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Ask HN: IF the Bitcoin bubble bursts, where would you invest next?

• matchmike1313 9y ago
  I would probably lump my money in my existing Wealthfront account. I invest <5% of my disposable income in various cryptocurrencies, I view them as volatile commodities.
• BjoernKW 9y ago
  A small amount in Bitcoin is the only speculation I indulge in. For now Bitcoin and other cryptocurrencies are just that: Casino money. In terms of real investment ETFs and - to a lesser extent - individual company shares are still the way to go.
  • SnowingXIV 9y ago
    Very much so, I've had a few coworkers ask about Bitcoin and if they should invest (because they've seen me use my lunch money). I say, it's an interesting subject just like maybe a slot machine that has a theme you like such as Game of Thrones. I do the same with some company stocks that look promising _and_ I enjoy following but again - not viewing these as a true investment. I would love to strike gold, but it's complete gambling at this point and I'm likely not putting in enough to see life changing dividends. I never would recommend someone to invest in Bitcoin but if they have extra money and are looking to gamble in an interesting way go for it.
• deleted 9y ago
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• onecooldev24 9y ago
  If the bubble bursts the right place to invest would be bitcoin itself. Whether you like it or not BTC is here to stay and most likely going to be the next currency. A lot of people hate BTC on this forum cause they feel they missed out.
  • RantyDave 9y ago
    I do hate bitcoin and for exactly that reason. But I'm conflicted about it - if I could make a huge amount of money and know, for a fact, that it was caused by me being in the right place to take money off people who actually earned it... is this a bad thing to do? It's a confidence trick - is it bad to be a con artist? Or is relieving the gullible of their hard earned cash a noble pastime? There certainly isn't any actual value being created. But if a bunch of greedy bastards wanted to pay off my mortgage, I can't see I'd have a problem with it.
    • deleted 9y ago
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• quickthrower2 9y ago
  I don't consider Bitcoin to be an investment per-se. More of a punt. If I need an alternative way to punt, maybe some penny stocks?
  • vibrio 9y ago
    I came here to say this. Knowing the difference between an investment and a gamble is my most important rule in money management. There is nothing wrong with gambling-just know when and to what extent you are doing it.
• Merthurian 9y ago
  The dip.
• zaarn 9y ago
  Invest in Butter and Corn, when the Bitcoin Bubble inevitably bursts Popcorn will be in high demand. I think it would not be a bad idea to just follow investment advice; take a well performing index or ETF and stick to that. Maybe invest some into bitcoin again after the bubble has burst and it has a closer to reality value.
  • sunseb 9y ago
    Good sense of humor there :)
• 0bsidian 9y ago
  I would buy more Bitcoin. The world needs a censorship-resistant digital vault to store wealth. Bitcoin is basically a very cheap "Swiss bank account as a service" for the world's unbanked. Some use cases I can think off the top of my head: (1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key. (2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat. (3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad. I truly believe that Bitcoin will serve the unbanked of the world. We're not there yet, but these are very early days for crypto. Sorry for the long winded response, I get excited when talking about BTC.
  • ataturk 9y ago
    I don't think "invest" is the right word when talking about speculation. Your points 1 & 2 are decent, and your lead-in is okay. But I counter with the following: bin Talal is an out and out criminal, and may be partly responsible for 9/11 and other heinous crimes, we'll see. You really want people like that having some escape mechanism? He's probably going to lose his head anyways, so Bitcoin isn't going to help him any. I'm sure I don't understand the needs of the unbanked. There may be a good use for Bitcoin there. However, "unbanked" people may not be cognitively capable of using Bitcoin, we'll see. The world does need censorship resistance, I'm with you there. You may not like what happens with that resistance--it could become a far left or far right genocide. I'm thinking the Federal Reserve already has a monopoly on that level of killing power. In the end, I don't think Bitcoin will end up being the thing that solves any real problems. People who are "unbanked" have very little in the way of money. A reform of the banking system itself is in order and long overdue (e.g. they have been sticking customers with crazy fees for decades and need to stop). Banking reform would solve the problem better than some janky cryptocurrency ever will.
• megadethz 9y ago
  I’d look into Monero and Zcash. Allow my wealth to be truly private.
• boobsbr 9y ago
  Does anyone spend BTC? Seems like these upward spikes in value would incourage people to buy and hold indefinitely.
  • Merthurian 9y ago
    Everyone has a price.
  • lhinds 9y ago
    I do, I convert to amazon gift cards. Last purchase was a playstation VR.
  • djellybeans 9y ago
    I spent some of mine on hobby electronics parts the last time it was about $400 per BTC. Not even mad. Just doing my part in the currency's use for goods.
• raphaelj 9y ago
  Bitcoin is just pure speculation at this point. Like gold, Bitcoin's value comes from the fact that more and more people are interested in buying it. Unlike stocks, it does not generate real money through dividends. For every person that got rich with Bitcoin, some other unlucky guy will lose the very same amount of money. When the bubble will burst, it will be zero sum game. Index-based ETFs should be the way to go for casual investors. Put some money in half-a-dozen index funds from the US, EU and Asia, and you'll get a low-fee, relatively stable and 7% average yearly ROI.
  • creatornator 9y ago
    I'm not sure if this is true--in Wall Street, too, there is a seller for every buyer. Every time someone gets a killer deal on some stock, someone else got equally ripped off. As far as I can tell, the distinction between BTC and stocks is trivial--the price of both is driven by supply and demand.
    • johnwheeler 9y ago
      The accounting isn’t zero sum with stocks in that capital is supposed to beget more capital through value creation. That’s the intrinsic value of company shares. So, while there might be a winner and a loser, the world still ends up with more ‘wealth’.
      • AznHisoka 9y ago
        the IPO is supposed to work this way. After the IPO, all bets are off. It's just traders, machines, and ego's trading exchanging among each other. Once upon a time, having a share of a company always meant you were getting a share of their revenue (dividends). Now, it's primarily hoping there's a bigger fool. Which 99% of the time there is because a lot of us put money into the stock market without consciously investing (ie. 401ks)
• shepardrtc 9y ago
  Ripple. Its more stable and is being adopted by financial institutions (AMEX being one of the biggest so far). I honestly think it'll be the first widely used crypto. Its a little different from Bitcoin, but I think it'll do well in the long run.
  • reefoctopus 9y ago
    Isn't ripple centralized?
    • shepardrtc 9y ago
      A little. Transaction validation is distributed amongst validators installed at organizations across the world. I think there's around 58 or so now, but they're pushing to have a lot more. And they're eventually going to have it where none of them are controlled at all by Ripple (the company). They've listed MIT and Microsoft as organizations already running validators, as well as a number of foreign companies I've never heard of (WorldLink, Telindus-Proximus Group, Bahnhof, and AT TOKYO?). So yes, its a little more centralized than Bitcoin, but everything I read really gives me the impression that they're handling things in the right way, so as to have a balance between network performance and distributed safety, without any one person/group being able to manipulate the ledger. So there'll never be any mining farms that can throw their weight around. If anyone is really curious, do your research and I think you'll find the tech to be pretty interesting.
  • welikethepark 9y ago
    What are your thoughts re: Stellar? I'd personally rather see them succeed than Ripple.
    • shepardrtc 9y ago
      The idea pitched for Stellar is very feel-good, but there are a number of drawbacks. First of all, the creator is a little sketchy. The way he acted when he bailed on Ripple and set up Stellar was very childish. Second, the non-profit status is questionable. There are a lot of unknown people that stand to gain a lot of money if the currency increases in value. They claim to give away a lot of their currency, but very few people actually claim it, so in the end, the company itself gets to claim it (and set the stage for a profit down the road). They did get IBM to throw their name in to the mix, but even IBM said this was temporary. I don't know. I just don't get a good feeling from them.
• bsvalley 9y ago
  If I could predict the future I could come up with a very helpful answer to your question. Unfortunately... ;)
• vinchuco 9y ago
  When the tulip craze happened, where did people invest next? (not claiming it's the same)
  • qbrass 9y ago
    Real estate.
• mancerayder 9y ago
  Related question: If the Bitcoin bubble bursts, will capital exit the cryptocurrency space, taking other currencies down with it (my hunch) or will another coin, ETH or Litecoin (or another), replace it?
• mdotk 9y ago
  Why has it gone from P2P payments to store of wealth now?
  • odonnellryan 9y ago
    This is a good question. What value does BTC have? The value to make purchases. If the transaction cost keeps going up, well, that value diminishes, doesn't it?
• cvaidya1986 9y ago
  Augmented reality.
• surreptitious00 9y ago
  Ethereum, the flippening will happen and when it does it will happen fast. Ether transfers in seconds for a fraction of a penny, it's a better cryptocurrency that bitcoin and that's not even its billing. It has far more utility and will use far less energy with a hybrid Proof of Stake/Proof of Work and eventual Proof of Stake consensus. So much more in the works, Ethereum's brightest days are ahead. All that while bitcoin squabbling brings it low, fork after fork after fork. It stands as an amazing proof of concept does bitcoin, but in a short number of years it will be in a museum.
• dabockster 9y ago
  The thing to keep in mind is that if the Bitcoin bubble bursts, then Bitcoin will go down for sure. However, the altcoins will probably recover for a year or two after the crash. The most drastic thing that would happen is that all the altcoins would be valued against something other than BTC, and the market would adjust accordingly. At the time of this writing, I have investments in BTC, LTC, XMR (Monero), ARK, and RDD (ReddCoin). While BTC does represent around half of my total crypto investment, I wouldn't be completely screwed since one of the alts would probably take its place. I could see either Monero or one of the Bitcoin forks taking over in that scenario. So, answering the question, I'd still invest in crypto. But I wouldn't invest in Bitcoin directly anymore.