With cryptocurrency it is the same. The combination of zero consumer protection and anonymity is the perfect breeding ground for fraud. If you were being charitable, you could call converting fiat money into cryptocurrency a gamble, but certainly not a sound investment. The only people who will try to convince you otherwise are those set to gain from the fraud.
How you become sure you have as much information about the subject as the person you're dealing with (i.e., whether that's because it is required by law and you expect to have some recourse if it's violated, or because you are confident that you've had access to the relevant information for some other reason) isn't really important.
They’re both inherently high risk, but the value derives from different things. With small caps, it’s the idea that one or more may grow to produce outsize returns in the future, whereas the other is hoping someone will come along later with more money to take you out of your position.
(The small caps for the most part aren’t attracting money based on popularity or memes, so are closer to high-risk investing than gambling on speculative assets).
An investor in that situation has to (presumably, and I'm ignorant so maybe not) do work in doing research, having enough domain and industry knowledge to evaluate what a "winner" looks like in a given industry, understand how valuations are formed and what can make them wrong, etc etc.
Some of that is done by crypto people sure, but the difference between a big success and losing your money there seems a lot more luck-based than in normal investing.
People have been making the argument that investing is gambling for decades at this point, and I don't think that's completely wrong but it is very hard to draw the line. I am comfortable putting crypto trading on the gambling side of that line, and most forms of professional investing probably on the non-gambling side.
They are possibly a lot closer than I think they are, but I don't think that speaks well for either activity!
Literally the only way you can profit with stocks is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.
Except, of course, if you live in it, rent it out or use it as businesses asset. Good luck doing that with crypto.
> Literally the only way you can profit with stocks is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.
Except, of course, that you as a shareholder can influence the direction of the company and earn dividends. Good luck doing that with crypto.
- Real estate has real-world use cases
- Stocks have real-world use cases
- Bitcoin has real-world use cases
It's meaningless to describe any of these as pyramid schemes because "to profit you must be able to sell at a higher price to someone else". That's true of buying or selling anything.
I recommend not storing your password with your coke.
I'm afraid your comment doesn't make much sense.
There are people using Bitcoin as a currency, via lightning, right now. More join all the time. The network expands.
It is a currency, is used as a currency, as sats. It is also a long term store of value as Bitcoin. You can ignore reality as much as your like, but the world has moved on from your 2017 era complaints.
It is wildly practical today, and there are several good custodial solutions if you do not wish to run a node yourself. Please give it a try!
How does that differ from other commodities trading? The only way to profit in the futures market is to buy low and sell high, too, for instance.
The "and use" phrase is what differentiates commodities from cryptocurrency.
It doesn’t. Trading is zero sum. It supports the extraction, processing and delivery of useful things, however, which is positive sum.
Trading between financial participants is, cetiris paribus, always zero sum. Irrespective of the timeline.
Buyer's gains are the seller's opportunity cost; buyer's losses were avoided by the seller. (Paribus violation is when parties have different funding costs.)
Moving commodities around isn't trading per se; it's logistics. Again, value adding.
Only if you consider the trade in the quantity of the goods traded, and not in a prevailing unit of accounting.
Nope, this is microeconomics. If you and I have the same funding costs and we trade a commodity derivative, any gain you have is a gain I gave up. Any loss you have is one I avoided.
This is true irrespective of the unit of account of point in time at which one measures it; it's an identity. The only
Someone who buys wheat, holds it and sells it the next day is definitely not “trading”, he merely engages in a series of discrete trades? Daft.
I don't think this is any more a fact than my statement. I'm merely trying to point out that you seem to be saying it's ok to invest in what people perceive as a scam (my example was pyramid schemes) because it's an investment.