From the wiki for Ponzi scheme-
> The scheme leads victims to believe that profits are coming from legitimate business activity (e.g. product sales and/or successful investments), and they remain unaware that other investors are the source of funds.
TSLA has a P/E of 1,181 right now. Peloton is 1,660. Amazon is even 80. How is it any different right now?
Bitcoin lacks that, it only has money from new investors and it loses money from mining. Which means without new investment it’s value must crash which creates incentives for people that own Bitcoin to convince others to buy Bitcoin.
The only way to argue Bitcoin has long term value is it must provide inherent utility like land. Increasing the number of transactions per second would be one way to demonstrate that value, but talking about future value doesn’t.
Currencies aren't inherently valuable, but a measure of value and a medium of exchange. If you couldn't buy things, or settle your debts (taxes), with US dollars tomorrow they'd be worthless.
Something that is valuable, and is either subjectively or objectively going to become more valuable, is an investment.
You can make a case for almost anything being an investment, since value can be subjective and speculation is rife
The issue is crypto currency is a digital asset so you need a buyer to do anything with it. That buyer could be a 3rd party uninvolved in the transaction, but someone needs to hold it after the sale even if it’s just to look for the next buyer.
when was the last time TSLA paid out a dividend?
>Boeing, which has been struggling for the past year with the safety of its 737 Max jet, has spent over $43 billion buying back stock over the past decade. The six airlines—Southwest Airlines, Alaska Air, Delta Airlines, United Airlines, American Airlines and JetBlue—have spent about $47 billion over the same period.
https://www.newsweek.com/boeing-airlines-under-fire-90-billi...
If you own X% of a company and it buys back 20% of it’s shares, congratulations you now own 1.25X% of the company. If you don’t want 1.25% of the company sell 1/5th and it’s equivalent to a dividend. Alternatively, if it does this for long enough without you selling then you end up owning 100% of the company and the next buyback is again equivalent to a dividend.
The point is that the company is pumping share price, not through actually creating value, but by tweaking but by engineering scarcity, and othogonal to the corporation's reason to exist. GP is conflating the end to which buybacks are a means with the actual goal of what Boeing was colloquially for; baking safe airplanes.
This more pervasive than anyone in the business world wishes to admit.
With dividends you can't really rely on a future amount, i.e. you can receive more (or less) than you actually need. Also it can come at a different date that you want. Plus creates a tax event event when you maybe don't want to have it. And so on.
So it become more convinient to just have stock which you sell when you want and you sell exact amount as you need to. Also the tax rate on dividends is usually higher, especially if you hold the stock long enough.
You can buy real estate and generate returns by renting it out. A smart real estate investment can generate money for y you regardless if its market value.
Stocks are the same: they represent a real piece of a company. If the company doesn’t issue dividends, the value is retained in the price of the stock. Warren Buffet almost never sells stock, his whole strategy is to hold forever.
Stocks and real estate are zero sum in the short term. In the long term, they are not
Unless it loses 50%+ of value suddenly. Then it may take you 10+ years to return back to profit.
>> If the company doesn’t issue dividends, the value is retained in the price of the stock.
Unless your company go bankrupt. You may lose the whole investment.
You didn't understand what I said. It doesn't matter about short term fluctuations of market value. If you are pulling in rent (or not paying rent because you are using the house) then it doesn't matter what the market price is right this minute. Flipping assets in a hot market is a zero sum game, and is more akin to gambling than capitalism. Traditionally capital generates profit by producing real value, in this case by providing shelter to you, or to someone paying you. Ownership of a company is the same thing (that's what a stock is). It produces value or provides a service.
This is a thread about bitcoin. Which is a virtual (read intangible), currency whose value is determined entirely by other people's belief that it is worth something. It can't be used for anything except as an incredibly unstable store of value. It can't provide shelter, people won't give you real value to temporarily hold it. Bitcoin as an algorithm is unkillable. As an investment it is, very, very fragile.
If I were sitting on a bunch of USDT, but I wanted to be holding USD stablecoins, just generally speaking, why not swap them into a different stablecoin?
Maybe another question I should be asking is what proportion of Tether is being used to collateralize leveraged long positions in other crypto assets? Maybe that's why this is a tinder box?
Sorry for all of the questions, but legitimately trying to understand what people are talking about.
It's an interesting time in the history of bitcoin as we are starting to see a move from small speculators (number go up) to institutions buying in (it's sensible to diversify 5% of your portfolio into crypoassets as they have historically high returns and low correlations).
Its just wrong to think all people in crypto are evangelising others into their ponzi investments
I mean I wish I had listened because BTC was $50 a coin the first time someone tried to convince me to buy in.
I see lots of people fall into the "If I only had done X back in year Y, then I would be rich." fallacy. No, you wouldn't be rich, because the information available at the time didn't justify such a decision. If that information were available, Bitcoin would have been worth $60k in 2009.
Right now nobody can tell you what will happen to Bitcoin, because all available information is already priced in. At this point it might go up but it might go down as well.
The crypto-famous NFT collector “Silver Surfer”, known for dropping hundreds of thousands of dollars on NFTs [1], tweets “celebrities that fail to get engaged with their communities will continue to have weak secondary [NFT] sales.” [2] That’s weird, I wonder why the money would stop flowing if the artist stopped tweeting about NFTs? Doesn’t their art still have value?
The truth is, if you spend enough time around the crypto art community, you realize that there aren’t any “real” art collectors in the space. There are crypto speculators, and there are artists who feel obliged to “engage with the community”. The lack of real money flowing into the space is what leads me to label this as a marketing campaign, as opposed to a completely organic movement. It’s a somewhat decentralized marketing campaign, but it’s a marketing campaign nonetheless.
[1] https://twitter.com/makersplaceco/status/1359654252944105473
[2] https://twitter.com/7Surfer7Silver7/status/13827818844433367...