What Happened to Crypto Currency "Investors?"

Whatever happened to all those people who were getting rich investing in Crypto Currency?

I suspect “investing” is too kind of a word… “gambling” might be closer to the truth and it seems like it may not have even been one of the smarter gambles.

My crypto journey:

  1. In 2020, put 1% of portfolio into Bitcoin ($10,000 per coin) and Ethereum ($250 per coin)
  2. Both zoomed. BTC went up like 5x in a matter of months
  3. I pulled my original capital OUT, so my at-risk money was now $0 (I did it in a tax-free manner too… buy donating to a charity instead of giving cash to that charity. Money is fungible, eh?)
  4. I gave away Ethereum as gifts during Xmas 2020, kept some
  5. My kids sold their Ethereum for like $4000 per coin, I ultimately sold mine at $2500 per coin. So mine was 10x profit, theirs was, well, infinite because it was a gift with $0 cost, but 16x from what I paid. Best Xmas gift ever from Dad!
  6. So now crypto has crashed… I’m still up 3x from what I paid, a 3x gain over 2.5 years which is a 55% annual return. It’s still the best SPECULATION I’ve ever made! (it’s not an investment). But I’ll take it!
  7. So now we are in a crypto winter. Crypto is proven to not be a robust store of value, it clearly tracks tech stocks like the NASDAQ index. If it goes to $0 I’m OK because my at-risk amount is $0 see 3. above. That said, if it gets back to all time high of $67k I’ll sell all. I’m not expecting it to go more than $100k within the next five years, based on new “S-curve” thinking by Jurien Timmer at Fidelity Investments. $67 - $100k in five years and I’m SUPER SUPER happy.
  8. Bitcoin is now 2% of my portfolio. If it goes to $0 I have a 2% loss. Not happy, not good, but not a disaster.

Advice:
a. only put in money you can afford to lose
b. buy it only when the fear and pessimism is so thick you can taste it in the roof of your mouth
c. buy low, sell high (mostly people do the opposite)
d. if it goes insanely high, don’t get greedy… SELL, or at least sell some
e. Yes, you will have to pay Federal capital gains taxes. If you’re don’t you’re a cheating skel
f. It’s not an investment. It’s 100% speculation. It’s not buy-and-hold. The instant you buy, you have to have an exit plan. If you don’t, you’re a sucker

Bitcoin is not “currency”. No major world currency is as volatile as Bitcoin. That’s just wrong thinking and language. It’s a speculative object.

What do you think is driving the pricing dynamics of crypto currencies? Other than being a volatile and relatively undependable medium of exchange for things of value, what is it’s worth based upon?

I think it is based upon the whims of those who participate in it’s furtherance. And shares more in common with the past follies of tulip bubs and ostrich eggs than it does with precious metals and sovereign currencies.

That’s true, and it’s also true of the stock market generally, also the high yield bond market, preferred securities, foreign developed and EM bonds. So what’s your point? Don’t participate in something with a speculative angle? Do you keep paper cash in a mattress then?

The point to be made is that any methodology that we can devise to guide decisions in the stock market is only as accurate as the information that goes into that scheme’s processing and final output. And all the talk of “fundamentals, track history and indicators” is nothing more than the act of basing a decision on information gleaned from prior such decision-making. And it’s why Black Swans are so devastating when they occur. The shorter the self-feeding inbred cycle becomes the more likely a disrupting Black Swan will appear.

In the early days of data processing the term “Garbage in, Garbage out,” was applicable. It still is today. :slightly_smiling_face:

I got tired of the game, sold all my Bitcoin today for a 2x profit in 2 years. Not “to the Moon!” but 2x in 2 years = 41% annual increase compounded. Still the best trade I ever made. But, time to give it a rest. I’m going to buy another asset with the proceeds.

To bad… if you would have sold it a year ago the price would have been $40,529.40 instead of just $22,157.30. That’s a big hit. :frowning_face:

I took no “hit”, I doubled my money in two years! Sheesh!

Learned the other day that El Salvador put much of its government reserves in Bitcoin. As a result of the crash in price, the government now is technically bankrupt.

Bitcoin with survive but some of the others like Tether are scams and will disappear.

There is no way I’d consider going the bitcon/crypto anything route. It’s not a classic Ponzi or classic pyramid scheme, but it has some of the key elements of both it seems to me. The key element is the big winners are the very relatively few early recruits, the big losers will likely be the vast numbers of suckers holding the empty bag when the tower crashes. Like any sucker ploy, most of the positive noise/spin will come from the minority of winners, while the losers will suffer their losses in relative silence… who wants to advertise their own foolishness.

Who you gonna call?

Be careful when the underlying asset backing a currency is somewhere in the ether.

There’s something comforting about tangible assets like brick and mortar, or even a paper certificate backed up by a bunch of politicians in a building somewhere.