24 ms·

But at the end of the day, how is it different from the current equities market? (aside from immature tools and imperfect infrastructure that is just shaping up

But at the end of the day, how is it different from the current equities market? (aside from immature tools and imperfect infrastructure that is just shaping up). Stock market can tank 50% like it did in 2009 (together with the real estate market) and your average investor will be screwed just the same. Even tech and fundamental analysis gurus cannot explain the endless bull market we're on, how is getting lured into stock market with positive press today is any different than BTC? Currently both are different forms of gambling imho.

arcticfox 9y ago
But the stock market - in general - has ridiculously profitable and powerful entities behind it. No matter what happens to investor confidence, ownership of Apple is going to be very valuable because they generate a ridiculous amount of profit. Cryptos, on the other hand, are entirely based on investor confidence.
- Cakez0r 9y ago
  It's not a given that Apple will continue to generate insane profit. Apple will remain very valuable because it has tangible assets that can be sold (book value). So with a total lack of investor confidence, the price floor of Apple shares should be book value - debts. Cryptocurrencies aren't backed by tangible assets, so the price floor is 0.
  - twelve40 9y ago
    I'm not sure a neat definition of a price floor always holds in practice. Wasn't Yahoo at some point valued less than their tangible assets/stake in Alibaba?
  - baddox 9y ago
    I suspect that it’s a bad idea to make investments based on how high the cost floor of the investment is.
- victor106 9y ago
  Cryptos imho are equal to gold not stocks
cdoxsey 9y ago
Investing actually achieves something. When I make an investment in a company I'm providing capital that that company can use in various ways. In return I become an (very small) owner of the company. I get a say in how it's run (voting rights), and I get a share of the profit (in dividends). If you hold on to a stock like coca cola for 30 years, never looking at the stock price, and never sell, you'll actually make money. Yes there's risk, coca cola could go out of business. But that's pretty unlikely, and if you're not willing to take that risk, consider using a diversification strategy. Buy some passively managed ETFs. Even with the crisis, in the long run, you would've made money. Investing is not gambling, it's not a zero sum game and the fundamentals of it have some basis in reality. Whatever is happening with Bitcoin right now makes no sense. Eventually things like this have to realign with reality.
- AznHisoka 9y ago
  1. the stock market, other than the IPO is a secondary market. You are not providing capital to the company but just paying another trader for his shares. 2. The majority of stocks do not provide (and will never) dividends and the majority of buyers have no voting rights. but you are right. For practical purposes, the stock market is not pure gambling. There are institutions that make it legitimate. Such as the SEC, pensions, 401ks and brokerage firms. And the fact the government cares so much about it going up (because it funds so many pensions and social security might go away) But lets not fool ourselves in thinking the stock market is a virtuous piece of infrastructure. The vast majority of stock holders dont know anything about the conpanies they invest nor how stocks even work. They invest blindly in it through mutual funds or 401ks.
  - hndamien 9y ago
    This isn't entirely true. If secondary market trades increase the value of the stock then the company can sell some of their stock to get more funding, or can borrow at better terms. Similarly, buying and holding Bitcoin has a range of effects that help the network and generate real wealth. Bitcoin is a services company, a payment network, a bank, and investment vehicle, a reflection of wealth in that economy, a notary, a liberated, sound money and a protest - all disguised as a get rich quick scheme.
aorloff 9y ago
Because of inter-exchange protocols (FIX / FAST) to share the order book, that isn't happening with bitcoin, hence the spreads (between exchanges) and associated arbitrage opportunity.
hndamien 9y ago
I have been invested in Bitcoin since the very early days. This bull run can be explained, in fact it was predicted by many. I'd be happy to address any questions.
- hndamien 9y ago
  So no questions then.
PeterisP 9y ago
The major difference from the current equities market, as described in the fine article (the latter half of it), is that in the Bitcoin market you see common manipulative practices that are illegal and also mostly eliminated from the current equities market.
buttcoinslol 9y ago
Investing: http://www.macrotrends.net/1319/dow-jones-100-year-historical-chart http://www.macrotrends.net/1319/dow-jones-100-year-historica... Speculating: http://www.macrotrends.net/1333/historical-gold-prices-100-year-chart http://www.macrotrends.net/1333/historical-gold-prices-100-y... Which one do you think bitcoin is? Well I'll tell you, it's the second.

arcticfox 9y ago

But the stock market - in general - has ridiculously profitable and powerful entities behind it. No matter what happens to investor confidence, ownership of Apple is going to be very valuable because they generate a ridiculous amount of profit. Cryptos, on the other hand, are entirely based on investor confidence.

Cakez0r 9y ago
It's not a given that Apple will continue to generate insane profit. Apple will remain very valuable because it has tangible assets that can be sold (book value). So with a total lack of investor confidence, the price floor of Apple shares should be book value - debts. Cryptocurrencies aren't backed by tangible assets, so the price floor is 0.
- twelve40 9y ago
  I'm not sure a neat definition of a price floor always holds in practice. Wasn't Yahoo at some point valued less than their tangible assets/stake in Alibaba?
- baddox 9y ago
  I suspect that it’s a bad idea to make investments based on how high the cost floor of the investment is.
victor106 9y ago
Cryptos imho are equal to gold not stocks

cdoxsey 9y ago

Investing actually achieves something. When I make an investment in a company I'm providing capital that that company can use in various ways. In return I become an (very small) owner of the company. I get a say in how it's run (voting rights), and I get a share of the profit (in dividends). If you hold on to a stock like coca cola for 30 years, never looking at the stock price, and never sell, you'll actually make money. Yes there's risk, coca cola could go out of business. But that's pretty unlikely, and if you're not willing to take that risk, consider using a diversification strategy. Buy some passively managed ETFs. Even with the crisis, in the long run, you would've made money. Investing is not gambling, it's not a zero sum game and the fundamentals of it have some basis in reality. Whatever is happening with Bitcoin right now makes no sense. Eventually things like this have to realign with reality.

AznHisoka 9y ago
1. the stock market, other than the IPO is a secondary market. You are not providing capital to the company but just paying another trader for his shares. 2. The majority of stocks do not provide (and will never) dividends and the majority of buyers have no voting rights. but you are right. For practical purposes, the stock market is not pure gambling. There are institutions that make it legitimate. Such as the SEC, pensions, 401ks and brokerage firms. And the fact the government cares so much about it going up (because it funds so many pensions and social security might go away) But lets not fool ourselves in thinking the stock market is a virtuous piece of infrastructure. The vast majority of stock holders dont know anything about the conpanies they invest nor how stocks even work. They invest blindly in it through mutual funds or 401ks.
- hndamien 9y ago
  This isn't entirely true. If secondary market trades increase the value of the stock then the company can sell some of their stock to get more funding, or can borrow at better terms. Similarly, buying and holding Bitcoin has a range of effects that help the network and generate real wealth. Bitcoin is a services company, a payment network, a bank, and investment vehicle, a reflection of wealth in that economy, a notary, a liberated, sound money and a protest - all disguised as a get rich quick scheme.

aorloff 9y ago

Because of inter-exchange protocols (FIX / FAST) to share the order book, that isn't happening with bitcoin, hence the spreads (between exchanges) and associated arbitrage opportunity.

hndamien 9y ago

I have been invested in Bitcoin since the very early days. This bull run can be explained, in fact it was predicted by many. I'd be happy to address any questions.

hndamien 9y ago
So no questions then.

PeterisP 9y ago

The major difference from the current equities market, as described in the fine article (the latter half of it), is that in the Bitcoin market you see common manipulative practices that are illegal and also mostly eliminated from the current equities market.

buttcoinslol 9y ago

Investing: http://www.macrotrends.net/1319/dow-jones-100-year-historical-chart http://www.macrotrends.net/1319/dow-jones-100-year-historica... Speculating: http://www.macrotrends.net/1333/historical-gold-prices-100-year-chart http://www.macrotrends.net/1333/historical-gold-prices-100-y... Which one do you think bitcoin is? Well I'll tell you, it's the second.