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More than half of Bitcoin investors are in the red, study says
- LorenPechtel 5y agoWell, duh! Bitcoin produces nothing, it shouldn't really be called an investment in the first place. Look at the other "investment" that people like: gold. Likewise, it does very badly for most buyers.
- Zhenya 5y agoInvestors… more like get rich quick dreamers pumped by celebrities with little or no underlying knowledge of the tech or economics.
- deleted 5y ago[deleted]
- logicalmonster 5y agoMaking quite a few assumptions there.
- labster 5y agoYeah, a lot of people use BTC for money laundering too! What about their losses?
- inter_netuser 5y agoPutin, a "get rich quick dreamer pumped by celebrities with little or no underlying knowledge of the tech or economics" Just announced he will back Bitcoin mining in Russia: https://bitcoinmagazine.com/business/putin-backs-bitcoin-mining-in-russia-report https://bitcoinmagazine.com/business/putin-backs-bitcoin-min...
- arcticbull 5y agoInteresting that supporters of the currency of freedom and the future rush in to flutter their eyelashes at any oligarch and dictator that looks their way from across the bar. [edit] Well if Vladdy-P - 16 year veteran of the KGB - is doing it then I guess I must have been wrong this whole time. Thank you for setting me straight. WAGMI.
- inter_netuser 5y agoEven more interesting that some people think Putin is an easily swindled dreamer. Criminals usually lead technology adoption, as they don't have any moral or legal constaints, real or imagined.
- arcticbull 5y ago> Even more interesting that some people think Putin is an easily swindled dreamer. I didn't say that at all. I maintain he doesn't support the espoused goals of advocates. > Criminals usually lead technology adoption, as they don't have any moral or legal constaints, real or imagined. That doesn't mean it's for the better, though, haha. Just pointing at the times that it did would be a form of survivorship bias. Criminals were quick to adopt fentanyl, human trafficking, and shooting your business rivals after all. Let's face it, Putin's goal is to harm the west. So you could say his adoption of this technology is likely to undermine the west. Whether that's directly through the adoption of the technology or the perception it creates.
- axiomsEnd 5y agoHe allows it in his country, which has a lot of fossil fuels and a giant, unusable freezer called Siberia. This is a nice PR move, and a good way to get some money from hard to track sources, which may be a good idea if you are trying to start a war, but it doesn't mean that Putin is good sources of inspiration.
- inter_netuser 5y agoToday, the reserve currency is USD, and if you settle international trade, you have to deal with the US financial system. What does Putin (and many others) gain, if he no longer has to do that for international trade?
- arcticbull 5y agoExcept he does, because the only trading partner he has is El Salvador lol and even they only have a few bucks of reserves.
- disruptalot 5y ago> By collating all such timestamps, Ndinga’s firm can aggregate the cost basis for every bitcoin transaction on record. If i'm understanding the methodology here, the assertion that it translates to investors is really flawed. You can't assume: - a transaction appearing on chain constitutes a buy - that the transaction represents 1 investor - that 1 investor = 1 address
- tomrod 5y agoSure you can. Whatever those transactions of bitcoin represented to the buyer and seller, they were worth a certain value on a certain exchange at a certain time. That has a different value on a certain exchange now, hence the evaluation of a delta. Whether the bitcoin holder sees it as a loss of value is beside the point, since purchasing in bitcoin is hard still. It's like using Euros in the US. Some folks accept them, but generally dollars are preferred.
- kkjjkgjjgg 5y agoMost Bitcoin trades don't even register on the blockchain. And not every transferal on the blockchain is an investment. What a silly methodology.
- tomrod 5y agoAnd used all the time for Forex, no? Currency transfers need not be tracked to happen either? Yet we can still say how strong the yen is relative to the peso.
- randomhodler84 5y agoIt’s a dumb methodology; I’ll give you an example, I bought at BTC $36k last month and just withdrew it from exchange after all the fiat cleared in from the legacy banking channel today. It hit the chain when BTC was $42k, so these jokers would think the cost was 42. You can’t get an accurate picture from on chain data alone.
- 300bps 5y agoSpeaking as someone who mined BTC profitably with a GPU and has my ETH mining rig churning away with gminer on flexpool.io right now, I sell everything I mine as soon as I get it. I see no legitimate utility in it. It has enabled scourges on society like ransomware, wasted massive amounts of energy. web3 is based on the false premise that people want to make 100 decisions per day to pay half a cent to read someone’s blog. Big money NFTs are generally just a simple tax scam. Person X makes 10 NFTs, sells one to Person Y for $10,000. Donate the 9 remaining for a $90,000 write-off. Person Y does the same thing making 10 NFTs, selling one to Person X for $10,000. No money changes hands and only one losing out are other taxpayers. Other people see NFTs selling for big bucks and start buying them too thinking they’re investing rather than misunderstanding the scam. The most ridiculous claim I see repeated now is that blockchains like BSV will replace cloud services like AWS. I’ve spent many years making a modest amount of money with it; I just see all of it as just nonsense.
- lupire 5y agoDoes IRS actually accept these NFT valuations as deductions?
- deleted 5y ago[deleted]
- choward 5y agoInteresting tax evasion idea but the thing I don't get is who they would donate it to. Would they set up some fake non-profit? Otherwise who would take it? I'm sure the first thing a non profit would do is try to sell it to convert it to real money and then realize it's worthless and they didn't just get a $90,000 donation.
- 300bps 5y agoThere are 1.6 million tax exempt 501c3 organizations in the U.S. They range from major multibillion dollar charities to dudes who spent a few hours completing paperwork.
- 5y ago
- rvz 5y agoI mean, it's not really a surprise [0] when you have lots of people expecting BTC to 100K by 2021 and then buying BTC at $69K and holding it all the way down. Then they end up thinking that DOGE will be over $1 by the end of August 2021 and betting $10K with random people that it will happen. Well [1]. It's no wonder they are all in the red. [0] https://news.ycombinator.com/item?id=27206314 https://news.ycombinator.com/item?id=27206314 [1] https://news.ycombinator.com/item?id=27046019 https://news.ycombinator.com/item?id=27046019
- echelon 5y agoMaybe this will be the last hurrah as the retail investors have been bitten and will sour on future prospects? Once everyone that would buy into crypto does at least once, then loses their shirt, there won't be anyone new to sucker back in anymore. Maybe we're at that point now?
- arcticbull 5y ago> Maybe this will be the last hurrah as the retail investors have been bitten and will sour on future prospects? I wish, but I suspect the end is not yet upon us. It's become a religion. Remember, Herbalife has similar economics, and that did not go well for Ackman.
- chrononaut 5y ago> I'd actually be willing to bet 10k USD with you that by end of August Doge will still be over $1.00. You should've taken that bet! ;) (Looks like it was somewhere between $0.58 and $0.68 at the time of that comment, and $0.29 at the time of the conclusion of the hypothetical bet)
- KasianFranks 5y agoTo keep things in perspective, twitter (TWTR) is trading below its IPO price.
- hamiltonians 5y agoand silver investors from 1980 still deeply red on inflation adjusted basis
- arcticbull 5y agoOk, but Twitter is a company with intrinsic value? Not all equities will be a good investment but equities in aggregate are positive sum. Cryptocurrencies are negative sum or zero sum depending on consensus mechanism.
- ch0wn 5y agoI have yet to see someone argue that TWTR is the future of money and will replace gold.
- Bayart 5y agoGold has rarely been a particularly profitable asset.
- choward 5y agoThat's because it's really just a standard commodity.
- thoughtstheseus 5y agoYou buy it for its negative or low correlation to other assets. It’s a non-productive asset. Easily marketable and convertible to other assets.
- rafale 5y agoIt has an intrinsic value that can easily be explained. You absolutely need it for many uses (electronics, medical devices, jewelry in practice, ...). So there is always gonna be a buyer at a non-zero price. Bitcoin, on the other hand, has a few things going for it (fixed monetary policy, decentralization, permissionless, ...) but I am not sure about the intrinsic value. The only thing that I can think of is its network effect and derived amazing hash power that secures it. You can't recreate that easily in a new cryptocurrency.
- hamiltonians 5y agoit goes to show if you want to get rich fast you need to be early and not succumb to hype.
- shrimpx 5y agoThe claim in this headline is almost as trivial to guess as "100% investors are in the green" when bitcoin is at ATH.
- ipnon 5y agoWouldn't it be expected for people in profit and people in loss to converge 50/50 as amount of trading increases? If it was a guranteed profit, everyone would pile in. If it was guaranteed loss, everyone would leave. The middle point represents the fact that no one can truly predict the future price accurately.
- chii 5y agothat assumes that the competency of all the participants are relatively similar, and thus, the trades on average net out zero profit for everyone. That's not what i would observe empirically - like intelligence or athletic distributions, the distribution of competency in this arena is probably like a long tail, with a few people making the most profits and a lot of people losing out.
- jallen_dot_dev 5y agoNot really, because not all people trade the same amount and not all trading happens equally distributed at all price levels. You can have relatively few winners leave the larger majority holding the bag.
- aaaaaaaaata 5y agoIt's not that trivial — they're telling you it's a great time to buy.
- arcticbull 5y agoPast performance != future performance. Bitcoin is down 18% on a real dollar 1-year basis, during the most inflationary period since the 80s, and has underperformed the NASDAQ for much of the last 4 years. - End of 2017, BTC hit 19K. Today, it's 42K. That's 2.2X! - End of 2017, QQQ hit $150, today it's $345. That's 2.3X. - End of 2017, TQQQ hit $11. Today its $53. That's 4.8X.
- robbrown451 5y agoThis is unsurprising. The cost to mine it is lost.... that isn't coming back. So it is a supremely negative sum game. Clearly a lot more money has been lost than made, and that which has been made is essentially borrowed from the future.
- jollybean 5y agoThe term you are looking for is 'sunk cost'. Also, I'll bet more money has been made, but rather it's been concentrated among some of the earlier cohorts of owners.
- chii 5y agothe cost to mine is a separate cost to the lost money in trading. The cost to mine is somewhat "fixed" - and tbh, a miner would not choose to lose money to mine, but just stop mining if their source of electricity is too high for profit. The trade losses are speculative losses, and it comes from the "wins" that someone else on the other side of the trade.
- robbrown451 5y agoYes of course. But the point is that it costs a lot to mine, and that is subtracted from any profits made.
- fastball 5y agoBut Bitcoin has appreciated in value, from < $1 to $42,000. In other words, Bitcoin has a market cap of ~$800B, so for Bitcoin as a whole to be "supremely negative sum" as you say, Bitcoin mining hardware would need to have cost > $800B, which seems... unlikely.
- robbrown451 5y agoBut where did the money come from to create an $800B market cap? It came out of investor's pockets. The early ones might have made more money than they lost, but the later ones lost money.
- anshumankmr 5y agoTo be fair in any speculative way to earn money, a lot of people are in the red. I lost of fair deal of money myself, in stocks.
- thematrixturtle 5y agoStocks reflect the actual economy and over the long term go up around 8% per year. Bitcoin reflects nothing except Bitcoin itself.
- bmitc 5y ago> Stocks reflect the actual economy Is there a source for that?
- arcticbull 5y agoYeah, it's not the actual economy. But indexes that track the S&P or NASDAQ track a selection of the best of the economy and are performing very well.
- thematrixturtle 5y agoAt the end of the day stocks represent shares in actual companies that make profits and losses. Obviously this doesn't prevent speculative bubbles (exhibit A: GME), but sooner or later the tide goes out and we'll find out who's been swimming naked.
- elorant 5y agoIf that's true it means that all those people got in while Bitcoin was north of $50k. Which is ridiculous. What were they expecting, to reach a fucking million each?
- abacadaba 5y agogive it time
- DanTheManPR 5y agoWell of course, there has to be bagholders
- deleted 5y ago[deleted]
- chrisma0 5y agoThe data these statements are based on seem dubious? Or is that just me? > if you bought in 2014, we would know that [someone] bought at 5pm CDT But if I bought BTC on an exchange, e.g. Coinbase, then that purchase would not necessarily be recorded on the blockchain, right? Just CB internally updating a value in their DB. All BTC buying and trading would be a larger superset of the collected data. Also if I transfer 1 BTC from one of my wallets to another, then that counts as a buy/sell transaction for this dataset!
- chrisco255 5y agoUnreliable garbage data. It also implies that Bitcoin, at the range between $42K (current price) and $65K (all time high), gained half its user base, they were all first time purchases, and yet despite all that growth and buying, and division of liquidity, the price still fell 30%.
- Proven 5y ago
- Animats 5y agoWell, of course. It's zero-sum. For everyone who gets fiat out, there has to be someone who put fiat in. The way they measured this may not be meaningful, though.
- thematrixturtle 5y agoNegative-sum, actually, since the costs of building and operating the mining hardware are massive and have to be paid for by fiat.
- remmargorp64 5y agoNot necessarily. There are situations, for example, where energy that would otherwise be completely wasted is being used to mine BTC. For example: https://www.cnbc.com/2022/02/12/23-year-old-texans-made-4-million-mining-bitcoin-off-flared-natural-gas.html https://www.cnbc.com/2022/02/12/23-year-old-texans-made-4-mi...
- halpert 5y agoThe amount of fiat available, and it’s value is not constant so it’s not really zero sum.
- cam0 5y agoThis is a snapshot statistic that is rather shallow. The more interesting point is the distribution of wealth in BTC. The majority of "investors" are scrounging to buy a fraction of a single bitcoin, while wealthy VCs, family offices, LLCs, etc etc are owners and are continual buyers of hundreds and thousands of bitcoins. Just think about how much BTC the Winklevoss brothers alone must own, and then add just two more people - Marc Andreesen and Chris Dixon. I'd love to know how much BTC these four men alone are in possession of...
- tacosbane 5y agogiven that bitcoin is no longer a currency and its lack of liquidity, i'd say you're in the red until the moment you exit for more than your original position