Quote:
Originally Posted by data_mine
that's true of any and all investments.
whether it's crypto, shares, gold, property, you only make money when someone else pays more for it than you did.
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The US stock market is not a zero sum game. It has increased 9% per year on average for decades as the real value of businesses increase. Property values increase because the supply is limited in locations that are attractive to buyers, such as proximity to a city or a coastal hub.
Crypto is tokens created by software that speculators buy in the hope that others will come along tomorrow and join the party. As an investment it is like the old chain letters with promises of a windfall down the track. If the number of new buyers dries up, crypto values will go into free fall.
Bitcoin is pretty much useless as a currency. There are plenty of other cryptos that outperform it in speed and capacity, but they too are unlikely to make a transition to common use as a currency.
If speculators enter the crypto market in the knowledge that what they are buying is a bunch of gambling chips then at least they understand the game they’re playing. If they go in thinking they’re investing in the currency of the future or because blockchain is a great new technology then they’re deluded and sucked in by the hype. Although, having said that, if they time their exit fortuitously they might end up deluded but wealthier. Or they could lose the lot.