i'm not a crypto supporter, but the same applies to the stock market, housing, or any business or investment
Investing in Bitcoin is like investing in shares of a company that produces nothing, and which only is able to fund its continued operations by continuing to issue and sell more shares once every ten minutes. Investing in a real compay that worked that way would be considered crazy, but somehow it’s supposed to be different because it’s decentralized. The financial implications are the same though; it’s a negative sum game instead of a positive sum game.
That’s why it’s more like gambling than an investment. The amount of money that comes back out is always going to be less than the amount that goes in, in the end.
No, in the actual long run you and every of your descendants dies and the earth get disintegrated.
I think most people who day-trade would call themselves "investors" but it seems precisely like gambling to me.
Can trading stocks be both "investing" or "gambling" depending on how you approach it?
Investing involves holding assets long term.
But they certainly don't call themselves gamblers. At least not any that turn it into a successful career.
Because most traders aren't. They are bank and fund employees with KPIs, risk management oversight, massive support functions and very expensive computer programs.
Retail investors that are day trading on the other side of those professionals are absolutely gamblers though.
The precise definition of gambling varies by jurisdiction, but ultimately the thrill of prizewinning and dangers of addiction/financial loss were enjoyed by large numbers of crypto buyers [1].
I personally bet on Ethereum the same way I bet on sports teams whose players I enjoy watching.
[1] Admittedly my evidence is mostly anecdotal, but it seems like everyone knows somebody who used crypto like this
Options and derivatives that create or extract artificial volatility out of economic prices are gambling tools in the hands of most consumers.
The underlying source of randomness for a gambling instrument doesn’t really matter as long as it’s statistically well behaved. The physical uncertainty of a roulette wheel, the economic uncertainty of the business cycle and the athletic uncertainty of a sports match all do the job.
The SEC has no authority over how crypto is taxed.
Not really. These are independent decisions. The IRS may incorporate the SEC's views into its guidance, but that's simply a courtesy.