People are getting fuck you cash from stocks, housing, crypto. What's the point in working for a few thousand dollars every other week when your portfolio swings double that every day.
On paper, it looks like a lot of people made a lot of money. But in actual money, on average, you will lose.
In a bull market, anyone can make money with just about any bet.
What is real is actual money going into and out of markets. And there, on average, people will lose money because no more money is going out than is coming in, and the markets and miners will take their cut as well.
What? I don't doubt that people on average lose money but I don't know of anything fundamental about crypto markets that makes it a mathematical property...
Unless you are a miner or run an exchange, of course.
Say there are four people in the crypto market. Joe buys crypto for $50, sells it to Steve for $75, who sells it to Sarah for $100, who sells it to Dale for $125, who holds it. Three people have earned $25 each (minus fees) while one is either even or has lost $125, depending on how you look at it (maybe he's happy holding his crypto permanently). This looks like on average people have earned money.
I'm not saying that this reflects how real cryptocurrency markets work, but it seems at least nominally possible that most people have earned money.
Money in: $50+$75+$100+$125
Money out: $50+$75+$100-3*fees
You can continue this chain indefinitely, and the missing final term will get smaller and smaller in relation to the total. The limit of (money out - money in) / transactions goes to simply minus the average cost of the fees. So, a net negative.
Everyone who owns an asset is not selling it at this exact moment, so it is worth nothing and there is a 100% loss according to you?
This is a possible definition of "loss", but I think it's clearly non-standard, and not useful. You can't just pretend that's what other people mean when they talk about losses.
Whether a larger number of people gain any amount money than those that lose any amount of money is less easy to analyse, but, given that a person can only lose 100% of their money (not taking into account massively unwise loans people might take out, for simplicity) but some people do gain much more than 100%, it is likely that average person has lost or will lose money.
But with a long enough time horizon and generally rising prices, we can make the probability of any one person losing money as close as we want to zero. For a given unit of crypto only the last person in its chain of buyers loses money, left holding it when prices finally drop.
Btw there are cryptocurrencies who pay out staking rewards.
The only way money enters the crypto market is by people buying it, and it leaves both by people selling and by intermediaries taxing transactions. So, on an average, people must lose money.
Or is the point that between quotes in an illiquid market, everything is worthless?
Consider instead that there is one bitcoin, that one hundred people sell to each other in a long chain, for varying prices, playing a small fee each time. If you add up the cash inflow and outflows, you will get a net negative per person equal to the average fee paid.
If no theft was involved, then you can't have a net negative number for total cash flows, can you? The fees went somewhere.
First, exchanges skim a fee off the top of every transaction. That removes some money from the analysis, causing a negative sum.
Second, miners are a special case: They do not deposit any money, they only withdraw it using freshly minted coins. Thus they too skim off some of the value in the market, and also cause the sum of the regular trades to be negative.
If I buy a car for $20,000 I'm $20,000 short but I also own a car.
Everything, even stocks that are being traded at a high frequency, has moments when it is not being traded.
If continuous markets were somehow realized, then moments when value is "missing" per your definition could be rare.
But instead, there are infinite non-trading moments between each pair of trades, so "nearly all" of the time your definition says an asset is worthless. That just seems like a useless, inappropriate definition from a practical perspective.
You are much more likely to get one person with fuck you money and 499 losing most of their money.
And when you sum up all their money before and after, they will have less money after.