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You already stated it yourself: He has lost $125, until he sells. That is an average negative. Money in: $50+$75+$100+$125 Money out: $50+$75+$100-3*fees You

You already stated it yourself: He has lost $125, until he sells. That is an average negative. Money in: $50+$75+$100+$125 Money out: $50+$75+$100-3*fees You can continue this chain indefinitely, and the missing final term will get smaller and smaller in relation to the total. The limit of (money out - money in) / transactions goes to simply minus the average cost of the fees. So, a net negative.

perl4ever 5y ago
>He has lost $125, until he sells Everyone who owns an asset is not selling it at this exact moment, so it is worth nothing and there is a 100% loss according to you? This is a possible definition of "loss", but I think it's clearly non-standard, and not useful. You can't just pretend that's what other people mean when they talk about losses.
- user-the-name 5y ago
  Read the rest of the comment, please. This has no effect on the outcome of the calculation if the trading continues over a longer time.
lexapro 5y ago
He has "lost" $125 but gained the crypto, which might be worth more than $125 if the market goes up.
mrtranscendence 5y ago
I was responding to the proposition that people will, on average, lose money trading crypto. I guess it depends on what you're averaging over, but I took it to mean people, not money, and in that interpretation people could on average earn money.
- user-the-name 5y ago
  The average of the sum of money gained or lost by each individual person is negative. Whether a larger number of people gain any amount money than those that lose any amount of money is less easy to analyse, but, given that a person can only lose 100% of their money (not taking into account massively unwise loans people might take out, for simplicity) but some people do gain much more than 100%, it is likely that average person has lost or will lose money.
  - mrtranscendence 5y ago
    > given that a person can only lose 100% of their money [...] but some people do gain much more than 100%, it is likely that average person has lost or will lose money. But with a long enough time horizon and generally rising prices, we can make the probability of any one person losing money as close as we want to zero. For a given unit of crypto only the last person in its chain of buyers loses money, left holding it when prices finally drop.
    - user-the-name 5y ago
      That is not something that happens in reality.

perl4ever 5y ago

>He has lost $125, until he sells Everyone who owns an asset is not selling it at this exact moment, so it is worth nothing and there is a 100% loss according to you? This is a possible definition of "loss", but I think it's clearly non-standard, and not useful. You can't just pretend that's what other people mean when they talk about losses.

user-the-name 5y ago
Read the rest of the comment, please. This has no effect on the outcome of the calculation if the trading continues over a longer time.

lexapro 5y ago

He has "lost" $125 but gained the crypto, which might be worth more than $125 if the market goes up.

mrtranscendence 5y ago

I was responding to the proposition that people will, on average, lose money trading crypto. I guess it depends on what you're averaging over, but I took it to mean people, not money, and in that interpretation people could on average earn money.

user-the-name 5y ago
The average of the sum of money gained or lost by each individual person is negative. Whether a larger number of people gain any amount money than those that lose any amount of money is less easy to analyse, but, given that a person can only lose 100% of their money (not taking into account massively unwise loans people might take out, for simplicity) but some people do gain much more than 100%, it is likely that average person has lost or will lose money.
- mrtranscendence 5y ago
  > given that a person can only lose 100% of their money [...] but some people do gain much more than 100%, it is likely that average person has lost or will lose money. But with a long enough time horizon and generally rising prices, we can make the probability of any one person losing money as close as we want to zero. For a given unit of crypto only the last person in its chain of buyers loses money, left holding it when prices finally drop.
  - user-the-name 5y ago
    That is not something that happens in reality.