Bitcoin crash coming (1 Viewer)

gopherblue said:
I'm not sure how my voice "always comes across as avoid this at all costs." I specifically said I think crypto has a place as part of an asset allocation. Perhaps you are referencing my other posts on investment advice? Which I stand by: prudent and steady diversification, conservatively aggressive equity-focused allocations, primarily in low cost index ETFs. After ETFs, boring blue chip growth and dividend-paying stocks, then sexier/more speculative stocks. And now, perhaps some crypto. Again, for most people. I am also consistently against investing in physical commodities, mostly due to the illiquidity, high transaction costs, and headache/cost of storage. My past advice, if you read it, is actually somewhat aggressive--I don't really think most people have a strong need for fixed income until much closer to retirement, and even then, my allocation is aggressive in equities, assuming one has the assets to justify it. I happen to think that BTC and other crypto have a bright future, and one should consider (or should have) exposure to it, but I'm not willing to wager my whole nest egg on it. Anyone who does is gambling. I don't gamble. I make investments.

When I read cheerleader after cheerleader flogging crypto, and calling the next threshold through which it is going to barrel, with no actual basis for such statements other than hope, it is clear to me that they have fallen in love with an asset class and are blinded by $$$. That never turns out well.

I have no doubt that folks here have made 7-figure (or more) fortunes in crypto. I coulda/shoulda/woulda (at least back when a buddy of mine bought a few hundred for sh!ts and giggles), but I didn't. Do I have some now? Yes. But it is a small sliver of my net worth.

By all means, buy crypto. Just don't go crazy.
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I do apologize for using "at all cost" and you do state to be more conservative view than the cheerleaders. And I totally agree with most of what you said.
 
Crypto is inappropriate for most people's investment needs. Let's call it lotto tickets < alt coins < bitcoins < pink sheet / penny stocks.

Have some fun if you like - @Darson for example. Revel in your windfall from a couple of hundred dollars of play money turning into a hundred grand worth of bitcoin. Buying bitcoin now with a sizable chunk of your net worth is a huge error. < not that it can't turn out great but because the risk it too high for the potential returns >

I do have some sympathy for folks with so little net worth that taking a "swing for the fence" approach is their only hope. Age and poverty doesn't end well.

Along the same line, person just starting out in life can blow their life savings playing house advantage casino games. Why not play keno for $5,000? Someone has to win. Right?

Crypto is not an investment. It is straight up speculation. That doesn't mean money can't be made, just that the risks are high and the chance for all sorts of fraud are ripe.

I would be shocked if your financial planner would tell you anything different -=- DrStrange

PS a poker parable. Once upon a time a crafty youngling walks into an underground card game. Pulling out $200 set aside for rent, they buy into the game. Luck and skill somehow turns that $200 into $125,000 by the end of the weekend. The old sharp running the game invites our Hero into the Big Boy's Game. What should be done? Isn't the worst case losing the original $200? Or could it be said that our young Hero is actually risking $125,000?

If you are sitting on six+ figures of bitcoin, that is what you are risking. Not the much smaller original investment. The risk tomorrow is the value of the investment today. It is life changing money for many people. Maybe a middling approach would be prudent? Just saying we don't press our bets at the crap table forever. There comes a time to take some of the money off the table.
 
@gopherblue

You mean calling it a pump/dump or comparing it to the largest speculative bubble isn't at all counterintuitive to then saying that crypto has a place as apart of allocation? I mean that seems to be mutually exclusive statements to say the least.

"Some" allocation is just a cop out tbh. If you have done your research and believe in a single asset class, and the only shirt you got is a plain white T that you can afford to lose, taking some risk can go a long way. Harder to diversify if your liquid capital is less than 5 figures. Things change when you have more assets and it turns more into wealth preservation. The first $X is always the hardest.
 
DrStrange said:
Crypto is inappropriate for most people's investment needs. Let's call it lotto tickets < alt coins < bitcoins < pink sheet / penny stocks.

Have some fun if you like - @Darson for example. Revel in your windfall from a couple of hundred dollars of play money turning into a hundred grand worth of bitcoin. Buying bitcoin now with a sizable chunk of your net worth is a huge error. < not that it can't turn out great but because the risk it too high for the potential returns >

I do have some sympathy for folks with so little net worth that taking a "swing for the fence" approach is their only hope. Age and poverty doesn't end well.

Along the same line, person just starting out in life can blow their life savings playing house advantage casino games. Why not play keno for $5,000? Someone has to win. Right?

Crypto is not an investment. It is straight up speculation. That doesn't mean money can't be made, just that the risks are high and the chance for all sorts of fraud are ripe.

I would be shocked if your financial planner would tell you anything different -=- DrStrange

PS a poker parable. Once upon a time a crafty youngling walks into an underground card game. Pulling out $200 set aside for rent, they buy into the game. Luck and skill somehow turns that $200 into $125,000 by the end of the weekend. The old sharp running the game invites our Hero into the Big Boy's Game. What should be done? Isn't the worst case losing the original $200? Or could it be said that our young Hero is actually risking $125,000?

If you are sitting on six+ figures of bitcoin, that is what you are risking. Not the much smaller original investment. The risk tomorrow is the value of the investment today. It is life changing money for many people. Maybe a middling approach would be prudent? Just saying we don't press our bets at the crap table forever. There comes a time to take some of the money off the table
Click to expand...



Life changing how? I have asked that more than you have surely. A few 100gs, if you have a stable career, savings etc, speed up retirement by half a decade or so? High % equities is the "safe" tried and true option, but i want to buy even more time. Wager time to get time. And this isn't my first rodeo, lost 85% in 2018 but took enough off the table to give me a clean slate.

I'm starting to dabble in equities but it isn't as fun or lucrative.
 
I am in the same boat as you, the lad is risking 125,000. I am hoping he converts that from rent money to mortgage. and then save up to go to the big boy table. Now i understand what Bitcoin is and its considered digital currency. But remember there are alt coins building off BTC with technologies and applications that will be in high demand in future. That is why I disagree with calling it a lotto ticket.
 
Perthmike said:
Imagine meeting a vegan that's also into crypto then.

Would be a fun chat
Click to expand...
Vegan - check
Bought some crypto - check

Meme time!
354C49C4-3F59-4DBA-B51B-08CFC964ED79.jpeg
 
gopherblue said:
Sigh. It's not a matter of a stamp of approval. Please reread my statements.

However, you've obviously convinced yourself you are right, so who am I to trample on your selection bias?

I don't know why I'm bothering to engage, but my point about knowing people was not to suggest I know better than you, but that other than some outliers, like the Winklevii, placing a significant amount of one's net worth in a super volatile speculation play is, I think we can all agree, risky. Full stop. Given that all of those "people" I know are as a result of a long career in the hedge fund world (where risk and volatility are important and well-understood), and that some of those people I know (or worked with/for) are some of the most aggressive, bullish investors you've ever heard of, I'd say it speaks volumes that they invest only small amounts (relative to their net worth) in crypto. You previously indicated you have 90-95% of your net worth invested in crypto--that's your decision, and your appetite for risk, but I think that for 99.9999999999999999999% of folks out there, that is a good way to lose one's shirt.

Yes, your weighting in crypto gives better returns, but it also can scalp you. And I never said crypto wouldn't hold (some, hell, maybe all) value, just that it is speculative and volatile, and the underpinnings are incredibly risky. Not just of the coin itself, but of the method of holding it and the transaction costs (both monetary and otherwise).

Crypto has a place in an asset allocation, but when I read nonsense like "to the moon!" and "HODL!", it betrays cheerleading, likely from those who were lucky (or, if you prefer, prescient), way back when, only a few years ago.
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I heard Scaramucci on a business show explain that if you invested only 1% of your investment portfolio in bitcoin and held the other 99% in cash, it would have outperformed the S&P over the past 5 years. From what I hear, a lot of the big institutions are planning on taking a similar approach. Even if you lose all of your investment, 1-2% isn't going to break you, IMO.
 
DrStrange said:
Crypto is not an investment. It is straight up speculation.
Click to expand...
This isn't true. It comes down to how a person approaches it. If one is swing trading and looking to make a quick buck then yeah it is pure speculation because (just like stocks) no one knows what the ticker price will be tomorrow.

As I mentioned above one of the mantras of the crypto world is to "hodl" which is actually good advice if you believe in these assets long term. In 5 years I am confident BTC and ETH will be more valuable than they are today. You may call that speculation but not any moreso than buying gold or a stock.
 
Lemonzest said:
This isn't true. It comes down to how a person approaches it. If one is swing trading and looking to make a quick buck then yeah it is pure speculation because (just like stocks) no one knows what the ticker price will be tomorrow.

As I mentioned above one of the mantras of the crypto world is to "hodl" which is actually good advice if you believe in these assets long term. In 5 years I am confident BTC and ETH will be more valuable than they are today. You may call that speculation but not any moreso than buying gold or a stock.
Click to expand...
HODL is best
In 9 years I’ve probably made 4,500%
Inflation at record levels is coming
What else has the power of crypto to be a store of value and bank the unbanked

if you were watching
This is where you should have bought in
C122A22B-03D3-405B-99CE-2FA1247B0933.jpg
I’m up 10x on ETH in less than a year

5K ETH Is coming this year
 
Geremie said:
Recently finalized a 3-year BTC-based loan valued at C$49k/coin — interest payable annually with option to repay 1/3 principal each year.

Used the proceeds to purchase long-term puts (2022-2023) on TSLA.

Tulips baby!!!
Click to expand...
What is the sell price on the puts?
 
If tether is fully liquid has always been an argument since 2017 and if tether crashed it would crash Bitcoin

I bought long before this guy and I’ll be holding till at least 2023/24 bull run
I held through 100/1000/20000
I’ll be waiting for one more halving cycle at least for ETH and BTC before I sell

if I’m wrong oh well
I’m willing to risk loosing half compared to our last ATH given the regular halving cycle produces nearly 10x plus compared to the old ATH

patience till Sept time
 
@hdgeno That piece does sound ominous, doesn't it?

But it is not published in the reputable financial press. The author is secret.

It is very pretty, the graphics are nice. However, the data in the graphics are unattributed.

I can't take the piece seriously. Could be a big deal. Could be jibber jabber. If it is serious, I expect the major financial press will tell us a lot more about the story.

Sadly, such major press pieces are often autopsies rather than warnings -=- DrStrange
 
I also read the @hdgeno article then did some googling - there were news articles in 2019 and 2020 referring to the same thing. For example:
https://www.wsj.com/articles/large-...d-price-sharply-higher-study-says-11572863400
https://www.cnbc.com/2019/11/04/stu...rket-manipulator-pushed-bitcoin-to-20000.html

The simple fact for me is that I know so little about how blockchain/crypto actually functions in the real world (as opposed to how it's supposed to work) that it's a huge black box and hence why I agree with @DrStrange when he calls it speculation. Yes, there are macro economic trends that support the growth of crypto but in an unregulated market where the mechanics aren't clear, who knows what will actually happen or if your investment is secure.

I could have put $1000 in Amazon 20 years ago and I'd be a millionaire now. I also could have put the same in Bitcoin 10 years ago with the same result. The difference is that I can wrap my head around Amazon and it's business plan (even though it's changed a whole lot since the IPO), I can't quite do that for Bitcoin. Now clearly my lack of understanding may be an opportunity loss for me but I'm 100% certain that in 1 year (or 2 years or 10 years) I can sell my Amazon stock and get the cash equivalent to the share price at that time - I'm not 100% certain that I'd be able to do the same for Bitcoin.

Having said that, I'd be happy to put "some" money in Bitcoin but to me it's a punt - if it goes up 10x then great but if I lose it all, then fine also as I accept the risk.

Disclosure: I am/we are long AMZN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in my ramble.
 

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