It's the speculators with their completely off-chain normal finance hijinks that everyone gets upset and confused about. It's a shame that's what people think cryptocurrency is.
No, it's always true in zero sum games. The stock market is not zero sum. Beating the stock market is, which is why most investors don't beat the stock market. But that's different from losing principal in even nominal terms.
Investing in BTC is like buying shares of stock in a company that produces nothing and has high ongoing costs that are only paid for by continuing to issue new shares.
This is not true at all, unless you mean in the short term. There has never been a 20 year period where the S&P500 has lost money, and only a few 10 year periods where it has.
If you are a long term investor and you invest in a broad index, you will make money.
The stock market is not a zero sum game where on person has to lose for someone else to gain. The whole pie is getting bigger.
Neither in crypto ;)
And of course past performance does not guarantee future results.
I don't think that's true, otherwise people wouldn't pile so much money into stock funds in their 401ks.
e.g. if you are very loss averse, you don't buy lottery tickets at all. You don't just buy the safest ones where you expect to lose the least.
e.g. lottery winnings are also affected by inflation.
There is nothing in need of rewrite. The original claim was about money, not currency. As money is defined as the assets, property, or resources owned by someone (i.e. wealth), we can substitute currency with any other asset. Let's use cars, as is convention, and works well as they tend to decline in value much like currency does.
So, you trade your car for a security. Some years go by and you decide you want a car again, track down the guy who you sold your car to, and offer to trade the security back for the car. He agrees and now you've got your car back. You didn't lose any cars. You are back to one car, just like you had originally. However, the car is scratched up a little, needs new tires, etc. and as such isn't worth as much as it was when you first traded it. And so, while you haven't lost any cars, you have lost money. The car isn't what it used to be; your wealth has declined.
You might not lose any currency in an exchange of assets, you might even gain currency in the deal, but that doesn't necessarily mean you haven't lost money.
Cash is the easiest investment to hold. If it were stable it would be very attractive, but it is not. The monetary system works hard to ensure that it isn't stable, with mandated targets to ensure that cash holdings lose money every year.
i.e. iff your security is worth fewer dollars than it was worth some period of time ago, it is losing money. The fact that dollars have also lost value during the same time means you've lost more money, not less.
I said no such thing...?
> iff your security is worth fewer dollars than it was worth some period of time ago, it is losing money.
And if it sells for more dollars than in the past, but not commensurate with the decline in value of those dollars, then you've still lost money. Less money lost than would have been by holding dollars, but still a loss.
This same crowd gets interested in Bitcoin at every ATH because of the news coverage. I got so many people asking me how to buy Bitcoin when it hit 20k in 2017 and 60k in 2021. That's when the vast majority of people buy.
Yes, if you put money in your 401k and don't take it out until retirement you will make money. That doesn't describe the vast majority of investors though
Doesn't it? My mother did it that way. Made regular payments into her selected cooperative low-risk mutual fund that built up a reasonable retirement pension. I know a lot of people that do that. I suppose the difference is that they don't think of themselves as investors.
I think you have a skewed view of the average investor. About 58% of Americans own stock, but only 35% of Americans own any outside their 401k. That means 40% of investors only have money in their 401k. I couldn’t find the numbers for how many of those investing outside of their 401k just owned index or mutual funds, but I even if it was only a small percentage it would mean a majority of investors aren’t buying individual stocks.
There is a vocal minority who invest speculatively. It makes sense that this number would seem larger than it actually is, because they are the ones who talk about investing. You don’t see questions or posts from people just investing in their 401k and index funds, but there are more of them than the speculators.
https://news.gallup.com/poll/266807/percentage-americans-own...
https://www.pewresearch.org/fact-tank/2020/09/25/few-in-u-s-...
Commodities and currencies (including crypto currencies) are not cash flow producing assets. There's no value in them that can't be accessed immediately, so no one's going to sell them to you for less than their long run worth.
People who buy a small number of individual stocks end up in a different situation. While their average return is positive, those results have a large degree of skewness (meaning most stocks stagnate or fall, but the meteoric rise of those that do well makes up for it on average). If you picked a random stock in 1992, you'd quite likely have lost money by now.
Exactly, and then you realize there is a lot more difficulty using crypto as a currency than actual currency, and then think "that was dumb".
I'm probably one of the few people who has actually purchased real (legal) stuff with crypto (at least in one of the only ways that was really feasible at the time - converting crypto to a gift card at a real store). I remember waiting in the furniture store for nearly an hour hoping for my block to get confirmed to purchase a sofa. "Gosh", my non-tech spouse commented sarcastically, "this really is so much better than a credit card swipe where I'd be done in 10 seconds."
Apart from the delays in clearing transactions, the high volatility, the absence of legal recourse when things go wrong, the computer security risks, the high complexity and so on.
I'm not going to replace paying in cash for groceries with bitcoin. But it definitely has it's place as a currency. It's pretty annoying that the only things people ever hear cryptocurrency have almost nothing to do with cryptocurrency at all.
They owned bitcoin-equivalent on investing apps. These investors didn't control their own private keys and have their own coins.
I read this as: picking particular stock winners has been known for decades not to beat the market. Yet people still want to believe...
I don't think this is particular to crypto. Don't you see the same phenomenon with day traders? Something like 95+% are losing money, as I understand it.
To the later commentator: if you're investing in stocks and not beating the market average, then yeah, I think you should consider yourself to be losing money.
Contrast with cryptocurrencies where the value is only based on social consensus. Not being linked to an actual business means that sales can halt instantly and the floor is zero because people only make a disadvantageous transaction if they think it’s going to plummet.
It's odd that people think the general use of cryptocurrency would be happening without them. The incentives to just use crypto as a means of transmitting value are exceptionally low, and before exchanges existed, mostly negative due to the difficulty of conversion.
Which is probably why only a small set of the criminally minded put any effort into using it as a currency in the first place.
All of the people losing money on Bitcoin and crypto were trying to get rich quick and predictably got burned. Just like people who only hold a stock for a few days or try to get in on an option play like GME or AMC at the last minute.
What do you expect when you set out to explicitly ignore and bypass everything ever done to prevent this kind of thing?