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A Silly approach to cryptocurrency investing???

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Deos

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Hi all, most of us agree that cryptocurrencies are here to stay. But nobody can tell which coins are going to stay for the long haul, and which will be wiped after the boom bust. I've listed the major coins(btc, eth, xrp, xmr, neo,...) about 400altcoins (penny coins valuing 0.00x USD). And i plan to spread across all of them my capital to have bigger odds of hitting the home-runner coins. What you guys think of this? Your critics are welcome. Thanks
PS: Thinking of holding 3-5yrs minimum
 

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Kak

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Well a common problem people have with any investing in general is that they diversify away their upside with what I would consider a significant amount of downside. No upside makes investing pointless.

There will emerge 1 or 2 victorious cryptocurrencies if any and you'll lose. The only way you win is if more of them stick around than not. Which probably isn't going to happen.

Relating to stocks right now... I think this wide net ETF investing everyone seems to be doing these days is the new single stock exposure. Why? Because the entire market can swing just as easily as a single stock used to. What's the difference?

I am a firm believer in making educated investing decisions based on what you can learn about individual stocks. Look at the numbers. Know about the management. Look at profitability, assets and liabilities THEN choose the ones you think will beat the market. I usually hold for the long term. These are companies that will probably NOT get battered as badly when ETF junkies get nervous. Why? Because of their own individual performance.

This has served me 2-3x better than my JP Morgan advisor per year for the last 4-5 years I have been doing it. I'm happy with that and will continue what I'm doing and moving things until he eventually manages nothing.

All if this said. You should be able to apply some reasoning to your investment decisions or not do it.

I own one cryptocurrency. Bitcoin. The only actual value they provide is utility. I am bullish on that utility becoming more valuable though.
 
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lludwig

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I think your first mistake is thinking that putting money into cryptocurrencies is investing.

It's a hedge, a bet, a trade. It is NOT an investment.
 
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Deos

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I think your first mistake is thinking that putting money into cryptocurrencies is investing.

It's a hedge, a bet, a trade. It is NOT an investment.
ok it might be a terminology issue...anyway im holding for a long haul...so what do you think about the approach? not the name of the approach...any suggestions?
 
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Deos

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Well a common problem people have with any investing in general is that they diversify away their upside with what I would consider a significant amount of downside. No upside makes investing pointless.

There will emerge 1 or 2 victorious cryptocurrencies if any and you'll lose. The only way you win is if more of them stick around than not. Which probably isn't going to happen.

Relating to stocks right now... I think this wide net ETF investing everyone seems to be doing these days is the new single stock exposure. Why? Because the entire market can swing just as easily as a single stock used to. What's the difference?

I am a firm believer in making educated investing decisions based on what you can learn about individual stocks or in your case cryptocurrency. Look at the numbers. Know about the management. Look at profitability, assets and liabilities THEN choose the ones you think will beat the market. I usually hold for the long term. These are companies that will probably NOT get battered as badly when ETF junkies get nervous. Why? Because of their own individual performance.

This has served me 2-3x better than my JP Morgan advisor per year for the last 4-5 years I have been doing it. I'm happy with that and will continue what I'm doing and moving things until he eventually manages nothing.

I own one cryptocurrency. Bitcoin. The only actual value they provide is utility. I am bullish on that utility becoming more valuable though.
Yeah your point is spot on. I use technical analysis to trade forex market but not cryptos...Either way im also bullish on btc and most major coins as i listed, because i believe in their fundamentals...Stuff is there are around 1000+ altcoins out there and though their vast majority will bust, few of them will probably make it to the end(like in the dotcom era), and it would be nice to be part of it...I always choose base on their core value , their technology, their services and the likeliness they will deliver on those promises...
 
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lludwig

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Let me be clear with cryptos are (not ICOs mind you) are currencies.

What are currencies? A store of value. Instead of having to trade your one goat for two sheep you use a currency to make a more accurate transfer of value.

Forget for a moment that crytpos still aren't good currencies for various reasons.

You are "investing" based upon the great fool theory. That someone else in the future will pay more of your crypto than what you paid for it now.

Now if you think it will go up in value great, but remember it has no productive assets tied to it (ie like a company) that generates profit.
 
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biophase

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So you have 400 coins. You buy $1000 in each spending $400k. Pretend each coin is $1 right now.

You need 1 coin to go up 400x to break even. Or 2 coins to go up 200x. Remember this is just to break even!
 
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Deos

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thanks
 

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Deos

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So you have 400 coins. You buy $1000 in each spending $400k. Pretend each coin is $1 right now.

You need 1 coin to go up 400x to break even. Or 2 coins to go up 200x. Remember this is just to break even!
400 pennycoins valuing currently 0.00x (for example 0.003$)...so with 1$ you get over 300coins each(1/0.003=333).. then you just need 400$ for whole operation...and suppose each coin reaches 1$ you get 1$ x 333 x400 = 133,333$...more than 130,000$ in return for 400$ invested...if ever the coins rise more than 1$ let say 5$, imagine...(xrp was around 0.002$ in by 2014 and reached 3$ by 2017)...sure most will never hit the homerun but i just need single or two coins out of 400 to break even... thats the plan
 
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lludwig

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Here's my unpopular opinion:

Buying Cryptocurrency is gambling. Not Investing.

Now, if your interesting in taking a gamble with your money I suggest researching into Bio-Tech Marijuana Stocks.
Agree except for the "Bio-Tech Marijuana Stocks". A few years ago it was 3D printer companies. If it's popular more than likely you are at the wrong part of the wave. Best time is to hit it when it crashed like we saw beginning of this year with cryptos.
 

Cvince

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Agree except for the "Bio-Tech Marijuana Stocks". A few years ago it was 3D printer companies. If it's popular more than likely you are at the wrong part of the wave. Best time is to hit it when it crashed like we saw beginning of this year with cryptos.
I still believe the bio-tech marijuana stocks are rising as Cannabis is just becoming legal in Canada. I personally got into Aurora Cannabis when it was around $6.50. Now a year later it's at $11.81. At the time a ton of other stocks like Beleave.Inc were being pumped with it so it's always best to diversify. I just think it comes down to researching the key people in the company and determining if they are the right fit for the business to scale.

However, I still think buying into crypto is gambling. I don't trade on a regular basis with it anymore. My suggestion is to have LTH positions unless some critical information about the company is brought to the table.
 

lewj24

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The only actual value they provide is utility.
Can you expand more on this point? What do you mean by this? I thought the word 'utility' was the same as the word 'value'?
 

TinyTim

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By definition, buying a cryptoasset in the hope that it will go up in value is investing. A high-risk one? Yeah sure.

As we become a tokenized economy, and every stock is a digital asset, it will be interesting to see how people's opinions change.
 

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By definition, buying a cryptoasset in the hope that it will go up in value is investing. A high-risk one? Yeah sure.
Depends on your definition.

IMO (obviously, just to emphasize, it's my subjective opinion):

Investing - generates cashflow. Dividends, rent from real estate, interest. You might consider selling something if its value goes up, but generally speaking, it's not really your objective. You want consistent income from your investment.

Speculation - anything you buy hoping that its value will go up so you can eventually sell it. Flipping real estate, commodities, non-dividend stocks you plan to sell when the price goes up.

I never understood cryptocurrencies and a few times I tried, it was well beyond my understanding even when explained in the simplest terms. From my conventional investing perspective, it sounds like a fantastic way to lose money. I wouldn't even call it speculation, it's just pure gambling as a few people in the thread have already pointed out.
 

Kak

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I agree that the way many people approach crypto as pure gambling. Their only reason is "I think it will go up" ask them why and they have no answer.

I think that is pretty common amongst the intellectual apocalypse we find ourselves in today.

Tesla? Tesla is currently a "more valuable" company than FORD!

Netflix? They have more competition than ever and yet 135x earnings...

Amazon? Admittedly they grew more into their valuation than they were... But they are still 80x earnings. That implies growth still... I think they are more mature than Apple yet a huge imbalance in valuation.

I am not saying that these stocks won't or can't go up. They probably will. What I am saying is that they are pretty far from reality as well.

That brings me to crypto. Bitcoin specifically.

What does it do? It is a way to hold a amount of money outside of a state manipulated currency. Simillar to a more liquid and far more portable gold.

I will agree speculation and day trading of crypto currency is completly ridiculous. I do hold there is intrinsic value, just like a traditional company, that value is in the usefulness and widespread adoption. It is less useful to me as an American with a stable and unencumbered financial system, but abroad, that is a different story.

Look at Venezuela. Once the richest, by a large margin, country in South America. People flocked to bitcoin as socialism made their home currency worthless. Look at other authoritarian countries... It could literally liberate the economics of many of these countries over time.

Then look at the "civilized world" It could also force competition out of governments and avoid some of the downfalls experienced in Venezuela.

While this isn't happening quickly, bitcoin is a global market. The value to one helps the value to another. So the fact that this particular use of bitcoin may be isolated to a few pockets of hell on earth, it is still going to help inflate the price.

What else makes Bitcoin more valuable from a utility standpoint? Accommodations is another one. More companies than ever are accepting bitcoin. More things are being built around bitcoin daily to make its use easier and more mainstream. That will lead to more widespread use and subsequently higher value.

The last point I will make is this... By the definition of gambling portrayed herein, what isn't gambling?

Long held as the safest investment you can make... How many of you would buy a 30 year US treasury bond? The US has two options after continuing to kick the can rears its ugly head. Default or hyperinflation. Sound familliar? 30 years is a long time to trust government.

I would argue holding a state controlled currency beholden to bureaucrats might one day be considered the more risky bet than crypto once stabilized. Imagine people only exchanging for state currency as needed.

So am I gambling? Maybe. Maybe I am wrong, maybe I am right, but I back up my reasoning and I will be OK either way. I used to hate bitcoin because it didn't follow my fundamentals, but I did some research, reconciled it with what I know of this world and dipped a foot in when the price was at about 3300.
 
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lludwig

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I would argue holding a state controlled currency beholden to bureaucrats might one day be considered the more risky bet than crypto once stabilized. Imagine people only exchanging for state currency as needed.

So am I gambling? Maybe. Maybe I am wrong, maybe I am right, but I back up my reasoning and I will be OK either way. I used to hate bitcoin because it didn't follow my fundamentals, but I did some research, reconciled it with what I know of this world and dipped a foot in when the price was at about 3300.
So why not own gold then??
 

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Kak

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So why not own gold then??
I do own some gold actually. Gold has less utility and has already stabilized. There are some things that crypto is better at than gold.

Bitcoin has a way to go before it is even half as prevalent as gold, if it even gets that far. But growth in adoption means a growth in value.

You can't easily spend gold, you also can't easily turn it back into currency without much larger fees than Bitcoin. Gold is the least liquid investment I own.

I am not arguing, that is just my reasoning.

I said the value is in utility. Utility that gold doesn't have.

I am NOT saying that it is the "best investment idea ever" far from it... but it isn't the monkey throwing darts I originally thought it was either.
 
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lludwig

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If you really think the shit will hit the fan than crypto or gold is a shitty way to store value. History shows otherwise and it's more practical items. In Venezuela, people were using car parts in one WSJ article from a few years ago.

I'm not a gold bug but do own it. I own some gold and crypto (more gold than crypto) as of a hedge but it's also no more than 5% of my overall portfolio.

The way you are making it sound it is your only investment and a very large part of it. You are then in for a heap of trouble IMHO.
 

lewj24

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If you really think the shit will hit the fan than crypto or gold is a shitty way to store value. History shows otherwise and it's more practical items. In Venezuela, people were using car parts in one WSJ article from a few years ago.
You forced me to call you out on this comment. This makes no sense. Gold definitely holds its value. Crypto is too young to know in my opinion. But Kak has a point people in Venezuela are buying it like crazy. But car parts?? Come on. What's that have to do with what we are talking about?

If crypto and gold is a shitty way to hold value in a hyperinflation scenario then what is a good way?
 

lludwig

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You forced me to call you out on this comment. This makes no sense. Gold definitely holds its value. Crypto is too young to know in my opinion. But Kak has a point people in Venezuela are buying it like crazy. But car parts?? Come on. What's that have to do with what we are talking about?

If crypto and gold is a shitty way to hold value in a hyperinflation scenario then what is a good way?
Ok look at history, people resort to bartering than using things like gold in times of economic chaos.

Hence cart parts, because it's something people need to survive. They need transportation.

I'm NOT suggesting gold or crypto won't have any value, but rather other more daily items will be held in more use/regard.

If you are holding onto gold or crypto for any doomsday situation/hyperinflation then it is a bad idea. They would be useful in mild to high inflation, not hyper. This is because the basic foundations of society tend to break down and all hell breaks loose. So the rule of law is pretty much gone.
 
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lludwig

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But Kak has a point people in Venezuela are buying it like crazy.
People were buying crypto in Venezuela because of the government was subsidizing electric. So they were mining for free. Until the government put a stop to this. They threated any miners would serve jail time. Easy to spot individuals with the huge electric usage lol.

Also, note that Venezuela is having rolling blackouts and spotty cell service. Also blocking of external networks.

How well would cryptos work when you have no power or ability to transfer your crypto???
 
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lludwig

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Kak

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If you really think the shit will hit the fan than crypto or gold is a shitty way to store value. History shows otherwise and it's more practical items. In Venezuela, people were using car parts in one WSJ article from a few years ago.

I'm not a gold bug but do own it. I own some gold and crypto (more gold than crypto) as of a hedge but it's also no more than 5% of my overall portfolio.

The way you are making it sound it is your only investment and a very large part of it. You are then in for a heap of trouble IMHO.
Don't know where you got that idea. Bitcoin is less than 5 percent of my portfolio. Gold is less than 5 as well.

I don't think shit is going to hit the fan right away. There is always a shitty fan somewhere though.

Neither one of us know the future. I just explained how I came to my decision to buy some bitcoin. How about instead of telling everyone why it's such a bad idea, support your claim and explain why?

I showed you mine... Why don't your show yours?
 
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lludwig

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Don't know where you got that idea. Bitcoin is less than 5 percent of my portfolio. Gold is less than 5 as well.

I don't think shit is going to hit the fan right away. There is always a shitty fan somewhere though.

Neither one of us know the future. I just explained how I came to my decision to buy some bitcoin. How about instead of telling everyone why it's such a bad idea, support your claim and explain why?

I showed you mine... Why don't your show yours?
I wasn't speaking to you specifically just what I've seen with most. HODL.

I've already stated why it's a bad idea to just own cryptos if you are expecting a hyperinflation/doomsday situation.
 

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