Lessons learned buying cryptocurrencies

Discussion in 'Money, Investing & Precious Metals' started by BillS, Oct 21, 2017.

  1. BillS

    BillS Well-Known Member

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    Back in May I made some quick money buying Ethereum. After that I tried selling when it dropped and buying it back when it went up again. Ultimately I lost some of the gains I would have otherwise made.

    I also bounced around between Ethereum, Bitcoin, and Litecoin. There were some big price drops. By September 22nd I had managed to turn $2100 into $1185.88.

    I finally decided to just buy Bitcoin and hold it regardless of where it was on a day to day basis. In the last month it's risen faster than the other two. It went from a low of $3560 to $6120 today. So now I'm at $1961.31. I'll break even when it hits $6544.

    There are signs that Bitcoin is going to keep going up. CNBC reported in a survey that the majority of people surveyed think Bitcoin will hit $10,000.

    Then you have articles like this:

    https://www.cnbc.com/2017/10/19/josh-brown-goes-down-the-bitcoin-rabbit-hole-commentary.html

    Here's just part of it:

    The percentage of people in this world who are even aware of crypto currencies or their potential is effectively zero. The asset class itself is only $170 billion as of this week. That sounds like a lot, but compared to other asset classes or commodities or currencies, it's a joke.

    The stampede is coming

    I mentioned a few weeks back that you can practically smell it in the air – the big money is coming into this space. I can't imagine how that doesn't blow the price up into the stratosphere. For all of Jamie Dimon's protestations, his firm is experimenting with cross-border transfers using blockchain. So is every other major financial institution – or at least they're thinking about it and planning it.

    The big rumor going around is that Goldman Sachs is going to launch market-making in crypto currency for their clients in the third quarter of 2018. I don't know if that's true or not, but multiple people who don't know each other are saying it. And why wouldn't they? If that's what their customers are asking for (and they are), then of course they will. This is the institutionalization of something that right now is still on the fringes of finance. What will that mean for the prices of coins?

    Pensions and endowments

    Another thing that was kind of hinted at – pension and endowment money dipping a toe in. We're talking about trillions of dollars in these pools. If even 1% of that starts looking for allocation, forget about it. Ari Paul from Blocktower says the pensions aren't coming in until the custodian issues are worked out. With a traditional investment like a stock or a bond, your big risk is that they will drop in value. With crypto, you have that issue too, but then you have an added risk that you don't have with stocks and bonds: Your holdings can disappear from theft! Nobody worries about their stocks being stolen. Everyone worries about their coins being hacked. Solidifying the custody system is going to take time.

    Ari mentions that someone asked him "When will the University of Chicago buy in?" His reply is "Six months after Yale does." Everyone laughs. But it's true. The way Ari looks at it, right now, if someone at a college endowment takes the risk upon his or herself to buy Bitcoin, they face ridicule or a firing. But eventually, that career risk flips around the other way. Imagine someone from the Yale Endowment makes a splash in Bitcoin and gets written up everywhere for how forward-thinking they are. All of a sudden the CIOs at all the other endowments are being questioned "Why the hell didn't you do that? Did you even look at it?" This is how manias are fueled, by the way – institutional a-- covering. They all did this with hedge funds in the 90's and commodities in the 00's. It hasn't begun yet in this arena.

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    My comments:

    Bitcoin is up 864% in the last year. I see no reason why it won't be $50,000 in a few years.

    It doesn't matter that a single Bitcoin is $6120 right now. You can buy it using any amount of cash that you want. $1000 in Bitcoin could easily outperform any other investment over the next three years.
     
  2. bbqjoe

    bbqjoe Void where Prohibited

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    Way over my head.
    I'm guessing if TS ever hits the F, they won't be worth squat, and you won't have access to them anyway with a downed grid.
     

  3. bkt

    bkt Well-Known Member

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    "Buy low sell high" isn't over anyone's head.

    Dumping some cash into bitcoin (or ethereum, litecoin, etc.), letting it rise in price 20%, then heading over to APMEX or Provident Metals and buying silver or gold as a means to preserve wealth isn't a dumb idea at all.
     
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  4. Flight1630

    Flight1630 Junior Member

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    ContinualHarvest likes this.
  5. RedBeard

    RedBeard Guest

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    I don't even have a bank account for my real money. Maybe i have trust issues... No way im buying fake money.
     
  6. dademoss

    dademoss Supporting Member

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    I count on lead, brass, and the supplies in my pantry, everything else is a maybe.
     
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  7. VoorTrekker

    VoorTrekker Inconspicuous Been Around Guy

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    The stupidest question is the one which will never be answered.

    How do I buy Bitcoin? Is there a brokerage? What are the advantages of Bitcoin?

    What is Bitcoin and why is it in existence?
     
    angie_nrs likes this.
  8. bkt

    bkt Well-Known Member

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    There are several and a quick google search will describe the process. See here, for example.

    From an investment perspective, short-term growth lately has been outstanding.

    If you want to learn what cryptocurrencies are, how they work, and what the appeal is, there's no shortage of info on youtube and google.
     
  9. bkt

    bkt Well-Known Member

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    Yeah, so do I, but I also have a 401k, Roth IRA and other means of preserving wealth. If you're not into saving, cool. Most folks are, and cryptocurrencies can help accelerate the rate of wealth accumulation.
     
  10. bkt

    bkt Well-Known Member

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    You think U.S. dollars are real money?
     
  11. azrancher

    azrancher Pretty cool guy

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    You send me your worthless $$$ via PayPal, and I will make the transaction for you. You can buy bitcoin on most street corners in Detroit. The advantage of Bitcoin is it's not backed by a worthless government, in fact it's not backed at all, so the Government doesn't know who owns what, and if you have to pay taxes on your gains, then you must use $$$ and not BC.

    Why is it in existence, well PT Barnum didn't say this but one of his circus competitors did,... There's a sucker born every minute.

    Rancher
     
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  12. crabapple

    crabapple I sold my soul to the internet

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    Do not do Crypto.
    But stocks gave me over 300% profit.
    Timber was free, no cost to me & all the pine straw & dead limbs I could use.
    Made good on land sale.
    I do not know anything about Crypto, I will stay with what I know.
    Maybe more copper, brass & silver.
     
  13. dademoss

    dademoss Supporting Member

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    Me too. I have IRA's, Roths, etc etc etc, whatever my Wealth Manager says I need. Bonds, stocks, the list is endless.

    It's all numbers on a screen when the EMP goes off, so what I have in HAND is what I count on. Blacksmithing skills, gardening, livestock, water, shelter, pantry, THAT IS WHAT IS REAL.

    Gold and silver? Trash unless you find somebody to trade for it. Bitcoins are even worse, who will take your printout of "WEALTH? when you want a rabbit to eat? I have coffee, you have a shiny metal thing. All I will say is "YUMMM, coffee".

    Just saying, you pursue your "wealth" , I will pursue mine.
     
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  14. bkt

    bkt Well-Known Member

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    I agree 100%.

    History says differently. So does the guy I bought an M1 Garand from with PMs. I don't trust crypto any more than I trust conventional currencies, which is why I use cryptocurrencies to buy PMs.

    I'll go out on a limb and suggest pretty much everyone here agrees up front that the most important issues at hand are exactly what you mention: skills. If you haven't developed your skill set and don't have a means to see to your immediate needs, please don't waste your resources on cryptononsense.

    But taking things a step further in the context of wealth preservation in the event the currency du jour craps out is what this thread is about.
     
  15. RedBeard

    RedBeard Guest

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    Valid and good point!
     
  16. RedBeard

    RedBeard Guest

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    No but it's at least printed monopoly money. Full of stripper dander, cocaine, and other who knows what. My savings is not made up of anyones fake money. ....
     
  17. Meerkat

    Meerkat Seeking The Truth

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    Buying Cryptocurrency may be your 'Cryptonite,

     
  18. BillS

    BillS Well-Known Member

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    A year ago today Bitcoin was trading at $700. Now it's trading at over $7000. What if it's trading at $70,000 a year from now? I'm guessing that 90% of the people who are against it now will still be against it a year from now even if I'm right.

    I don't plan on cashing in any Bitcoin anytime soon but when it hits $10,000 I'm going to buy a brand new $1,000 Alienware desktop computer to celebrate.
     
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  19. rhrobert

    rhrobert Happy in the hills

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    lol, when it hit $7100 last week my son cashed out and bought a quadrunner. He bought his btc at $75 per :)
    I, like BillS will be holding mine until the 10,000 mark..unless I see something I don't like.
    As before, crypto helped build my house and buy the equipment. Naysay all you want, I'm far better off now.
     
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  20. SheepdogPRS

    SheepdogPRS Newbie

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    Electronic money, paper money and paper shares in precious metals are all fake money. All of that will disappear in a grid down event. The money you have in the bank will be inaccessible, your stocks and bonds are not available, your bitcoin account is gone, and that gold that you had shares in is gone. You have the cash in your stash that will work for a day to maybe a week after and then there is no money. There will be little need for gold or silver because people will need clean water and food. After a week people will need waste removal and medical goods. Gold and silver can protect that wealth for after the bad times but it will carry very little value during the event.
     
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