Discuss.
Disclosure - I am long BTC but recovered all of my original investment after a big move up 
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I read where Warren Buffet recently said he wouldnât give $25 for all the bitcoin in the world. Personally, I donât invest in stuff I donât fully understand. Bitcoin doesnât pass that test.
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I think thatâs sage advice for ANY asset.
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Many years ago I bought a small amount of Bitcoin but was required to sell it when I was living in Hawaii. I suspect Hawaii determined crypto was âillegalâ because at the time they had no way to tax income from it.
So April 11 I read that Hawaii was in the last year of a 3 year test of crypto,
I opened an account with Gemini, an exchange set up by the Winklevoss twins (Facebook developers) and bought two different cryptos and was given a small amount of Bitcoin. Total purchases were $200. After transfer fee I was at a portfolio value of about $195.
Flash forward almost a month and I am down to $117.59. A loss of about 41%. That is exactly why I didnât buy a lot, because I KNOW it is not an investment. Sure, there are people who day trade in it and loan their coins for hopefully a profit, but not me. I have fared better in my casino excursions.
Crypto at the moment is not in great shape, perhaps because (my opinion) of world events and certain overseas billionaires taking their money out after their loss of their super yachts.
I am hopeful that I may be able to recover the money before December, because we may be precluded form owning it again. News last year appears to be that it is not illegal IF the company has applied for a money transmission license. I expect Gemini had because of the following statement: âType of License: Gemini is a participant in the Hawaii Digital Currency Innovation Lab, a two-year pilot program, which terminates on December 31, 2022.â.
Then 7 days ago: HONOLULU (KHON2) â The bill that would have established a program for the licensure, regulation and oversight of digital currency companies in Hawaii was indefinitely deferred Friday afternoon.
Itâs unfortunate news for the cryptocurrency companies participating in the Digital Currency Innovation Lab (DCIL), the stateâs first pilot program that allows digital currency issuers to do business in Hawaii without having to first obtain a state money transmitter license.
So I wait to see what our legislature finally decides. I KNOW that they love to tax things as we have the highest tax rate in the country.
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The problem with crypto is that it serves no real purpose other than to provide a means to pay for things that are illegal. And the anonymity feature is becoming questionable. The promise of crypto is that a greater fool will always pay more. Classic bubble mentality.
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People (including me) have been saying that for 10 years. Every time the price drops, you hear more of it. Then the price goes back up even higher. If Iâd put $100 in it the first time someone I heard someone say bitcoin was the next tulip craze, Iâd be very wealthy now.
One benefit I see is that the government canât print more bitcoin. So unless everyone just decides itâs worthless, there will still be a market for it. I donât see everyone deciding crypto is a scam.
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You could probably say that about anything. It was the secret to P.T. Barnumâs success and a fact well known by every carney barker that ever lived.
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If itâs a bubble, it has been going on for a long time. Most bubbles are over in a couple of years. BTC seems to be a rolling series of bubbles! And financial firms are interested in it⌠like Fidelity Investments, they now have a wholly-owned company called Fidelity Digital Assets. Fidelityâs main strategist, Jurien Timmer, has written white papers and given talks about Bitcoin. Very interesting. Iâm just glad I bought some and got my original money out, so if BTC $0 someday I didnât lose anything. My aspiration is to sell at $100,000. It got up to $67,000. We shall see. I donât have the guts to hold onto it until the later years on the chart below where it might be $387,391 according on Timmerâs more conservative model. It could very well be outlawed in a few years. The volatility is truly gut-wrenching. Iâm sure many unfortunate people took out loans to buy BTC and have now lost everything. Thatâs not how you use it⌠you pay cash, throwaway cash mind you, and just a tiny bit. Itâs like a lotto ticket; itâs entertainment.
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If you tire of them, donate to a childrenâs hospital
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Are you kidding??? Thatâs my kidâs inheritance.
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Uh oh. Looks like some are missing their tags. You better go back to work!
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Some crypto holders are now totally wiped out (Luna). The real issue is some people borrowed money to buy crypto and/or they owned too much. 1% of your portfolio to crypto is probably the maximum you should spend on it, and 0% on âalt coinsâ.
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Crypto postscript - I got out with a 2.5x profit on Bitcoin early in 2022, $10,000 in, $25,000 out in 18 months. It was OK, but not what I was expecting, was expecting $100,000. I hope no one got badly hurt by the recent FTX implosion (I was not using them).
I remain unshaken in my belief the cryptocurrencies and NFTs will revolutionize the entire financial industry and businesses from top to bottom, in the same way the Internet has revolutionized, well, everything. It will be a continued growth path, and more use cases will be found, and some very large players will either get on-board or literally die-off quickly because they get dis-intermediated (think - KODAK).
I mean if you think about it, what money is, and how we create it in the US and the World, itâs really an antiquated steaming pile of Scheisse, best decribed in this book: âBeyond Blockchain: The Death of the Dollar and the Rise of Digital Currency by Eric Townsendâ. Itâs ripe to be replaced by newer technology.
As far as individual âcoinsâ, like Bitcoin or Ethereum⌠I donât like the wasted energy of Bitcoin. I think I have moral arguments against owning it again. I had some Ethereum, bought it at $250, gave it to my kids for Christmas, and gave some as a Wedding gift they sold at $4,000. Best Christmas present ever Dad! Maybe if Ethereum trips back to $250 Iâd buy it again. Owning these early individual coins was sort of fun, but not a priority for me now.
Iâm rolling Treasury Bills.
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Many people donât know that the sole value of the crypto asset is the cryptographic nature of it. Also, you can even have a paper wallet. You get a private key and a public key which is a 3d barcode, or a string of characters. I think itâs just neat, but someone will buy it for the cryptography of it.
The other value of the bitcoin is the lack of centralized nature. Some disadvantages would be all of the people who have forgotten their private key then that money of theirs is in the ledger but no one could get it. What percentage of the bitcoin is no longer claimed? How will they deal with this? Ultimately the amount of unclaimed bitcoin will approach 100%. However, if you have the ledger on your computer, you may condone transactions.
Blockchain and software built on top of Ethereum are going to change the world, but first we have to get through the crypto stupidity phase, analogous to pets.com geocities altavista netscape in 2001, and on to more feasible projects.
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Crypto serves no purpose. Itâs a solution looking for a problem. I have lots of ways to pay for things: cash, check, credit card, debit card, PayPal, Venmo, Zelle. The only reason to have crypto is to do something illegal. If I keep money in a bank itâs insured, it collects interest, itâs regulated. Crypto has zero protections. Just a hope that someone will pay more for it than you paid.
Ole, you just donât understand the possible use cases. The best one that comes to mind is truly secure and private contracts that are totally integrated with the payments. For a business that has to deal with hundred or thousands of vendors, the speed and efficiency gains could be really phenomenal. Same with the medical industry - your complete patient chart, x-rays, MRIs, your payment data (private health insurance or Medicare, whatever), everything handled securely and more or less instantly between you, the doc, the hospital, the payor. How is that not a win? Why do we still have clipboards and faxes in 2023? And legions of people chewing up money shuffling little bits of information around. Itâs terrifying the way we do it now.
Agree with your assessment of Ethereum and the blockchain technology that is the foundation. The thesis behind Crypto and NFTs appears to be that someone is willing to pay more for it than you did. No thanks !!!