After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors(nytimes.com)
nytimes.com
After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors
https://www.nytimes.com/2018/08/20/technology/cryptocurrency-investor-losses.html
142 comments
I don't think any investor saw this as anything else than a bubble, they just wanted to enjoy the ride up. I would go all-in in a bubble if I had the confidence someone would tap on my shoulder to let me know when it's going to crash. Investing requires discipline.
That isn't what they were saying at the time. Even level-headed forums like Hacker News had a lot of comments (gathering positive votes, although I suspect not all were organic) trying to describe with a wide-array of pseudo-science why Bitcoin was the king of a new world of inherently superior currencies.
Of course it was nonsense, as anyone who'd read about previous bubbles could tell you. But it was a mad time last December.
Of course it was nonsense, as anyone who'd read about previous bubbles could tell you. But it was a mad time last December.
I know people who still think there is value there and it will go back up.
Yes, I am one of them. This is what, the fourth Bitcoin bubble that has burst? The December bubble bursting is no surprise for most level-headed folks that have been following this for a while -- just for the newbies making extremely risk bets at the top of the latest bubble.
Also, most of us are not deluded enough to think it going up to $100k+/BTC is a certainty; there are a number of reasons the larger BTC experiment/bubble could deflate for good one day. But there's also rational arguments for betting otherwise.
Also, most of us are not deluded enough to think it going up to $100k+/BTC is a certainty; there are a number of reasons the larger BTC experiment/bubble could deflate for good one day. But there's also rational arguments for betting otherwise.
> I would go all-in in a bubble if I had the confidence someone would tap on my shoulder to let me know when it's going to crash.
literally you and everyone on earth would do this
literally you and everyone on earth would do this
lolol
I had friends at my old job joining Coinbase with the full intent of "investing" significant dollars on Bitcoin. Soo...yeah.
I had friends at my old job joining Coinbase with the full intent of "investing" significant dollars on Bitcoin. Soo...yeah.
Mostly agreed, but you can buy arbitrarily small amounts. The mistake is putting too large a fraction of your savings there. This is not like Berkshire Hathaway in any sense.
Yep. Axiom 1: whatever you invest can disappear... So easily forgotten.
My personal take on that is: don’t invest money you can’t afford to lose.
Think of it as gambling instead of investing, and you'll probably do better. Relatedly, if you work for a company where a meaningful fraction of your compensation is in the form of stock, that is also gambling.
Cash can lose value too. Look at Turkey now.
Moreover, cash is guaranteed to lose value. The mandate of global central banks has moved from "price stability" to "2% inflation".
What are you going to do with your savings then? It's enough to not put all your eggs in one basket. It also helps to listen to experienced people who were warning about crypto currency left and right.
I have a diversified retirement portfolio, thank you very much.
> maybe someone will read this and take heed for the future
He is young and learned his lesson. That's a lesson worth $19,000. It keeps you from doing what the Korean mother who lost her life savings, plus some, referenced further in the article did.
He is young and learned his lesson. That's a lesson worth $19,000. It keeps you from doing what the Korean mother who lost her life savings, plus some, referenced further in the article did.
At least it was 23k not 100k
Unfortunately, from later in the article:
> Kim Hyon-jeong, a 45-year-old teacher and mother of one who lives on the outskirts of Seoul, said she put about 100 million won, or $90,000, into cryptocurrencies last fall. She drew on savings, an insurance policy and a $25,000 loan. Her investments are now down about 90 percent.
> Kim Hyon-jeong, a 45-year-old teacher and mother of one who lives on the outskirts of Seoul, said she put about 100 million won, or $90,000, into cryptocurrencies last fall. She drew on savings, an insurance policy and a $25,000 loan. Her investments are now down about 90 percent.
This is crazy. People don’t go from saving up 90k in their 40s to sinking all that into a gigantic lottery. Do they?
They do this when their 90k in savings isn't going to cut it in their retirement, or sending their kid to college. Desperation and duress cause people to make poor decisions, in finance, health, jobs, marriage.
It is this fact especially where "advice" doesn't really help. I have not seen that coping with need, whether perceived or real is something people tend to do rationally. And, unfortunately, once you are in that situation, telling real vs perceived needs apart becomes just as difficult.
my opinion/theory is that our social ties and cultural norms are meant to allow us as a group to help individuals out of this, but that our current culture has subverted this norm. It seems self-evidently true that it is better attempt to meet the needs of individuals before the costs of their poorly judged actions force us to deal with the ramifications.
Edit: double negative removed.
It is this fact especially where "advice" doesn't really help. I have not seen that coping with need, whether perceived or real is something people tend to do rationally. And, unfortunately, once you are in that situation, telling real vs perceived needs apart becomes just as difficult.
my opinion/theory is that our social ties and cultural norms are meant to allow us as a group to help individuals out of this, but that our current culture has subverted this norm. It seems self-evidently true that it is better attempt to meet the needs of individuals before the costs of their poorly judged actions force us to deal with the ramifications.
Edit: double negative removed.
> 90k in savings isn't going to cut it in their retirement
$90k at 45 years old isn't great, but it isn't destitution.
$90k at 45 years old isn't great, but it isn't destitution.
I think the point is that it wasn't enough. In which case it makes sense to gamble, especially if the odds seem to be in your favor.
It seems that with enough hype, they actually do.
If you buy into the story that Bitcoin is the future and your fiat currency is headed into oblivion, which is fairly orthodox on Bitcoin forums, then it starts to seem like a more sensible, conservative choice.
That is just gambling...They are at their own risk.
> I got too caught up in the fear of missing out and trying to make a quick buck
People that aren't FOMOing are still making money. Many people are still up for the year.
Just requires more calculation and precision and that can remove an outsized influence of luck, just like every other market on the planet.
I think it is disingenuous to make an article about retail traders that had never entered the market, and not mention how institutional investors and accredited traders are faring. They don't care if the market sold off 80% if they got a 90% discount, as they're probably still up 100%.
People that aren't FOMOing are still making money. Many people are still up for the year.
Just requires more calculation and precision and that can remove an outsized influence of luck, just like every other market on the planet.
I think it is disingenuous to make an article about retail traders that had never entered the market, and not mention how institutional investors and accredited traders are faring. They don't care if the market sold off 80% if they got a 90% discount, as they're probably still up 100%.
Where do they find these people? Is this what a lot of "ordinary" people do? Take out tens of thousands of dollars in loans to invest in cryptocurrency? Are the people profiled in the article a representative sample? Or are we hearing about the worst cases only because they are so notable and out of the ordinary? Will this post ever stop asking questions??
Stories like these are full of anecdote and short on facts, it's hard for me to know what to make of them.
Stories like these are full of anecdote and short on facts, it's hard for me to know what to make of them.
Spend any time on the crypto currency subreddits and you’ll find dozens of people who took out >$20k loans to buy cryptocurrency. There are people still doing it. My co-working office space was filled with people in December talking non-stop about buying crypto currency, although all the crypto currency traders are long gone now.
I don’t think people losing tens of thousands are the norm but absolutely there is a never ending list of people who’ve lost most of what they put in, whether that was hundreds or low thousands.
I don’t think people losing tens of thousands are the norm but absolutely there is a never ending list of people who’ve lost most of what they put in, whether that was hundreds or low thousands.
I work in a software firm. Last autumn half of my team was "investing" in cryptos. People who never traded before, who didn't knew what a bid or an ask was, and who complained to me that exchange interfaces were terribly complicated. Some of them were mulling breaking their 401k (or whatever the term is) so that they could invest the money here.
In January they were saying to me "it's not a loss if you don't sell, right?" Literally 0 financial education.
In January they were saying to me "it's not a loss if you don't sell, right?" Literally 0 financial education.
> People who never traded before, who didn't knew what a bid or an ask was
and the more amazing thing to me was that they also didn't even want to know
the markets were moving too fast to learn anything, too fast to learn about the history, too fast to put any asset under scrutiny because there is another shiny new thing to trade with a cool name and interesting founding team
or as the ZCash employees and fans are programmed to say "the math is interesting and the cryptographers are highly regarded so--" THAT HAS NOTHING TO DO WITH THE CRYPTOCURRENCY TRADERS
and the more amazing thing to me was that they also didn't even want to know
the markets were moving too fast to learn anything, too fast to learn about the history, too fast to put any asset under scrutiny because there is another shiny new thing to trade with a cool name and interesting founding team
or as the ZCash employees and fans are programmed to say "the math is interesting and the cryptographers are highly regarded so--" THAT HAS NOTHING TO DO WITH THE CRYPTOCURRENCY TRADERS
I've realized that not having any debt seems to be the exception rather than the norm, even tho I'm not even from the US.
But it's not that big of a mental jump to make, isn't college education also a kind of long-term gamble with debt? You take on huge debt to get an education that will maybe allow you to make a high enough income to pay back your debt in a reasonable time.
For some that gamble pays off, for others, not so much.
As a personal anecdote: I'm far from being wealthy, but I've always made sure to never have debt. A very good friend of mine, only a few years older, is right now going through personal bankruptcy due to some rather adventurous choices in his younger years.
But he still doesn't seem like he's learned anything. When talking about potential financial investments he always treats me like I'm some kind of millionaire as my good credit history, and meager savings, could easily get me very high loans.
It's like some people see their total credit limit, across several institutions, as their actual own capital in a very naive "As long as somebody is gonna give it to me, it's mine!" way.
But it's not that big of a mental jump to make, isn't college education also a kind of long-term gamble with debt? You take on huge debt to get an education that will maybe allow you to make a high enough income to pay back your debt in a reasonable time.
For some that gamble pays off, for others, not so much.
As a personal anecdote: I'm far from being wealthy, but I've always made sure to never have debt. A very good friend of mine, only a few years older, is right now going through personal bankruptcy due to some rather adventurous choices in his younger years.
But he still doesn't seem like he's learned anything. When talking about potential financial investments he always treats me like I'm some kind of millionaire as my good credit history, and meager savings, could easily get me very high loans.
It's like some people see their total credit limit, across several institutions, as their actual own capital in a very naive "As long as somebody is gonna give it to me, it's mine!" way.
Probably you hear about them because they are so notable, like the Dutch family that became world news when they went all-in [0], but there will be many who are over-invested.
[0] https://www.cnbc.com/2017/10/17/this-family-bet-it-all-on-bi...
[0] https://www.cnbc.com/2017/10/17/this-family-bet-it-all-on-bi...
There's this guy who sold his home to put it all into Litecoin. That was in Sept 2016 so he probably did quite well https://www.youtube.com/watch?v=5v5y3icu6YY
More common than you think. If ppl take out debt for cars, vacations, home remodeling, they can do it for crypto currency too
Was that a subtle riff off Newsroom? If not, post well crafted.
Every Bitcoin market decline brings out stories like this. Here's one from 2013 that's worse than anything in the NYT article:
https://www.reddit.com/r/Bitcoin/comments/1r88vl/need_advice...
https://www.reddit.com/r/Bitcoin/comments/1r88vl/need_advice...
He got himeslf in over his head with arbitrage. Hindsight is always 20/20, but if he had waited a bit, he could have turned that into what... a 10 million profit?
Holy moly, I hope that was just some elaborate troll.
Investors? More like speculators, gamblers...
Most people buy crypto because they believe the price will rise and they will be able to sell at profit. Investing is when you buy something that generates profits or utility, for example a share of a company or a house.
Most people buy crypto because they believe the price will rise and they will be able to sell at profit. Investing is when you buy something that generates profits or utility, for example a share of a company or a house.
Isn't that what my 401k is? Sure I get matching contributions from my employer, but I am hoping it keeps rising and that I can sell later for a profit when I retire. Maybe I'm oversimplifying that, but how is that any different?
Because companies exist to create revenue and grow. Revenue means dividend and R&D investment, hence, people spend more to buy those shares because company values are higher. For Cryptocurrencies, you just expect someone else will pay more than you do, but there is no obvious reason why it should be that way forever.
The assets in your 401k (if invested in the market, especially if invested in broad market index funds to be highly diversified) actually have value beyond simply being a speculative asset. They're shares in businesses with a lot of motivations to make a profit, and they're going to continue doing their best to do so, and you benefit from that as a shareholder.
Cryptocurrency is largely a bubble of speculation and get-rich-quick hype with not much actual utility for most people beyond a lot of claims that don't ever really pan out.
Cryptocurrency is largely a bubble of speculation and get-rich-quick hype with not much actual utility for most people beyond a lot of claims that don't ever really pan out.
Nothing new. When you see ads in the subway to buy cryptocurrencies, and you have people buying cheaper coins because they don't realize they can buy a fraction of a bitcoin, this happens.
There is no fast way to get rich if you are dumb.
There is no fast way to get rich if you are dumb.
We still have reality television right?
You are not wrong:
https://www.bloomberg.com/news/articles/2018-07-26/love-isla...
https://www.bloomberg.com/news/articles/2018-07-26/love-isla...
The moment for me is when a Jack in the Box TV commercial mentioned Bitcoin
To be honest with bitcoin currently still over $6,000 there is a lot more pain to come.
I'm with you there -- I just don't see the actual value as being worth that much. Stocks, bonds, commodities, government-backed currencies, they all have clear value other than their speculative value assigned by the current craze of the time. Bitcoin of course has some value, but $6,000 for one unit is certainly inflated. And what's worse, its value fluctuations make it unlikely to be used for what it was designed for: paying for things.
At least with a stock you are a part owner of the company, and you get the rights inherent with that.
At least with a stock you are a part owner of the company, and you get the rights inherent with that.
Bitcoin has been through at least 3-4 major "run ups" already. Those who do not look at the log chart think that "this time it's different" and Bitcoin will surely die for good. Later it'll crash from $250K to $50K and then it will certainly be the end.
2011: $1->$30->$3.
2012: $5->$15->$10.
2013: $10->$270->$80.
2013-14: $100->$1100->$250.
2016-2018: $500->$20000->$6000 (so far).
2011: $1->$30->$3.
2012: $5->$15->$10.
2013: $10->$270->$80.
2013-14: $100->$1100->$250.
2016-2018: $500->$20000->$6000 (so far).
That looks like skillful manipulation to me. There is an important difference with the most recent bubble -- now bitcoin is a household name. Where is the next pool of gamblers coming from?
Greater fool theory works great until you run out of fools! With the amount of attention that bitcoin got, I feel we are close to tapping into the last of the fools.
Institutional investors via Bitcoin futures ETFs[0].
It will likely result in a lot of money flowing into the market via funds and investment houses where investors seek to diversify their investments.
That will probably bring the cryptocurrency market back up to $20K and above. It probably won't happen until 2019 or 2020, though. The SEC is still on the fence about it, but I see it as an eventual inevitability.
[0]: https://www.coindesk.com/sec-bitcoin-futures-etf/
It will likely result in a lot of money flowing into the market via funds and investment houses where investors seek to diversify their investments.
That will probably bring the cryptocurrency market back up to $20K and above. It probably won't happen until 2019 or 2020, though. The SEC is still on the fence about it, but I see it as an eventual inevitability.
[0]: https://www.coindesk.com/sec-bitcoin-futures-etf/
Good grief, I hope that does not happen. I think any professional financial services people who blatantly speculate with clients' funds should be on the hook for criminal penalties. It's one thing for Joe Blow to play the speculation game with his own money, it's entirely different for a professional to do it with everyone else's.
Don't worry, the SEC has now declined to approve two separate attempts at a Bitcoin-based ETF, both times citing the extensive manipulation of Bitcoin markets as one of the reasons. I don't see them changing their attitude given that rampant market manipulation is the main thing keeping Bitcoin alive at all right now.
Trouble is Joe Blow often wants it. You say you want to invest in this thingy that seems to go up 100% a year or nice sensible bonds and quite a few will want the thingy.
Bitcoin does not maintain the higher value due to "more gamblers", it only has value due to "more holders". Gamblers can come and go and affect only the volatility. But people who stay and hold for years and sell only a small fraction to pay the bills.
Sidenote: that last statement is often confused with "rent seeking", which is not the case at all with Bitcoin. Because it's virtually impossible to make more Bitcoin with your Bitcoin. There's no any sort of business that can give you a better return at the lower risk. So you don't live on the "rent", instead you live off "wasting your savings", although if you were patient enough for them to appreciate a lot and you spend <10% a year, you have a decent chance to keep the total value growing and not shrinking as time goes by. But you need to be frugal.
Sidenote: that last statement is often confused with "rent seeking", which is not the case at all with Bitcoin. Because it's virtually impossible to make more Bitcoin with your Bitcoin. There's no any sort of business that can give you a better return at the lower risk. So you don't live on the "rent", instead you live off "wasting your savings", although if you were patient enough for them to appreciate a lot and you spend <10% a year, you have a decent chance to keep the total value growing and not shrinking as time goes by. But you need to be frugal.
Past performance is not indicative of future results.
Then why do people say "invest in the stock market for the long run by buying an index fund?"
> Then why do people say "invest in the stock market for the long run by buying an index fund?"
Because the American economy has historically grown. Buying an index of Austrian stocks on the eve of WWI would have been about as effective as buying cryptocurrencies.
Because the American economy has historically grown. Buying an index of Austrian stocks on the eve of WWI would have been about as effective as buying cryptocurrencies.
Considering that US is getting into debt on an accelerated schedule and runs wars all over the world non-stop since WW2, and has biggest military budget, and otherwise resembles the roman empire at its peak, do you think that musical chairs game will never end?
IOW, taking past performance as indicative of future returns.
Because over time, stocks tend to increase in value, because you are investing in a company that is producing something of value. You have a reason to believe that stocks will increase in value over a long period of time, other than just historical information.
Because of minimizing risk, and minimizing transaction fees.
If you buy 100 stocks and 10 of them go to 0 you are out 10%. However, if the other 90 stocks are up more than 15% then you have gained a little money.
But, if you buy 100 different stocks by hand then you pay 100 different transaction fees and have to keep track of them independently for tax etc.
If you buy 100 stocks and 10 of them go to 0 you are out 10%. However, if the other 90 stocks are up more than 15% then you have gained a little money.
But, if you buy 100 different stocks by hand then you pay 100 different transaction fees and have to keep track of them independently for tax etc.
I'm pretty sure you still need to pay taxes on the dividends even if you're reinvesting them.
Sorry, your right.
There are tax advantages, but it's more complex than simply not paying short term capital gains on dividends.
There are tax advantages, but it's more complex than simply not paying short term capital gains on dividends.
If it's an IRA, there's no tax unless withdrawing.
Because the fees are the lowest and it's been proven over and over again that the number 1 headwind against long-term equity growth is the fee structure.
Index funds require no special knowledge to build...just buy the S&P100 stocks in equal amounts and boom, so the fees for such a fund can be super low.
Index funds require no special knowledge to build...just buy the S&P100 stocks in equal amounts and boom, so the fees for such a fund can be super low.
Amazingly only one of the three replies you got so far understood the point of your comparison.
Past performance doesn't guarantee similar future results.
If you think it's not indicative, then you're rejecting induction, the cornerstone of learning.
If you think it's not indicative, then you're rejecting induction, the cornerstone of learning.
Consider how much money had to enter the market for the price to reach $1000.
Consider how much money had to enter the market for the price to reach $20,000.
Now consider how much money will have to enter the market, after everyday “normal” people from outside of tech have lost hundreds or thousands, for the price to reach $250,000.
Consider how much money had to enter the market for the price to reach $20,000.
Now consider how much money will have to enter the market, after everyday “normal” people from outside of tech have lost hundreds or thousands, for the price to reach $250,000.
The price is the last price paid for the coin. So by definition, if nobody sold any coin, it would only take 250000-6000 dollars for the price to reach 250k.
Its not so much about how much money enters the market, but supply/demand for the underlying asset.
Its not so much about how much money enters the market, but supply/demand for the underlying asset.
Just look at the valuation of the dot-com bubble, which was mostly US driven. The market went up to about $10tn (in todays dollars).
We saw $800bn for crypto at the height, and it's down to about $200bn at the moment.
We saw $800bn for crypto at the height, and it's down to about $200bn at the moment.
Your data shows that it's reasonably possible for it to spike again.
However the sort of mockery of people who do think that it's different this time (and I see it all the time, it's not just you) is sort of funny. As if people who don't have faith in Bitcoin are somehow the naive ones. As if it's established wisdom by now, proven time and again through the ages, that Bitcoin always bounces back and outdoes itself by a factor of 10.
Again, it's quite possible that it will. I'll likely buy in when I get around to it. But this attitude is just a little silly.
However the sort of mockery of people who do think that it's different this time (and I see it all the time, it's not just you) is sort of funny. As if people who don't have faith in Bitcoin are somehow the naive ones. As if it's established wisdom by now, proven time and again through the ages, that Bitcoin always bounces back and outdoes itself by a factor of 10.
Again, it's quite possible that it will. I'll likely buy in when I get around to it. But this attitude is just a little silly.
And it'll keep going to quadrillions of dollars, right? Obviously there's a limit somewhere. It seems reasonable to think that $20k is already pushing it.
The limit is somewhere near M2 of planet Earth. Thats quite a high number! something like $10M USD/coin. Would be nice.
due to the mining aspect of bitcoin, unlike a stock, it does a a sort of floor, but that too can eventually fail
How does mining set a floor?
let's assume it costs $4k to mine a bitcoin. If the price were to fall to $10 or some extreme low value, the miners would see no reason to mine. Therefore all activity would stop. But in order for existing bitcoin holders and merchants to use bitcoin, they need transactions confirmed. So this will lead to the price rising to an equilibrium where the miners will mine at a loss and merchants and hodlers will sell at a loss which is optimal for both than if the price is too low.
cost to hash, in electricity. If the cost of mining is greater than the price of the coin, the miners turn off their hashboards. Some like to think of this as a floor, however if everyone turned off their miners the system would fail to produce blocks. The network difficulty will take 2 weeks to adjust, and the miners will start mining again if it is profitable.
If the difficulty adjusts down to make mining profitable, that's because the miner is earning more coins, but each coin is still worth less than before.
Not necessarily. While there is a positive correlation to hashrate and price, the market sets the value of the coin.
Just because miners are making more or less coins does not make them worth less or more. Miners choose when and if they release the coins to the market.
Just because miners are making more or less coins does not make them worth less or more. Miners choose when and if they release the coins to the market.
It doesn't, it's the other way around. Price sets a floor on hash rate.
Isn't this kind of thing the whole reason we have accredited investor laws? This might be an unpopular opinion, but if we want to protect people from themselves, maybe we should stop banning people from investing in private equity and start worrying more about exotic stuff like crypto. It seems utterly absurd to me that I'm not allowed to buy a single share of Uber or SpaceX, while sinking my life savings into whatever obscure cryptocurrency I choose is perfectly legal.
I'm unclear on why we wouldn't just ban both things.
The reason you can't buy a share of Uber or SpaceX is, effectively, that those companies don't want your money. Both could easily do a public offering and admit you as a shareholder, but choose not to.
Further clarity: I'm "accredited", and I don't think I can buy a share of either company either.
The reason you can't buy a share of Uber or SpaceX is, effectively, that those companies don't want your money. Both could easily do a public offering and admit you as a shareholder, but choose not to.
Further clarity: I'm "accredited", and I don't think I can buy a share of either company either.
That's not the only reason you can't buy a share of Uber or SpaceX. There are probably hundreds of employees who would jump at the chance to sell some of their vested shares. There are some secondary markets where you have to be an accredited investor, but most startups will block the transaction.
P.S. I think it would be a very good idea to buy some Uber shares before their IPO. Maybe try EquityZen [1].
[1] https://equityzen.com/trending/uber/
P.S. I think it would be a very good idea to buy some Uber shares before their IPO. Maybe try EquityZen [1].
[1] https://equityzen.com/trending/uber/
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Yes, the whole startup-to-corporate-acquisition-or-ipo funnel is an elaborate fraud and even the government is in on it. It's why many people invested in crypto in the first place.
They could do public offerings, but that comes with a lot of legal and regulatory requirements and expenses, accounting rules, disclosure rules, etc. etc. Not all of those things are necessarily bad; ostensibly they are there to protect public investors, but they do sometimes discourage companies from going public that might otherwise want to do so.
But sure, maybe Uber and SpaceX aren't the best examples. Not sure if I'd even necessarily invest in either of them myself, but I thought they made for relatable examples. For a more real-world case, I'd love to be able to invest some money with the solar funds run by Wunder Capital, and that seems a lot safer than crypto, but that's off-limits to people like me as well.
But sure, maybe Uber and SpaceX aren't the best examples. Not sure if I'd even necessarily invest in either of them myself, but I thought they made for relatable examples. For a more real-world case, I'd love to be able to invest some money with the solar funds run by Wunder Capital, and that seems a lot safer than crypto, but that's off-limits to people like me as well.
Most well-run startups do not want to sell you their shares, among other reasons because they become liable for a whole bunch of new investor relations torts once they do so. It's not just Uber or SpaceX that won't take your money; it's (I believe) most startups that ever hope to raise money institutionally later on.
Regulations were never designed to protect the working class. They're designed to protect the bourgeoisie from the working class.
Regulations rarely work as advertised; however, their 'unintended' side effects do seem to be quite effective in terms of creating artificial barriers to prevent the working class from moving up.
Regulations rarely work as advertised; however, their 'unintended' side effects do seem to be quite effective in terms of creating artificial barriers to prevent the working class from moving up.
Just going to say that I loved my Zip drive!
True! Before USB drives they were great at the job.
And my unit wasn't affected by the click of death apparently.
And my unit wasn't affected by the click of death apparently.
22 year ago, in 1996, 5 years before the dot-com bubble burst
[deleted]
Minidisc, anyone?
I still do not really understand why this wasnt more successful (at least by the time CDs existed/were used)
I still do not really understand why this wasnt more successful (at least by the time CDs existed/were used)
Why MiniDisc wasn't more successful, or why Iomega wasn't more successful?
For Iomega, it was because of terrible quality control, leading to fiascos like the Zip drive "click of death" (see https://en.wikipedia.org/wiki/Click_of_death#Iomega_Zip_driv...). A storage vendor whose products develop a reputation for frequent, catastrophic data loss isn't going to stick around long.
For MiniDisc, it was because MD didn't offer a clear leap up from what you could get from compact discs, and because Sony couldn't help but be Sony and go off and develop their own system while everyone else in the industry was using a different one (DCC: https://en.wikipedia.org/wiki/Digital_Compact_Cassette).
For Iomega, it was because of terrible quality control, leading to fiascos like the Zip drive "click of death" (see https://en.wikipedia.org/wiki/Click_of_death#Iomega_Zip_driv...). A storage vendor whose products develop a reputation for frequent, catastrophic data loss isn't going to stick around long.
For MiniDisc, it was because MD didn't offer a clear leap up from what you could get from compact discs, and because Sony couldn't help but be Sony and go off and develop their own system while everyone else in the industry was using a different one (DCC: https://en.wikipedia.org/wiki/Digital_Compact_Cassette).
For the majority of people this is obviously true, but my MD was so much better than my Discman. I could record MDs and it was rock stable, while the Discman (even the later models with buffer) would jump all the time. Would have loved to own DAT, but was too expensive.
For zip drives, also because it became cheaper and faster to burn a CD, then came usb keys.
Still have my minidisc somewhere, loved it. Though I think my latest was from Sharp and I could record, not from Sony.
that must suck..to have the misfortune of buying that stock instead of AOL, Cisco, Oracle, Intel, Dell, Microsoft..anything else would have been better. It goes to show how you can lose money even i n a boom if have bad luck, but also a good reason to diversify. .
Liquidated enough bitcoin in February of this year to payoff my mortgage. Owe a significant amount in taxes next year. Token investment from 2013 paid off, was time to exit based on articles like this.
Never shilled or advised others to "invest" because the best time to sell is when everyone else is buying and I understand how pyramid schemes work.
Got took for a ride in every major ponzi, scam, etc prior to 2014 seeking interest... greed. Hello, hi! HN - I know you don't like the bitcoins.
Never shilled or advised others to "invest" because the best time to sell is when everyone else is buying and I understand how pyramid schemes work.
Got took for a ride in every major ponzi, scam, etc prior to 2014 seeking interest... greed. Hello, hi! HN - I know you don't like the bitcoins.
When everyone starts talking about cryptocurrencies, one should stop investing. A variant from a stock market quote.
Yeah, last year when my 76 year old mother asked me about bitcoin, I knew the bubble was about to pop. I've never been a bitcoin gambler myself, and I told my mom to stay the hell away as well. That continues to be my advice.
I still think it looks like a big well-constructed scam designed to pull vast amounts of money from starry-eyed naive people and transfer it to a very small number of sharks.
I still think it looks like a big well-constructed scam designed to pull vast amounts of money from starry-eyed naive people and transfer it to a very small number of sharks.
that is not a reliable indicator though. I remember a lot of non-tech people talking about bitcoin in 2013. Even at $100-250/coin it was getting a lot of media coverage.
It raised up to $1000 at that time and followed by a great drop to 100-ish and stay that level... but I don't know why it went up so much this year.
I don't like that gambling (on an obviously ponzi like scheme) is called investing.
That started a long time ago. Buying stocks that pay no income is also referred to as investing, even though it is more accurately gambling as well. At least with stocks there is something with a more convincing value proposition.
C'mon, some stocks don't pay anything because there are better ways invest their profit. You still own equity in something tangible and generating value most of the time.
Sure, but you are gambling that their reinvestment will raise their stock value in the long run so that eventually you will make money. It's still a gamble, though.
It's an investment. You buy equity in something that produces value. Paying dividends or not is a non issue. Sure there is risk but it's different than buying lottery tickets or imaginary internet money. Conflating the two in the eyes of the public was great success of crypto currency pump and dumpers.
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It's zero sum. All those losers are needed to power the boom.
I'm so glad to see naive investors learning that cryptos are a scam. Now they can get back to real investments like social media apps and cloud computing.
Made the opposite mistake. Called this a bubble way to early (Like $1 per coin) territory and refused to put money into it.
Pretty spectacular fail right there.
Currently trying to apply the above life lesson to investing in weed companies. It's a bit more difficult though since they have more plausible substance so it's more murky in a way.
Pretty spectacular fail right there.
Currently trying to apply the above life lesson to investing in weed companies. It's a bit more difficult though since they have more plausible substance so it's more murky in a way.
> After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors
After the Bitcoin Boom: Hard Lessons for Crypto"currency" gamblers.
FTFY.
After the Bitcoin Boom: Hard Lessons for Crypto"currency" gamblers.
FTFY.
Any activity that simply involves spending money and not enough sweat equity is not an investment but rather speculation. Doesn't matter if you are buying stocks or real estate, and most definitely so with all cryptocurrencies especially when you are not mining.
I appreciate being the opposite of this story. Bought into an ICO five years ago, forgot about it, remembered early last year, diversified into more tokens but had a feeling to pull out when BTC was $18k. Sold 95% of my entire portfolio.
Just out of curiosity, how does it make you feel knowing your gains were at the expense of not very fortunate or rich people losing out around the world - unprotected because of the newness of the “investment” type - by investment laws. I made a modest return on a bitcoin investment, felt shit about it, and donated all the return to charity.
Nobody had a gun to the buyers/sellers head. Everyone knows what they are getting into, and markets are a zero-sum game. I have no ethical issues with making profit from trading. I'm sorry that you were not able to take the win. Maybe you should not play games?
You’re right, no-one got their guns out. But that isn’t how confidence tricks tend to work. I think the reality for a lot of the losers -globally - is that they were kind of desperate, desperate enough to believe that there was some immediate answer to their cash needs. I started off believing in the crypto dream, but last year started to realise it was not what I thought it was.
It would be really nice if we could get financial literacy and basic investing taught in high school.
Corrected title: After the Bitcoin Boom: Hard Lessons for n00b crypto Investors
That doesn't even make sense. Anyone that is attempting to invest in crypto is a noob, even the ones that claim to be 'experts'. Nobody had any type of signaling to predict a price deflation for any of the crypto assets.
The hard lesson is about timing, not about expertise.
Not 100% true. It's a small market full of inexperienced investors. It's easy enough to play it as such and come out a winner. For example, all the price movements are exaggerated because novice investors lack emotional control -- they get too greedy when the price is going up (magnifying the upward trend) then sell in a panic when the trend starts to reverse.
I often make better returns in a sideways crypto market than buy-and-hold gives me in the stock market.
I often make better returns in a sideways crypto market than buy-and-hold gives me in the stock market.
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As a day trader for about 5 years, I could (and did) almost perfectly guess the price runups after breakouts, and knew 20k was sell time...it was a super easy chart to read in fact.
All the moves were textbook.
All the moves were textbook.
Not really. If you had experience trading other financial markets it was way easier. Because the crypto markets are still quite small, they are very inefficient, thus it's much easier to make money here than in the stock market for example.
> Anyone that is attempting to invest in crypto is a noob
Undoubtedly many are, probably even a majority. But what makes you say everyone is? To me the probability of that is close to zero.
Undoubtedly many are, probably even a majority. But what makes you say everyone is? To me the probability of that is close to zero.
Signals were given. The RSI and stochastic RSI both gave loud signals that a reversal was going to take place when it did.
> “I got too caught up in the fear of missing out and trying to make a quick buck,” he said last week. “The losses have pretty much left me financially ruined.”
I think it's distasteful to criticize the decisions that lead to someone's downfall, but maybe someone will read this and take heed for the future. If losing $19,000 will genuinely leave you financially ruined, cryptocurrency is way too high risk of an asset to get involved in.
I feel bad for him and hope nobody ends up in the same spot.