6 ms·

Which is why maybe it’s a good investment? I always buy cheap stocks because I know people feel like it’s more affordable, and has potential for larger returns,

by baby 6y ago

Which is why maybe it’s a good investment? I always buy cheap stocks because I know people feel like it’s more affordable, and has potential for larger returns, even if it ‘s not true.

cwkoss 6y ago
The dollar price of a single unit of any tradable security-like thing is completely arbitrary: market cap, market depth and inherent value are all that really matter. Cheaper units are almost certainly not indicative of something being a better investment, I'd say the opposite is more often true: ex. penny stocks or any of the long-tail cryptocurrencies that trade at fractions of a penny.
- chihuahua 6y ago
  I mostly agree with what you're saying. But there is another aspect to this, based on the "greater fool" theory of investing. A lower-priced stock or cryptocurrency could be more likely to attract a larger number of unsophisticated buyers (Robinhood customers etc.) Especially for low-priced cryptocurrency, the marketing pitch of "it's like bitcoin for $1" could be very appealing, if you spread it on Reddit and other forums. So from a pump-and-dump perspective it may be more promising.
  - enoughBadMath 6y ago
    It's not like Bitcoin.
  - sellyme 6y ago
    > Especially for low-priced cryptocurrency, the marketing pitch of "it's like bitcoin for $1" could be very appealing, if you spread it on Reddit and other forums. If you went back a decade in time while you were at it, maybe. But there's been such a relentless tide of cryptocurrency-related scams being spammed on forum boards since Bitcoin hit popular awareness that the only thing I can think of that would be less appealing is someone trying to flog discount pharmaceuticals.
- user-the-name 6y ago
  In cryptocurrencies, "market cap" is basically a complete fiction, and totally nonsensical.
freeone3000 6y ago
Bitcoin is infinitely divisible. You can buy $50 of Bitcoin, if you want to invest $50. The "affordability" doesn't enter here.
- SpaceRaccoon 6y ago
  It's not the affordability, it's the leverage. A $1 increase on a $1 investment is already a 100% return. And it's much easier to imagine a coin to go from $1 to $2 then it is to go from $20k to $40k.
- newerduder 6y ago
  > Bitcoin is infinitely divisible no. it goes down to 8 decimal places. (a satoshi)

by baby 6y ago

Which is why maybe it’s a good investment? I always buy cheap stocks because I know people feel like it’s more affordable, and has potential for larger returns, even if it ‘s not true.

cwkoss 6y ago

The dollar price of a single unit of any tradable security-like thing is completely arbitrary: market cap, market depth and inherent value are all that really matter. Cheaper units are almost certainly not indicative of something being a better investment, I'd say the opposite is more often true: ex. penny stocks or any of the long-tail cryptocurrencies that trade at fractions of a penny.

chihuahua 6y ago
I mostly agree with what you're saying. But there is another aspect to this, based on the "greater fool" theory of investing. A lower-priced stock or cryptocurrency could be more likely to attract a larger number of unsophisticated buyers (Robinhood customers etc.) Especially for low-priced cryptocurrency, the marketing pitch of "it's like bitcoin for $1" could be very appealing, if you spread it on Reddit and other forums. So from a pump-and-dump perspective it may be more promising.
- enoughBadMath 6y ago
  It's not like Bitcoin.
- sellyme 6y ago
  > Especially for low-priced cryptocurrency, the marketing pitch of "it's like bitcoin for $1" could be very appealing, if you spread it on Reddit and other forums. If you went back a decade in time while you were at it, maybe. But there's been such a relentless tide of cryptocurrency-related scams being spammed on forum boards since Bitcoin hit popular awareness that the only thing I can think of that would be less appealing is someone trying to flog discount pharmaceuticals.
user-the-name 6y ago
In cryptocurrencies, "market cap" is basically a complete fiction, and totally nonsensical.

freeone3000 6y ago

Bitcoin is infinitely divisible. You can buy $50 of Bitcoin, if you want to invest $50. The "affordability" doesn't enter here.

SpaceRaccoon 6y ago
It's not the affordability, it's the leverage. A $1 increase on a $1 investment is already a 100% return. And it's much easier to imagine a coin to go from $1 to $2 then it is to go from $20k to $40k.
newerduder 6y ago
> Bitcoin is infinitely divisible no. it goes down to 8 decimal places. (a satoshi)