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Tell Me I'm Wrong - Crypto Simplicity

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HelpAndProsper

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Tell me I'm crazy to think this and why.......

I can borrow money at about 5% right now against my mortgage.

Bitcoin/Ethereum have a decade performance record of about 200% per year on average.....

Why should I not borrow as much money as possible and buy all Bitcoin and Ethereum?

Is it not a ridiculously simple business plan with low risk when you consider the historical performance of Bitcoin/Ethereum?

Why am I wrong?
 

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Is it not a ridiculously simple business plan

It's not a business, nor a business plan.

It is asset speculation, one that wants to disrupt world powers. And world powers don't like being disrupted.

That said, investors who took out second mortgages to invest in the hottest speculative asset usually end up on the front page of financial websites as a tale of reckoning and ruin, not on the front page of Reddit as the newest WSB millionaire.

Why am I wrong?

You might not be.

But I tend to look at "History" as more than 10 years... you've used that time frame to construct your thesis.

Again, not saying you're right or wrong, just poking holes in your premise.
 

Mathuin

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I think that's a crazy idea because past performance doesn't mean future results.

A CENTS business should make at least 200% per year and you have a lot more control over it.

It's the same reason why MJ doesn't advocate putting all your money into the S&P500 like Bogle or Buffett would advise you to do, despite the fact it rose 3111% in the last 40 years. It doesn't mean it is going to happen again and there are a lot of variables to consider. (Edit - variables outside of your control)
 
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Tell me I'm crazy to think this and why.......

I can borrow money at about 5% right now against my mortgage.

Bitcoin/Ethereum have a decade performance record of about 200% per year on average.....

Why should I not borrow as much money as possible and buy all Bitcoin and Ethereum?

Is it not a ridiculously simple business plan with low risk when you consider the historical performance of Bitcoin/Ethereum?

Why am I wrong?
To be honest.
It's just gambling.
Cus there are 2 outcomes of your investement: win/loss
so theres a 50/50 probability.
Doesnt really matter about the historical performance.

I'd probably invest ur time and money into bettering your mindset, because becoming rich and wealthy is all about journey.
At one crucial point in my journey i realized i had to change my mindset, and that has actually really improved my life.
Now im more about improving my life in all areas, not just getting rich very quickly while ignoring health and relationships like i did before.

Just my opinion, but if u really feel like u should do it, just do it, but dont be mad if u lose, its just a risk, accept it and u wont be mad if u lose.
 

Martzee

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Tell me I'm crazy to think this and why.......

I can borrow money at about 5% right now against my mortgage.

Bitcoin/Ethereum have a decade performance record of about 200% per year on average.....

Why should I not borrow as much money as possible and buy all Bitcoin and Ethereum?

Is it not a ridiculously simple business plan with low risk when you consider the historical performance of Bitcoin/Ethereum?

Why am I wrong?
This is the stupidest thing I have seen... unfortunately, I have seen it these days more often as people who never learned investing, nor trading jumped into speculation now counting their future-to-be profits ending up losing it all. Bitcoin is the most speculative, volatile chimera out there (I personally dismiss this as an investment in any form, to me it is an electronic version of tulip-mania), so borrowing money against your house and dumping it against this chimera is a sure way to lose your house. I would swallow taking a loan and invest in the stocks, I have done that, invested it, and already paid it all back, but I can assure you, I have spent years learning the ropes because that is risky. If you have no clue how to invest (and judging by your post you don't have a clue), do not use your house and hard-earned money. You will lose them all. SHMH.
 

UGOBEST

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This is the stupidest thing I have seen... unfortunately, I have seen it these days more often as people who never learned investing, nor trading jumped into speculation now counting their future-to-be profits ending up losing it all. Bitcoin is the most speculative, volatile chimera out there (I personally dismiss this as an investment in any form, to me it is an electronic version of tulip-mania), so borrowing money against your house and dumping it against this chimera is a sure way to lose your house. I would swallow taking a loan and invest in the stocks, I have done that, invested it, and already paid it all back, but I can assure you, I have spent years learning the ropes because that is risky. If you have no clue how to invest (and judging by your post you don't have a clue), do not use your house and hard-earned money. You will lose them all. SHMH.
I not true bitcoin is far more better than dollar, you need to learn investing before investing a true investor win in both down and up markets. An average investor win only in up market thrown the money and pray in goes up.
 

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Tell me I'm crazy to think this and why.......

I can borrow money at about 5% right now against my mortgage.

Bitcoin/Ethereum have a decade performance record of about 200% per year on average.....

Why should I not borrow as much money as possible and buy all Bitcoin and Ethereum?

Is it not a ridiculously simple business plan with low risk when you consider the historical performance of Bitcoin/Ethereum?

Why am I wrong?

I think you should. And you should tell every person you know to do the same.
/sarcasm.

This is investing and not a business plan. Also extremely high risk, not low risk. Your assumption on "historical performance" is a classic prediction error. There are only two types of forecasters: those who don't know, and those who don't know they don't know. You are the latter.

All that said, just like going to a casino or buying a lottery, even if odds aren't on your side you may still win. And win big.

Lastly, blockchain is one of the greatest inventions and crypto must have a great future. What I can't tell is whether BTC and ETH will repeat their performance from the past decade. Instead of betting my house on it, I prefer to throw some F-u money at it and hopefully make a good profit on my gamble. I am prepared do lose if I am wrong, are you?
 

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jdm667

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Tell me I'm crazy to think this and why.......

I can borrow money at about 5% right now against my mortgage.

Bitcoin/Ethereum have a decade performance record of about 200% per year on average.....

Why should I not borrow as much money as possible and buy all Bitcoin and Ethereum?

Is it not a ridiculously simple business plan with low risk when you consider the historical performance of Bitcoin/Ethereum?

Why am I wrong?
It is a very simple plan, but it is not a business - it is a gamble. If you do this and lose everything, you will be very sorry.

Even if it works out and you become a millionaire, is that really how you want to achieve it?

You didn't build a business or help anyone - you just bought low and sold high.

Become wealthy by helping people instead.
 

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Martzee

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I not true bitcoin is far more better than dollar, you need to learn investing before investing a true investor win in both down and up markets. An average investor win only in up market thrown the money and pray in goes up.
Please, explain to me how is Bitcoin better than the dollar... simplify it in bullet points.
 

HelpAndProsper

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thanks for the advice.....This is what I was looking for.....

At this point, I have a hard time believing Bitcoin and ETH aren't going higher in the future years.

I'm prepared to endure a 1-2 year bear market if a downturn happens. I can make the minimum payment on a 5% interest line of equity loan with no problem.

As some of you said, past results are not a guarantee of future results.

But you could say that about anything or any business.....

Some of you call Crypto investing gambling. Why is it gambling to buy BC and ETH when they have a 10 year performance record of far outpacing the S&P 500?

So you're telling me buying BC and ETH is gambling, but buying a S&P 500 ETF is not?
 

HelpAndProsper

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It's not a business, nor a business plan.

It is asset speculation, one that wants to disrupt world powers. And world powers don't like being disrupted.

That said, investors who took out second mortgages to invest in the hottest speculative asset usually end up on the front page of financial websites as a tale of reckoning and ruin, not on the front page of Reddit as the newest WSB millionaire.



You might not be.

But I tend to look at "History" as more than 10 years... you've used that time frame to construct your thesis.

Again, not saying you're right or wrong, just poking holes in your premise.

MJ, seeing your world power comments, I'm guessing your bet is that BC, ETH, etc. will be shutdown somehow by world governments.
 

Antifragile

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thanks for the advice.....This is what I was looking for.....

So you're telling me buying BC and ETH is gambling, but buying a S&P 500 ETF is not?
LOL
I am also not calling “borrowing money against my house to invest in S&P 500” a business.
 

Timmy C

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Tell me I'm crazy to think this and why.......

I can borrow money at about 5% right now against my mortgage.

Bitcoin/Ethereum have a decade performance record of about 200% per year on average.....

Why should I not borrow as much money as possible and buy all Bitcoin and Ethereum?

Is it not a ridiculously simple business plan with low risk when you consider the historical performance of Bitcoin/Ethereum?

Why am I wrong?

I would never borrow money to buy cryptocurrency personally.

Past performance doesn't indicate future performance.
 

Kevin88660

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Tell me I'm crazy to think this and why.......

I can borrow money at about 5% right now against my mortgage.

Bitcoin/Ethereum have a decade performance record of about 200% per year on average.....

Why should I not borrow as much money as possible and buy all Bitcoin and Ethereum?

Is it not a ridiculously simple business plan with low risk when you consider the historical performance of Bitcoin/Ethereum?

Why am I wrong?
If things do not go your way, how long can you hold while paying down the debt and interest? Do you even have money to increase position size?

It is good to take smart and calculated risk after a big market correction, but most bets went wrong when people become too greedy.
 

Kak

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MJ, seeing your world power comments, I'm guessing your bet is that BC, ETH, etc. will be shutdown somehow by world governments.
It will certainly be messed with. I don’t know if they can totally shut it down, but they can scare people away from it.

How many people would have bitcoin in their possession if they could serve prison time if caught? I don’t care if it’s lucrative.

How many people deal drugs? That’s super lucrative.

How many people are in human trafficking? Also lucrative.

How many people sell machine guns and missiles? Again. Lucurative.

Illegality is more powerful than a lot of the btc community care to admit.
 
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Kak

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thanks for the advice.....This is what I was looking for.....

At this point, I have a hard time believing Bitcoin and ETH aren't going higher in the future years.

I'm prepared to endure a 1-2 year bear market if a downturn happens. I can make the minimum payment on a 5% interest line of equity loan with no problem.

As some of you said, past results are not a guarantee of future results.

But you could say that about anything or any business.....

Some of you call Crypto investing gambling. Why is it gambling to buy BC and ETH when they have a 10 year performance record of far outpacing the S&P 500?

So you're telling me buying BC and ETH is gambling, but buying a S&P 500 ETF is not?
First of all your business hinges on your effort and leadership. An investment is a buy and hope you’re right scenario.

The s&p certainly has more fundamental value, but bitcoin is redefining that.

The problem isn’t investing, it’s investing with a frickin loan. You don’t have the money for a reason. You clearly weren’t able to accumulate it yet… But you’re somehow confident you can dig yourself out of a hole if need be. That doesn’t make any sense bro.

We wouldn’t be having this discussion if you had an investable net worth and wanted some crypto exposure.
 

thechosen1

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C - you have no control over the price of Bitcoin, unless *maybe* your name is Elon musk and you have millions of Twitter followers to pump and dump. Even he doesn’t have control of it though.

E - literally anyone can buy and sell crypto. Total morons think they are geniuses right now because they happened to buy crypto at the same time as everyone else. Everyone buying = higher price.

N - Need. Where to begin... Huge arguments arise here, but let me just say I’ve made it this entire time without ever once having even the slightest utility or use for Bitcoin except as a fun little gamble in my robinhood account back in college.

T - time. Obviously this doesn’t require much time, you just throw money at it and watch the graph.

S - scale. This ironically isn’t as good as you think. It doesn’t pay a dividend, there is no cash flow, you are not going to get more Bitcoin unless you buy more. You buy a fixed number of bitcoins and the “value” goes up or down. The only way you get to take advantage of it is by selling it.

There’s a summary of this as a “business.”

TLDR: it isn’t one.

It isn’t an investment either.
It’s speculation.

I don’t care what asset you use to speculate - speculating is not safe and it’s not investing. You should only use maybe 5% max of your net worth for speculation.

The last thing you should do is get a loan against the place you live and BET it all on something as volatile and unpredictable as Bitcoin.

Oh and there’s the store of value idea - like gold and silver. Sorry compadre, those are good stores of value because they hold up for hundreds if not thousands of years.
 
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MitchC

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Why Bitcoin?
Why not another house?
a business?
Shares?
All of these have historically preformed well also

I’m guessing it’s because Bitcoin is easier to invest in than looking for a house or picking stocks or buying and running a business
 

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Rabby

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Tell me I'm crazy to think this and why.......

I can borrow money at about 5% right now against my mortgage.

Bitcoin/Ethereum have a decade performance record of about 200% per year on average.....

Why should I not borrow as much money as possible and buy all Bitcoin and Ethereum?

Is it not a ridiculously simple business plan with low risk when you consider the historical performance of Bitcoin/Ethereum?

Why am I wrong?

Do what you want. Nobody knows if you're wrong; that's how uncertainty works. If you want to bet your house on bitcoin and the certainty of your day job, do it.

I remember back in the day when the guy shining my shoes told me about a great investment he was in. It had gone up 100,000% so he bought it.

I thought to myself, man, I could sell a kidney and buy a few shares of that too! But before I had a chance it crashed and burned, and then I didn't want it anymore. Too bad... I really wanted to own those shares at the highest price they ever reached.
 

Frinys

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Let's say you take a $200,000 loan.

What is the best case? Bitcoin goes up by another 400% and you're left with $600,000 in profit. That is a nice sum of money, but it's not life-changing. Not at all.

What is the worst case? Someone finds a way to break SHA-256 encryption or a breakthrough in quantum computing. This will send bitcoin straight down to 0. Leaving you with a $200,000 loan.

Best case: You will have some savings.
Worst case: You will have to manage a huge loan.

Some savings are not going to change your life. But a huge loan will make your life much harder if you ever want to quit your job pursuing the fastlane. Maybe you even need two jobs to manage your loan.

And then, there is the psychological aspect.

How do you think it feels watching your $200,000 investment drop to $30,000 and having it stay there for 4 years? It is going to affect you. You are going to get stressed, which is going to affect those around you. Do you have a wife? Are you willing to let her suffer for 4 years just because you want to earn some money? How about your kids? Or your friends? Are you willing to see those relationships suffer? These things are worth a million times more than whatever you can earn by taking a loan to buy crypto.

You shouldn't consider selling your soul to earn a non-life-changing amount of money.
 

door123

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Tell me I'm crazy to think this and why.......

I can borrow money at about 5% right now against my mortgage.

Bitcoin/Ethereum have a decade performance record of about 200% per year on average.....

Why should I not borrow as much money as possible and buy all Bitcoin and Ethereum?

Is it not a ridiculously simple business plan with low risk when you consider the historical performance of Bitcoin/Ethereum?

Why am I wrong?
I would look at these from a pure risk reward perspective.

Smart investors are in the habit of investing in asymmetric investments which is when your upside is unlimited (say BTC goes to $1MM) & your downside is limited (Say you invest your own cash or use a stoploss).

Is long term investing in crypto with an equity line an asymmetric investment? No, your down side is not limited. If BTC or RTH goes near zero, you'r stuck with a giant liability or bankruptcy.

I'm personally trying to get in the habit of investing in things that have asymmetric returns. I would advise you to do the same.
 

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maverick

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asymmetric investments which is when your upside is unlimited
Your definition of asymmetric investments is incorrect. It simply means that the upside is bigger than the downside. It doesn't have to be "unlimited". In your example, BTC could have "unlimited upside".
 

Kevin88660

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Tell me I'm crazy to think this and why.......

I can borrow money at about 5% right now against my mortgage.

Bitcoin/Ethereum have a decade performance record of about 200% per year on average.....

Why should I not borrow as much money as possible and buy all Bitcoin and Ethereum?

Is it not a ridiculously simple business plan with low risk when you consider the historical performance of Bitcoin/Ethereum?

Why am I wrong?
If you want to risk 6 digit amount you would be better trying to start the next shiba/safemoon. At least it is more like an entrepreneurship and a real chance for 8/9 digit wealth.
 

ZCP

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review the risk. only risk what you can afford to lose and see if you are right.

scenarios:
1. you are right and make [200% - the interest payments and fees] .... what is the EV?
2. you are semi right and make [10% - the interest payments and fees] ..... what is the EV?
3. you are semi wrong and lose [10% + the interest payments and fees] .....what is the EV?
4. you are wrong and lose [100% + the interest payments and fees + your house] ..... what is the EV?

is the sum of 1,2,3,4 positive?

(what if there is an equal chance of each for your first pass? so use 25% for probability for the first guess)
put the numbers here in a reply (massage the % returns and probability to what you are thinking too)
 

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