5 ms·

Most situations aren’t black and white. Crypto (in particular Bitcoin) is an investment asset. Every asset comes with risks. The way to adjust for the risk is t

Most situations aren’t black and white. Crypto (in particular Bitcoin) is an investment asset. Every asset comes with risks. The way to adjust for the risk is to have the right proportion of your investment into the asset. It’s the same for gold, equity or any other investment instrument.

graeme 6y ago
If there were no investor protections then anyone following this “just put a bit into different things” strategy would get hosed by scams. It only works because investment laws keep out most grifters from raising funds. Bitcoin isn’t a typical investment instrument in that sense, so I’m not sure applying the same heuristic works.
- Calamity 6y ago
  Your comment actually embodies one of the most ironic parts of this whole fiasco: Bitcoin, which is purported as the anti-fed/anti-government savior of the future world economy (maybe I'm exaggerating a bit, but I don't think I'm too far off the mark), is ultimately going to serve as one of the best examples of exactly "why" we have regulation and oversight in the first place.
  - graeme 6y ago
    Kgwgk put it better than me I think, with their examples of diversification across bad asset classes. Also a thought occurs. Many people reading this will think “but these cynics are mistaken. Those who invested in bitcoin have seen massive returns”. Not so. The paper value of bitcoin is up, but unlike a stock, you don’t own anything. You need someone to actually buy the bitcoin in order to gain value. Whereas as long as a company has profits, there’s a floor on things. The shares will have real use value so the price can’t fall too low. Meaning buy bitcoin at $200, own now at $41,000. Only has value if you sell. If everyone tries to sell and no one is buying there’s no floor, none. Whereas bought Apple at $20, own at $132. The price could fall, but there’s some kind of floor below which it could not fall based on current profits and dividends, and that floor is almost certainly above $32.
    - deleted 6y ago
      [deleted]
kgwgk 6y ago
The key is diversification! You put part of your fortune in bitcoin, part in ethereum, part in dogecoin, part in beanie babies, part in baseball cards, part in fine wines, part in vintage comic books, part in tulips...
- paulryanrogers 6y ago
  Durability of tulips is suspect. And some bitcoin miners are stealing electricity in the third world. So maybe double down on the surer bets like Dogecoin.
  - arcticbull 6y ago
    Or beanie babies! They don't make them anymore so you've got scarcity built right in. Each one of the same type is fungible. I suggest you convert your corporate balance sheet over to beanie babies immediately for maximum gains.
  - ada1981 6y ago
    Folks grandfathered into the Tesla supercharger network can set up a sweet trunk mining rig...
- tchalla 6y ago
  Let’s try it your way. You can put 1% of your fortune in all those assets you mentioned. Hopefully, you will see the point in trying to make about asset allocation. On a side note, sarcasm and snark don’t aid better understanding in a discussion. I appreciate your point but it would be better made being direct.

graeme 6y ago

If there were no investor protections then anyone following this “just put a bit into different things” strategy would get hosed by scams. It only works because investment laws keep out most grifters from raising funds. Bitcoin isn’t a typical investment instrument in that sense, so I’m not sure applying the same heuristic works.

Calamity 6y ago
Your comment actually embodies one of the most ironic parts of this whole fiasco: Bitcoin, which is purported as the anti-fed/anti-government savior of the future world economy (maybe I'm exaggerating a bit, but I don't think I'm too far off the mark), is ultimately going to serve as one of the best examples of exactly "why" we have regulation and oversight in the first place.
- graeme 6y ago
  Kgwgk put it better than me I think, with their examples of diversification across bad asset classes. Also a thought occurs. Many people reading this will think “but these cynics are mistaken. Those who invested in bitcoin have seen massive returns”. Not so. The paper value of bitcoin is up, but unlike a stock, you don’t own anything. You need someone to actually buy the bitcoin in order to gain value. Whereas as long as a company has profits, there’s a floor on things. The shares will have real use value so the price can’t fall too low. Meaning buy bitcoin at $200, own now at $41,000. Only has value if you sell. If everyone tries to sell and no one is buying there’s no floor, none. Whereas bought Apple at $20, own at $132. The price could fall, but there’s some kind of floor below which it could not fall based on current profits and dividends, and that floor is almost certainly above $32.
  - deleted 6y ago
    [deleted]

kgwgk 6y ago

The key is diversification! You put part of your fortune in bitcoin, part in ethereum, part in dogecoin, part in beanie babies, part in baseball cards, part in fine wines, part in vintage comic books, part in tulips...

paulryanrogers 6y ago
Durability of tulips is suspect. And some bitcoin miners are stealing electricity in the third world. So maybe double down on the surer bets like Dogecoin.
- arcticbull 6y ago
  Or beanie babies! They don't make them anymore so you've got scarcity built right in. Each one of the same type is fungible. I suggest you convert your corporate balance sheet over to beanie babies immediately for maximum gains.
- ada1981 6y ago
  Folks grandfathered into the Tesla supercharger network can set up a sweet trunk mining rig...
tchalla 6y ago
Let’s try it your way. You can put 1% of your fortune in all those assets you mentioned. Hopefully, you will see the point in trying to make about asset allocation. On a side note, sarcasm and snark don’t aid better understanding in a discussion. I appreciate your point but it would be better made being direct.