dan_ashcroft
Well-known member
This is a great book: https://www.amazon.co.uk/Attack-50-Foot-Blockchain-Contracts-ebook/dp/B073CPP581
Cryptocurrency Crash
- Thread starter Craggsy2
- Start date
Andy_W
Well-known member
The thing is people who don't know what they're doing will lump all on one thing, like they did with Sirius, and like they did with Bitcoin. Bitcoin is probably even more risky by the time most people got on the wagon, which certainly wasn't in the early stages.A lot of what you've written is of course correct - if things go to zero you lose your stake, one reason why people have a portfolio not just a basket of one egg (so to speak) and a great many crypto projects will fail - or will have been built to fail (rug pulls etc)
As for what a particular crypto coin or NFT etc is worth, like most things including fashion, cars, furniture etc some are seen as high profile or have something new that is being built that will be better then the competition. That leads me nicely to transactions, if you look at some of the older projects they definitely have issues with speed and cost - Ethereum is one such (they are trying to address it) and other projects have been built that work at different layers to speed up the transactions and they can be very cheap, I've used TRON to transfer funds to a central place to get then into a hardware wallet for as little as $1 per transaction.
The narrative that it is a huge crime dumpster has been checked a number of times and demonstrated a falsehood - it is used in some cases for sure, but then fiat is used for that purpose a great deal more - how many banks have been accused and fined for their money laundering?
As for the unregulated bit, that has largely been the attraction, once regulated it becomes like fiat whereby it is controlled, the returns in the bull times can (I stress can because it is always risky) be significant whilst unregulated and huge losses whilst the bear reigns are being seen now I think $1.5 trillion has been mentioned.
I am not an advocate of crypto being for everyone, I put a lot of time and effort into making not a lot of money out of it - though I don't know another way in the last year where I'd have gotten such a return - maybe stocks/shares but that is just as risky to a novice. Anyone adverse to it is probably right to have doubts about the foundation it is built on, but blockchain is here to stay and some of these projects will pay - like any sort of speculation, it's just finding the ones that will.
Here's a short Forbes article on crypto and crime with some figures if anyone is interested...
The False Narrative Of Bitcoin’s Role In Illicit Activity
The majority of cryptocurrency is not used for criminal activity. According to an excerpt from Chainalysis’ 2021 report, in 2020, criminal activity only represented .34% of all cryptocurrency transaction volume.www.forbes.com
You even get people who think they know what they're doing, and they're even more dangerous as they're punting more ££. An individual with limited knowledge of stocks and company valuations etc is just so far behind, that they never realise that what they know and 20x more is already priced in by the experts, and they do lower amounts on multiple trades so get pummelled on fees.
I suppose I try and listen to people who know what they're doing and try and follow them, it's still a fair amount of risk, but risk I can take and I've got time to let it play out. Scary times at the minute mind.
It would be hard to figure the crime out, as it's hard to trace, and obviously the authorities don't know what they don't know, if they did, there wouldn't be any major organised crime. It gets played down by Crypto enthusiasts and the authorities, as it's in their best interests to play it down.
It just seems daft to me when you have people lumping on Doge which is effectively a **** take, and they fall for pump and dumps, or other things like that. No way are those coins ever going to be widely used, and neither will 7,999/ 8000 and the other one will have limited uses due to fees, delays and energy use etc. Some will gain big mind, of course, but they will be vastly outnumbered by those who lose, and I think it's just far too early for this.
The S&P 500 is up 40% since Jan 1st 2020, which includes the Covid hit, and the recent hit, and is far less risk, for a great return. We're not going to get that this year of course, but even 10% a year can make you a millionaire from 100k in 25 years, and it's a 100k a year plus from there.
For less risk long term risk I just do some funds on Vanguard like the Global All Cap, S&P 500 and then take a bit more risk (with lower amounts) on some big tech funds, and then even more risk than that on the likes of eTorro (with even less amounts). I've been getting about 12% on Vanguard over last 5 years, average 20% on the funds over the last two (including the 30% massive hit now) and 30% on eTorro (including the 10% or so that's down now), but these all carry localised risk too. I've got time and disposable income though, so not much point in me going on bonds or growth stocks or whatever. On all of them you tend to notice the worst days a lot more than the best days, but thankfully there are often a lot more better days.
I'm not a financial advisor of course, but they advised me to look into a managed portfolio, but 10% a year before the fees (which end up taking around half) didn't really seem worth it when I have time.
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Andy_W
Well-known member
There is going to be a good time to buy soon, whether that's now is a different matter.Quite a few shares in the FTSE 100 plummeting
good time to make a few quid
I largely avoid the FTSE 100 mind (other than "all world" investments), as just don't see the UK growth being anything like USA, EU or other areas due to Brexit and the current government.
Not a good time for the markets now with inflation, omicron, energy prices, Russia/ Ukraine tensions etc, perfect storm at the minute.
Andy_W
Well-known member
Can I just clarify *this is not financial advice*
On a serious note though, everyone's advice would be different anyway, and be related to amounts, time they have left, appetite for risk, mental strength, security of their job, when they may need the money etc, etc, it's complex.
My position is probably different to most, so certainly wouldn't even suggest people listen to my alternative ideas to Crypto if they're not young, not secure, likely don't need the money soon (by soon I mean 5-10 years). Even if they do fit that criteria they really should speak to a financial advisor about it too.
Most might be better off in property, but I'm really against that in the North East, and I'm getting rid of my other properties as the crap return is just not worth the hassle v risk, for me the cash is better elsewhere.
If people are going in Crypto, I hope they also have much more of their portfolio with investments which are a lot less risk, and I hope they have lots of time and are not greedy. This money in Crypto really does need to be treat like money which they can afford to go to zero, and it not cause them a breakdown. Crypto only (and nothing else) should only be a strategy for an extreme few, which is probably less than 1% who invest in it.
If people are going to start investing there's a fair chance they will get very burnt, very quickly if they're selective, we've all been there and it's the first big lesson you learn, and one which needs to be learned. Start small, very small.
HundredRoom
Well-known member
Is there anything else more you need than 50% + loss in 2 months ?
or 20%+ loss in 4 days ?
thats why its codswallop.
Which bit don't you get ?
I don't understand using gains/losses as your reasoning behind crypto being "codswallop"...
Netflix is down 21% in the past 24 hours. Is that codswallop too?
HundredRoom
Well-known member
You ever tried telling the share holders in Debenhams , marconi , INTU, Sirius (all recent) and many others over the years that they never lost anything ? Mind you they didn't choose to sell they were forced to.
maybe by your twisted logic they lost nothing -
HundredRoom
Well-known member
Yes I agree . The fact that something has gone down does not make it codswallop
But these sentences do which was more or less all of it
"Ive doubled what I've put in so far, but I think I could end up x10, by when is the unanswerable question but I'm pretty convinced it'll happen"
.
"The bottom is somewhere near"
"The big holders of the strongest tokens (known as Whales) around the world are still accumulating"
"but I'm pretty convinced it'll happen"
"There is absolutely no doubt in my mind buying now will generate profit."
"I only use disposable income to buy,"
WilliamMunny
Well-known member
To be fair, Netflix doesn't claim to be a currency and that level of volatility in company shares prices is both commonplace and expected. At least Netflix shares have some inherent value in so far as you own a stake in a trading company with real customers, real revenue and real profits.
I've no idea what the future holds for Bitcoin, but it cannot become a mainstream currency (except in El Salvador!) when it's value can double or halve inside a couple of weeks. The other issue I have with BTC is "why BTC?" If there are 8,000+ cryptocurrencies out there, why will BTC remain the largest going forward? To be clear, I'm not saying it definitely won't be, but I am yet to hear any plausible reasoning from BTC enthusiasts as to why BTC alone will maintain it's value long term, let alone justifying why they think it will be $100,000+ in the next year or two.
HundredRoom
Well-known member
disposable income
its an interesting phrase that. what does it mean ?
its an interesting phrase that. what does it mean ?
Andy_W
Well-known member
Netflix's problem is it got massive growth early doors, as everyone jumped on it, as it was largely the only thing like it. Problem is, now the early joiners have "Completed Netflix" and all they're left with is the new shows, and there's not enough of them of sufficient quality for people to stay registered. They likely got the first load of shows cheap, as there was less competition, but now there is competition and they're being forced to make their own. There's only so many crime and murder shows you can make, and only so many people who watch them or have not got bored of them.
It's growth was artificially raised during the pandemic too, as people had more time to watch and were going out less etc.
The only reason I've still got my subscription is because I just haven't been bothered to remove it, but it is on my to do list. Not even bothered about the money, it's more the principle of just not watching it.
Saying that, one of the big funds I invest in has a fair chunk of Netflix, and they seem to know what they're doing, maybe they're banking on people just keeping the subscription just in case, and a steady flow of the young to replace the old who move onto other things.
Those quotes don't make crypto codswallop. They just mean the person saying them is talking codswallop. There's a difference.
This is where the confusion lies between the difference between cryptocurrency and blockchain technology.
BTC will never be a mainstream currency around the world, the stock market will never replace USD with BTC, and we'll never be walking into Tesco paying for our weekly shop with BTC. These are pretty much facts.
We'll probably be able to do it as a novelty, PayPal accepts BTC now, but it will never be our mainstream currency.
Most people will probably find this analogy insane... "Why BTC?" is the same question as "Why Gold?".
Who decided gold was worth more than silver and other elements all those 1000s of years ago? It's just supply and demand, if people want it, the price will go up...
Cryptocurrency's have massive risk, but BTC is seen as "the safest", the entry-level, and a lot of the time BTC is used to purchase other currencies, so it's "needed".
I'm not saying it'll always be the largest going forward, but for the last 10 years you've essentially needed BTC (or ETH) to even purchase other cryptocurrencies, which has made the price of those two rise more sustainably than others, because it was always being purchased.
When you pay for your ticket to the match and your beer at half time. You're using your disposable income (or you should be anyway!).
Andy_W
Well-known member
It's a bit of a strange term isn't it, and I use it too
I suppose it's money left over after people have done what they want to do, some might count a Ferrari payment as disposable income, some might just count that in their normal expenditure. Same with boozing, some people might count that money spent as disposable income, but for some going out with their mates is one of their only joys, so their mental health probably relies heavily on that income more than some other things they don't count as disposable income.
I'm sure most would try and dispose it into something which would get them some gains, but then that's not really disposing, it's just moving it somewhere else and hoping it goes up (or goes down less).
If people had to dispose of it, then it's not really disposable, and they wouldn't be all too happy about it.
To me it's something I wouldn't have a breakdown over if I lost it, as my life would not currently change, albeit I would be pretty annoyed, and it would certainly effect my retirement.
I think Netflix is an easy buy today, it's down 20% and in my opinion it'll definitely gain at least 10% of that back over the coming weeks.
The reason for it's drop is they announced a drop in subscriptions and a rise in competition (amazon prime, disney+, etc...) over the last year.
Pretty stupid thing to publicly announce, but maybe it's just a bit of clever market manipulation.
HundredRoom
Well-known member
I think in this crypto context it means its money that they can afford to lose. But its absolutely the wrong mindset when it comes to investmentIt's a bit of a strange term isn't it, and I use it too
I suppose it's money left over after people have done what they want to do, some might count a Ferrari payment as disposable income, some might just count that in their normal expenditure. Same with boozing, some people might count that money spent as disposable income, but for some going out with their mates is one of their only joys, so their mental health probably relies heavily on that income more than some other things they don't count as disposable income.
I'm sure most would try and dispose it into something which would get them some gains, but then that's not really disposing, it's just moving it somewhere else and hoping it goes up (or goes down less).
If people had to dispose of it, then it's not really disposable, and they wouldn't be all too happy about it.
To me it's something I wouldn't have a breakdown over if I lost it, as my life would not currently change, albeit I would be pretty annoyed, and it would certainly effect my retirement.
HundredRoom
Well-known member
When you are a public company you are not allowed to hide information. Investors do not like surprises in the end of year balance sheet. This most likely mean a bigger drop as the trust is lost
Chappy112
Well-known member
So you don't have a clue then yeah? Thanks for confirming my suspicions.
Chappy112
Well-known member
You're trying to tell people crypto is codswallop and you don't even know what disposable income is? Jesus Christ.
Andy_W
Well-known member
Yeah, buying now is better than buying last week, but I stopped pumping any more cash in a good few months back now, and not going back in on anything yet.
I hadn't even seen the news about Netflix, I just expected that was the case with some basic personal assumptions.
I really wish there was just one streaming service, as having Prime, Netflix, Disney etc is just not good value unless you watch loads of TV, but even then if you've got Sky too, it's less time to watch. To me the subscription models are going to break, the payments need to go back to reflecting the amount people watch.
The only one I think I get good value form is YouTube, but can even get that free if you can put up with the adds.