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I'm really perplexed as to why people would not want to buy into market tracking ETFs or Blue chips that pay dividends. For a young person a portfolio of this n

I'm really perplexed as to why people would not want to buy into market tracking ETFs or Blue chips that pay dividends. For a young person a portfolio of this nature provides a healthy amount of risk while having historically good returns. The crypto crazy is not regulated and extremely volatile, I can't quite see how people are referring to it as an "investment" when there's not a great way of computing intrinsic value as analysts do with company valuations.

lykr0n 9y ago
Because 500% gains look better than 10%, until you factor in the risk. Coinbase and Robinhood make it easy for people to get into the crypto game without understanding the risks. They see the big returns, and think the train won't stop until after they get off. ETFs are graded from a 1 to a 5 for risk. Crypto goes well beyond that scale. I think it comes down to our nature to take $10 today and not $50 next year. It's hard to send 10% of your income to a 401k knowing that that money is locked away for another 40 years. This will, I think, naturally cause people to dump money into stuff like Crypto; the line is going up and stories abound of people turning $1k into $100k. Nobody reads beyond the headline to find out that they held over years. There is no warning on Coinbase saying "hey. you should not due this to the extreme volatility" for any transaction over $500. And when you hit ok, you are asked again "You realize that there is a good chance that you will lose this money?". Coinbase (and I'm not picking on them, but they are the only ones I know) don't care. They want the commission. Schwab, what I use, has a feature that says "Yo. You got some F Grade stocks. You ... You shouldn't do that unless you really know what you are doing."
- cwperkins 9y ago
  Crypto has actually made me had a phase-shift in my feelings towards capitalism in general. I think a healthy amount of inequality and competition need to exist for an innovative and inventive society. Crypto has taught me that it's really just human nature to want a get-rich-quick scheme and retire younger than 30 years old. The funny thing I find in all of this is that if someone purely believes crypto is the future, then exchange rates back to fiat currency wouldn't matter. This crash has taught me that all crypto people care about is the ratio to USD and that to me proves that people have faith in the Dollar.
  - lykr0n 9y ago
    It's a libertarian free-market experiment. I think the fundamental problem of crypto is that it is finite and quickly centralizes. Which, is the exact opposite of what the initial goal was. Bitcoin Lightning further centralizes the ecosystem. Etherum fixed bitcoins problem, but the underlying idea of a finite resource, to me, dooms it to failure. If I horde my stash, eventually the value will sky rocket due to limited demand. See the GPU market, which I think is an ironic analogy. Until people start taking BTC/ETH through the chain, you have covert to FIAT somewhere, which renders the initial goal obsolete. I can't take ETH for my business because I pay my suppliers with USD. FIAT currency, using the greenback as an example, works because we have the Fed making sure the liquidity remains constant to ensure stable value. If I horde USD under my mattress, and I have enough to affect global liquidity, the Fed would release more greenbacks on to the market to make sure the economy keeps moving and the price doesn't fluxuate too much. I start to use my stash, the Fed will soak up some of it to reduce liquidity. Crypto, by its nature, doesn't have this. Crypto is trying to be the new Gold, but Gold doesn't have much place in our global economy any more. Nobody is conducting trades with a volatile mediums anymore. There is a reason that nobody* is on the gold standard. I don't know enough to say why. I think we might be able to revisit the idea of crypto in a couple of years as a viable currency in a couple of years, but we have to wait a long period of stability or some serious evolution. I have no faith in a currency that doesn't have some banking capabilities. The communist ideal is a society where inequality doesn't exist. A perfect social paradise, but as you point out, this is not in human nature. Most people will try and hold on to any power that they can get. I like to think that I'm not like this, but that would be naïve of me. We advance because we see that new car and want it.
    - cwperkins 9y ago
      I agree that I may be bullish on long-long-term prospects. One of my gripes from the get-go was that even though Crypto was not intentionally exclusive as anyone anonymously anywhere in the world could create a Bitcoin wallet, it is intended for the more tech-savvy crowd. This excludes people like my parents and grand-parents who have used cash for a lifetime or plastic digital currency. I also believe a central monetary agency and a regulatory agency are vital to an economy to keep it from getting out-of-hand. The reason for my phase shift in thinking, is really applying the principal of greed I see here to other industries such as pharmaceuticals. I admit that I am not an expert in Pharmaceuticals, but I have to believe that these big pharma companies are altruistic and can only justify high prices by investing in high-risk, high-reward studies to find cures for ailments that are currently not treatable. I believe there exist good people in every industry, but the age-old notion of "one rotten apple spoils the whole barrow", remains more relevant than ever. Disclosure: I have formerly worked in Prime Brokerage Tech at Goldman Sachs and an HFT focused on the US Muni and Corporate Bond market. Currently in wine tech though ;)

lykr0n 9y ago

Because 500% gains look better than 10%, until you factor in the risk. Coinbase and Robinhood make it easy for people to get into the crypto game without understanding the risks. They see the big returns, and think the train won't stop until after they get off. ETFs are graded from a 1 to a 5 for risk. Crypto goes well beyond that scale. I think it comes down to our nature to take $10 today and not $50 next year. It's hard to send 10% of your income to a 401k knowing that that money is locked away for another 40 years. This will, I think, naturally cause people to dump money into stuff like Crypto; the line is going up and stories abound of people turning $1k into $100k. Nobody reads beyond the headline to find out that they held over years. There is no warning on Coinbase saying "hey. you should not due this to the extreme volatility" for any transaction over $500. And when you hit ok, you are asked again "You realize that there is a good chance that you will lose this money?". Coinbase (and I'm not picking on them, but they are the only ones I know) don't care. They want the commission. Schwab, what I use, has a feature that says "Yo. You got some F Grade stocks. You ... You shouldn't do that unless you really know what you are doing."

cwperkins 9y ago
Crypto has actually made me had a phase-shift in my feelings towards capitalism in general. I think a healthy amount of inequality and competition need to exist for an innovative and inventive society. Crypto has taught me that it's really just human nature to want a get-rich-quick scheme and retire younger than 30 years old. The funny thing I find in all of this is that if someone purely believes crypto is the future, then exchange rates back to fiat currency wouldn't matter. This crash has taught me that all crypto people care about is the ratio to USD and that to me proves that people have faith in the Dollar.
- lykr0n 9y ago
  It's a libertarian free-market experiment. I think the fundamental problem of crypto is that it is finite and quickly centralizes. Which, is the exact opposite of what the initial goal was. Bitcoin Lightning further centralizes the ecosystem. Etherum fixed bitcoins problem, but the underlying idea of a finite resource, to me, dooms it to failure. If I horde my stash, eventually the value will sky rocket due to limited demand. See the GPU market, which I think is an ironic analogy. Until people start taking BTC/ETH through the chain, you have covert to FIAT somewhere, which renders the initial goal obsolete. I can't take ETH for my business because I pay my suppliers with USD. FIAT currency, using the greenback as an example, works because we have the Fed making sure the liquidity remains constant to ensure stable value. If I horde USD under my mattress, and I have enough to affect global liquidity, the Fed would release more greenbacks on to the market to make sure the economy keeps moving and the price doesn't fluxuate too much. I start to use my stash, the Fed will soak up some of it to reduce liquidity. Crypto, by its nature, doesn't have this. Crypto is trying to be the new Gold, but Gold doesn't have much place in our global economy any more. Nobody is conducting trades with a volatile mediums anymore. There is a reason that nobody* is on the gold standard. I don't know enough to say why. I think we might be able to revisit the idea of crypto in a couple of years as a viable currency in a couple of years, but we have to wait a long period of stability or some serious evolution. I have no faith in a currency that doesn't have some banking capabilities. The communist ideal is a society where inequality doesn't exist. A perfect social paradise, but as you point out, this is not in human nature. Most people will try and hold on to any power that they can get. I like to think that I'm not like this, but that would be naïve of me. We advance because we see that new car and want it.
  - cwperkins 9y ago
    I agree that I may be bullish on long-long-term prospects. One of my gripes from the get-go was that even though Crypto was not intentionally exclusive as anyone anonymously anywhere in the world could create a Bitcoin wallet, it is intended for the more tech-savvy crowd. This excludes people like my parents and grand-parents who have used cash for a lifetime or plastic digital currency. I also believe a central monetary agency and a regulatory agency are vital to an economy to keep it from getting out-of-hand. The reason for my phase shift in thinking, is really applying the principal of greed I see here to other industries such as pharmaceuticals. I admit that I am not an expert in Pharmaceuticals, but I have to believe that these big pharma companies are altruistic and can only justify high prices by investing in high-risk, high-reward studies to find cures for ailments that are currently not treatable. I believe there exist good people in every industry, but the age-old notion of "one rotten apple spoils the whole barrow", remains more relevant than ever. Disclosure: I have formerly worked in Prime Brokerage Tech at Goldman Sachs and an HFT focused on the US Muni and Corporate Bond market. Currently in wine tech though ;)