invest in crypto? That way you can get potentially huge gains with little at risk.
    - DennisP 9y ago
jacques_chester 9y ago
Meanwhile, people said stuff like this before 2000 about all sorts of individual stocks.
- proofofstake 9y ago
  Agreed, and there probably will be a year where nearly all coins tank. It would be foolish to invest all your profits back into the market, year after year. But should this stop you (or any investment firm) to seriously look at the profit potential here? What do you get for correctly calling the bubble in 3 years? Nothing.
  - curious_fella 9y ago
    > What do you get for correctly calling the bubble in 3 years? Well, if you knew when the bubble was bursting, then there would be no problem!
    - proofofstake 9y ago
      A slot machine is known to give a 200% ROI and allow a single pull each day. You play this slot machine every day for 500 days, until you notice it stops rewarding you. Then someone says: "Look I told you so, I've been telling everyone for 2000 days now: This slot machine will crash one day!". And you say: "Ok. You were right. Guess the party couldn't last forever. Thanks for the warning!". Out of habit you play for 30 more days, but the rewards stay gone, so you exit with some nice profit. Meanwhile, the other person knew of the existence of a highly profitable slot machine, while it was still profitable, but never actually played it, because they feared that one day it may not be profitable anymore.
      - omegaham 9y ago
        This isn't quite right. To stick with the casino example, a large number of Bitcoin speculators are "letting it ride." They've won a bunch of times, and they continue to bet more and more money. Your example only works if you are regularly selling BTC as its worth increases. If you're just holding onto it, your gains are never realized.
IAmGraydon 9y ago
All Strat?
- proofofstake 9y ago
  https://coinmarketcap.com/currencies/stratis/ https://coinmarketcap.com/currencies/stratis/
jordanb 9y ago
"If these trends continue..." https://www.youtube.com/watch?v=e6LOWKVq5sQ https://www.youtube.com/watch?v=e6LOWKVq5sQ
- proofofstake 9y ago
  Nice quip. To stick with analogy: Some people in this thread are in the 70s, telling record companies to ignore the disco genre entirely, because it is a fad that can't last more than a decade. Instead, telling them to stick with what they know: 50s rock and roll.
SilasX 9y ago
What about the Sharpe ratio? Divide the return by the (daily?) standard deviation of returns.
- DennisP 9y ago
  Quite high in crypto: https://www.bletchleyindexes.com/blog/idx_perf_post https://www.bletchleyindexes.com/blog/idx_perf_post
partiallypro 9y ago
Now compare total market capitalization of equity markets to Bitcoin. I doubt you could liquidate millions of dollars of bitcoin in a day and not make the market plummet. You can do that in the last 30 minutes of the stock trading day with no very little price fluctuation. There are equities that are up triple digits, including Nvidia...who is realistically the biggest winner in crypto mining.
- mrb 9y ago
  «I doubt you could liquidate millions of dollars of bitcoin in a day and not make the market plummet.» Wrong. 1.5+ BILLION dollars' worth of bitcoins are sold and bought in aggregate daily on 100+ exchanges: https://coinmarketcap.com/currencies/bitcoin/#markets https://coinmarketcap.com/currencies/bitcoin/#markets
  - cshenton 9y ago
    Being able to sell one cryptocurrency for another doesn't mean the first cryptocurrency is liquid.
    - DennisP 9y ago
      From a quick check at coinmarketcap, the daily bitcoin/dollar volume on BitMEX alone is $455 million. Next up is Bitfinex with $182 million.
  - gnaritas 9y ago
    That's a very very small amount, real currency markets do trillions a day, bitcoin is the size of a large company. He's totally right, that's a small liquid market when compared to the real markets. If you tried to dump 10 million in bitcoin all at once, there's a good chance you're going to crash the market; 10 million wouldn't even move the price in the EURUSD.
    - DennisP 9y ago
      Large cap stocks are not generally considered to be illiquid investments, even though they're much smaller than major currency markets.
polishTar 9y ago
I can do you one better because I made 200x ROI investing in the roulette wheel in just a single day. Some people told me that I'm confusing good investment decisions with high volatility ones, but what do they know? They're just stupid investors! /s
deleted 9y ago
[deleted]

ROI of creating an investment portfolio 1 year ago, and selling today: - All Bitcoin: ~500% - Mix of top market: ~2800% - All Strat: ~13500% Meanwhile, stock investors call 12% a good year.

mrb 9y ago

Yup. Few people realize Bitcoin has been literally the best performing investment in human history. One dollar invested in March 2010 is worth $1+ million today. 1,000,000× returns. But the downside of performing so well is that it is too easy to get distracted by the price and disregard the radical improvements that Bitcoin brings over legacy financial systems...

joosters 9y ago
What? Practically every day, someone wins $millions from a $1 lottery ticket somewhere in the world. That's the same or better returns...
- mrb 9y ago
  A "lottery ticket" does not quite fit the traditional definition of "investment". Besides, almost no one who buys a lottery ticket ends up winning millions, but everyone who bought and held bitcoins since 2010 is a winner.
  - joosters 9y ago
    They seem perfectly equivalent to me. Lottery winnings came from everyone else buying tickets, yes. So where are the 'winnings' of these magical 2010-era bitcoin holders coming from, if not from other people buying bitcoins?

csomar 9y ago

Eh, I don't really know where to start to explain how wrong this is. The crypto market is still niche. There are stocks that make 100-1000% performance. But the stock market is "saturated" for representing assets, equities and companies. So its growth is limited.

proofofstake 9y ago
I agree with: > The crypto market is still niche. There are stocks that make 100-1000% performance. But the stock market is "saturated" for representing assets, equities and companies. So its growth is limited. so I do not see how my post was wrong. These are the numbers. With such numbers, it would be foolish to discard the crypto market as "too volatile" and stick with stocks. There are crypto coins that did way better than Strat, but there was not enough volume to make a decent profit. Even Doge did 260%. The only "loser" is STEEM with a 80% ROI.
- shimon 9y ago
  No, these numbers do in fact suggest the crypto market is extremely volatile. Many, many people who invest regularly in stocks should not invest in cryptocurrency because it is too volatile. People/companies that are able to understand and accept the risk that comes from speculating on cryptocurrencies should consider doing so, because it is possible to make a profit, perhaps a significant one. But if you're looking at the past and saying "wow, I should buy BTC because it made 1000% last year - it can't lose!" then you're ignoring a quite serious risk that volatile growth could change into volatile collapse in the future.
  - csomar 9y ago
    See Shimon comment. Economists/Traders/Finance guys have this concept that: Every stock/asset/price is equal. It is the volatility that matters. Traders don't look for "potential growth". In their frame of reference, that potential of growth is already "priced in". Now if you disagree with that, it is another story. Edit: replied to the wrong guy.
  - base698 9y ago
    I always read these posts as all or nothing, so forgive me if that's not what you mean. Why not take a smaller chunk of a portfolio, say 2%, and invest in crypto? That way you can get potentially huge gains with little at risk.
  - DennisP 9y ago

jacques_chester 9y ago

Meanwhile, people said stuff like this before 2000 about all sorts of individual stocks.

proofofstake 9y ago
Agreed, and there probably will be a year where nearly all coins tank. It would be foolish to invest all your profits back into the market, year after year. But should this stop you (or any investment firm) to seriously look at the profit potential here? What do you get for correctly calling the bubble in 3 years? Nothing.
- curious_fella 9y ago
  > What do you get for correctly calling the bubble in 3 years? Well, if you knew when the bubble was bursting, then there would be no problem!
  - proofofstake 9y ago
    A slot machine is known to give a 200% ROI and allow a single pull each day. You play this slot machine every day for 500 days, until you notice it stops rewarding you. Then someone says: "Look I told you so, I've been telling everyone for 2000 days now: This slot machine will crash one day!". And you say: "Ok. You were right. Guess the party couldn't last forever. Thanks for the warning!". Out of habit you play for 30 more days, but the rewards stay gone, so you exit with some nice profit. Meanwhile, the other person knew of the existence of a highly profitable slot machine, while it was still profitable, but never actually played it, because they feared that one day it may not be profitable anymore.
    - omegaham 9y ago
      This isn't quite right. To stick with the casino example, a large number of Bitcoin speculators are "letting it ride." They've won a bunch of times, and they continue to bet more and more money. Your example only works if you are regularly selling BTC as its worth increases. If you're just holding onto it, your gains are never realized.

IAmGraydon 9y ago

All Strat?

proofofstake 9y ago
https://coinmarketcap.com/currencies/stratis/ https://coinmarketcap.com/currencies/stratis/

jordanb 9y ago

"If these trends continue..." https://www.youtube.com/watch?v=e6LOWKVq5sQ https://www.youtube.com/watch?v=e6LOWKVq5sQ

proofofstake 9y ago
Nice quip. To stick with analogy: Some people in this thread are in the 70s, telling record companies to ignore the disco genre entirely, because it is a fad that can't last more than a decade. Instead, telling them to stick with what they know: 50s rock and roll.

SilasX 9y ago

What about the Sharpe ratio? Divide the return by the (daily?) standard deviation of returns.

DennisP 9y ago
Quite high in crypto: https://www.bletchleyindexes.com/blog/idx_perf_post https://www.bletchleyindexes.com/blog/idx_perf_post

partiallypro 9y ago

Now compare total market capitalization of equity markets to Bitcoin. I doubt you could liquidate millions of dollars of bitcoin in a day and not make the market plummet. You can do that in the last 30 minutes of the stock trading day with no very little price fluctuation. There are equities that are up triple digits, including Nvidia...who is realistically the biggest winner in crypto mining.

mrb 9y ago
«I doubt you could liquidate millions of dollars of bitcoin in a day and not make the market plummet.» Wrong. 1.5+ BILLION dollars' worth of bitcoins are sold and bought in aggregate daily on 100+ exchanges: https://coinmarketcap.com/currencies/bitcoin/#markets https://coinmarketcap.com/currencies/bitcoin/#markets
- cshenton 9y ago
  Being able to sell one cryptocurrency for another doesn't mean the first cryptocurrency is liquid.
  - DennisP 9y ago
    From a quick check at coinmarketcap, the daily bitcoin/dollar volume on BitMEX alone is $455 million. Next up is Bitfinex with $182 million.
- gnaritas 9y ago
  That's a very very small amount, real currency markets do trillions a day, bitcoin is the size of a large company. He's totally right, that's a small liquid market when compared to the real markets. If you tried to dump 10 million in bitcoin all at once, there's a good chance you're going to crash the market; 10 million wouldn't even move the price in the EURUSD.
  - DennisP 9y ago
    Large cap stocks are not generally considered to be illiquid investments, even though they're much smaller than major currency markets.

polishTar 9y ago

I can do you one better because I made 200x ROI investing in the roulette wheel in just a single day. Some people told me that I'm confusing good investment decisions with high volatility ones, but what do they know? They're just stupid investors! /s

deleted 9y ago

[deleted]