Bitcoin - steer clear or not?

jpmackey said:
The point being that crypto is an asset that you sell.
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Everything that you can buy is an asset that you can sell. That is not enough to make it an attractive investment.

I think the point about crypto is that it's intended to serve as a currency - there's a clue in the name "cryptocurrency" (meaning "hidden currency"). But in fact it's not much used as a currency, and it has characterestics which mean that it doesn't serve especially well as a currency.

(Which is not to say that it might not have characteristics that do make it an attractive investment. But you wouldn't be wise to invest in it unless you have identified those characteristics and satisfied yourself that, yes, they do make it an attractive investment. But, considered purely in terms of doing what it was ostensibly designed to do, crypto doesn't look crash-hot.)
 
Sister Sara said:
perhaps 'Cryptoasset' would be a more apt name for Bitcoin?
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but what characterises it as an asset? even gold has a utility it is highly desired simply for its aesthetics rarity, and historical heritage as a store of value, Bitcoin only has relative "rarity" as a characteristic and that is a man made characteristic and not God made like gold is.
 
Corola said:
Beanie babies, Pokemon cards and Labubu dolls also have man-made rarity - that doesn't stop them being valuable.
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yes, but they fall in and out of fashion depending on the generation that desires them just like bitcoin , in my opinion it is a generational thing, something else will come along that displaces bitcoin as "the thing", need another century at least to truly analyse if it is still an asset, but nobody intends to hold bitcoin for a century, they want it as long as it keeps going up in price in the short term.
 
Corola said:
Beanie babies, Pokemon cards and Labubu dolls also have man-made rarity - that doesn't stop them being valuable.
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But it also doesn't make them valuable. Lots of things are rare or even unique, and still completely worthless - my unpublished (and unreadable) novel, for example.* We need to point to more than the limited supply to support the argument that BTC is an asset worth investing in.

*[I haven't actually written a novel. But if I had it would certainly be worthless.]
 
It doesn't make everything valuable, but it does make the desirable ones valuable. The rare ones are valuable because people want to own them, and people want the rare ones because they are rare!

There are other cryptocurrencies that have the same forced scarcity as bitcoin, but if no one wants to buy them they aren't valuable. Value is ultimately determined by what someone else will pay you for it.
 
Sure. And what makes an asset worth buying as an investment is your confidence that, in time to come, someone will want to pay you for it. Scarcity alone does not guarantee that, so you have to look for other qualities or characteristics of the asset that make you confident it will continue to be attractive to others.

As others have pointed out in this thread, there are assets often bought as investments whose value basically depends on fashion or taste - art and antiques, for example. This painter was fashionable twenty years ago, but there's not much demand now; that class of Victorian jewelry could be bought for a song in the 1990s, and they're worth a fortune now. But paintings and antiques do have inherent qualities of beauty or design or whatever - you can get pleasure out of owning them even if they are deeply unfashionable and have not performed well as investment assets, and you can at least hope that their particular qualities may yet come back into fashion. Do cryptocurrencies have similar inherent qualities that make you confident, or at least optimistic, that someday someone will want to pay you more for your stash than you paid for it?
 
TomEdison said:
you can get pleasure out of owning them even
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Sounds like Lego is still the best investment.

m.independent.ie

Forget Bitcoin, LEGO is a better bet in a QE world

If you missed out on the GameStop rally or failed to bite as Bitcoin surged 400pc in the year, don’t worry – there are plenty of alternative investments out there, thanks to the magic of central banking.
m.independent.ie m.independent.ie

If it all goes wrong, you can just open a packet and build.
 
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TomEdison said:
Do cryptocurrencies have similar inherent qualities that make you confident, or at least optimistic, that someday someone will want to pay you more for your stash than you paid for it?
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Yep. BTC's value is a guessing game...I mean its hard to enough to estimate the trajectory of a company's earnings 3yr to 5yrs out.....so I guess if you like even harder games - like speculating on the mass psychology of crowds 3 to 5yrs out I wish you all good luck. There are easier games to play IMO and I'm not sure why crypto obsessives can't recognise that.

BTC has underperformed every benchmark of relevance over the last 5yrs, volatility adjusted or under brain damage adjusted returns its even worse but thats another conversation:

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The narrative on BTC keeps changing also - first BTC was for transactions (completely invalidated now as a thesis), then it was digital gold (as you can see 'old' Gold has outperformed it), then it was an inflation hedge but it underperformed during the great inflation of 2021/2022, then some say its an antidote to chaos the only issue with that is it behaves like a levered QQQ when anxiety rises....which is to say when chaos breaks out BTC goes down faster and lower than QQQ and SPY does.

At this point the only explanation for it is its a speculative trading sardine.....the first truly global digitally connected narrative driven trading sardine but still a trading sardine nonetheless....for every BTC millionaire who thinks he's a genius there are thousand financial train wrecks....the true winners are the crypto casinos (Coinbase, Binance, Robinhood, Strategy & DATs) they are croupiers at the table collecting 2% on every spin of the wheel. It's a lowly way to make a living.
 
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ArthurMcB said:
Surely now is a great time to buy btc given current price.
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They we're saying that at $95k....then $85k...then $80k....then $75k.....

Given BTC's value has no fundamental anchor say unlike a cashflowing apartment or a pub that produces €250k in profit per year where you can come to some approximation of value (comps, comparative valuation)....its very hard to impossible to be 'sure' about what BTC is 'worth' at any given point in time.....except that maybe a lot of people like you think because its down 35% and was at $122,000 at one point it must go back up there again...enough people think that way and act then your right......guessing what millions of people are thinking and whether they will act on those thoughts is a game rooted in hubris IMO...but speculation is fun I guess.
 
Add in dollar weakness and btc has dropped near 50% in 12 months for those in Euro.

I still don't understand what btc is. :D
 
peemac said:
I still don't understand what btc is. :D
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Dont worry even the BTC 'experts' cant agree on what is....the most dangerous thing to do in life is to tell one of these 'experts' that you dont understand it at a party, they will corner you and explain their version to you for two hours. Imagine its very similar to being a housewife at a tubberware party in the 1980's.
 
The unusual thing about bitcoin and the price action is that it has had a few big collapses in price before and then went on to new highs , I thought the 2018 price collapse from 20K would have been the end of bitcoin. With other assets like gold and silver when they had their large price collapses in 1980 it took decades for them to take out those 1980 highs, not until 2011 did that happen. It took Microsoft 12 years to recover from its dot com collapse in 2001. I think it is these relatively rapid recoveries from huge price collapses that has attracted so much money into it and that is very unique it has to be said.
 
I suspect we are seeing a TACO reversal here. Didn't the Idiot King promise to the faithful in July 2024 that if elected he would make US the BTC capital of the universe. Well he's chickened out on that one as well.
 
@letitroll are you sure those BTC figures are correct? According to this simple chart BTC was $37865 on 6th Feb 2021. So if it was $65000 on 5th Feb 2026, then that would represent a 71% increase over that time and not the 11.33% as suggested above.

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