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Copying a comment I made a few days ago that applies to this thread as well: I was just discussing Bitcoin 'investing' with a client last week and one of his e

by a2tech 5y ago

Copying a comment I made a few days ago that applies to this thread as well: I was just discussing Bitcoin 'investing' with a client last week and one of his engineers overheard us and told us a friend of his (another fresh Lebanese immigrant) maxes out his credit cards on the first of the month buying bitcoin, then sells it on the last day of the month and pays off the credit card and pockets the difference. I just...had no response to that. It seemed so obviously dangerous and irresponsible that I couldn't believe a grown adult would do that. AND THEN he told me about another friend who does the same thing--but with the tuition/living money his family scrapes together and sends him from Lebanon. To me, that was not only stupid, it was a staggering betrayal in trust. Imagine your entire family scrimping and scraping to get money together to send you to college in the US and then you just casually betting it on Bitcoin.

senectus1 5y ago
I mean yeah your points I agree with. horrifying. but the problem i think (hope) is only a small one. isolated people doing silly things. At least its not hiding behind the might of massive banks and being sold as prime stock.
nannal 5y ago
That sounds quite a lot like a gambling problem, the same people could perform the same action with any other asset.
ur-whale 5y ago
> I couldn't believe a grown adult would do that. Much depends on his age and family situation. If he's young, single, able-bodied and with no debt, why not? He can always take a night job at a micky dee's to pay back the credit card debt. It's a gamble I would have taken in my 20s. Way better odds than going to Vegas and same thrill.
motohagiography 5y ago
If your credit card has a low maximum (say $2k), and you don't pay interest on the balance you pay off every month, your downside risk is having to pay the card interest, and your upside is passive currency exchange income. Your acquaintence is going to be very wealthy. Not from this trade, but from the instinct to see the leverage opportunity and take that risk. Sure, bitcoin could go to a small fraction of what it's trading at, and he is out $2k minus whatever he netted on the leveraged trading. The cost to account for it properly outweighs any profits at that level, but it's a scrappy trade by someone who saw the opportunity. As someone who still mainly makes money with labour, I was impressed anyway.
- lostmsu 5y ago
  > the instinct to see the leverage opportunity What leverage opportunity? He's gonna lose big on any prolonged downward trend.

by a2tech 5y ago

senectus1 5y ago

I mean yeah your points I agree with. horrifying. but the problem i think (hope) is only a small one. isolated people doing silly things. At least its not hiding behind the might of massive banks and being sold as prime stock.

nannal 5y ago

That sounds quite a lot like a gambling problem, the same people could perform the same action with any other asset.

ur-whale 5y ago

> I couldn't believe a grown adult would do that. Much depends on his age and family situation. If he's young, single, able-bodied and with no debt, why not? He can always take a night job at a micky dee's to pay back the credit card debt. It's a gamble I would have taken in my 20s. Way better odds than going to Vegas and same thrill.

motohagiography 5y ago

If your credit card has a low maximum (say $2k), and you don't pay interest on the balance you pay off every month, your downside risk is having to pay the card interest, and your upside is passive currency exchange income. Your acquaintence is going to be very wealthy. Not from this trade, but from the instinct to see the leverage opportunity and take that risk. Sure, bitcoin could go to a small fraction of what it's trading at, and he is out $2k minus whatever he netted on the leveraged trading. The cost to account for it properly outweighs any profits at that level, but it's a scrappy trade by someone who saw the opportunity. As someone who still mainly makes money with labour, I was impressed anyway.

lostmsu 5y ago
> the instinct to see the leverage opportunity What leverage opportunity? He's gonna lose big on any prolonged downward trend.