Classic gold rush pattern: the people who outfit the miners do better overall than the vast majority of people who do the mining.
(Generalizing here, but seems similar to California in 1849, Yukon in 1898, and several others)
(Generalizing here, but seems similar to California in 1849, Yukon in 1898, and several others)
Anyway - I couldn't help but the whole time imagine being in the year 2078. And viewing a museum (of course a VR digital-museum) about the Crypto rush of the 2010s. Likewise digging up old messaging board posts about striking gold in Ethereum. Outfitters claiming their boards could mine faster than the competition! The wild-west mentality, and the crime that occurred around it. You press a button on a wall and hear an audio recreation of someone leaving their job to strike it rich.
I was initially skeptical of cryptocurrencies because I looked at the motivation of their biggest evangelists and was like "They're just bitter because other people are rich and they are not". I changed my opinion after realizing that "other people are rich and I'm not" is perhaps the biggest motivation in history. Aside from creating Seattle and San Francisco, it's also responsible for the settling of the Americas, the original gold rush.
> Losses can result from a number of activities such as; sale of an asset for less than its carrying amount, the write-down of assets, or a loss from lawsuits.
Seems like some action needs to be taken for it to be considered a loss.
Technically if you hold an asset that’s traded down to 0, you haven’t realized the loss yet. But the average civilian would say that you’ve “lost everything”.
In fact for marketable securities (which Bitcoin could be compared to, for some values of 'marketable' and 'securities'), GAAP requires unrealized gains/losses to be applied to the book value to bring it into line with the market value [1].
[1] https://www.accountingtools.com/articles/what-is-the-differe...
EX: If a hotel chain was destroyed by a hurricane it's stock price would drop for both cash flows and the value of properties, not when they tried to liquidate the properties.
First, there's a difference between an assets trading value dropping, and it being physically destroyed. With the former you can continue to hold and hope that price recovers, with the latter there is no hope that the hotel will reconstruct itself without serious cash expenditure.
Second, a hotel chain is both property and the ability to generate cash flow. If that is destroyed, the company's ability to generate more revenue is eliminated. Financial assets used for speculation typically do not generate a large amount of cash flow while sitting idle. Instead there's the expectation that they can be sold later for a profit (ideally).
Finally, there is an important disconnect between a company's assets and its stock price, since the stock price represents an expectation of future profits. If traders think that BCash will rise in the near future, they might vote up Bitmain stock before the underlying assets move in the slightest.
But, assuming a company had an insurance payout for their property: Then they go from cash flow A + property's worth X, to cash flow 0 + property's worth Y + insurance money in a bank account. Under your method because Y is undefined you assume it's X and then add the insurance money to the total valuation. That's really not what happens.
I don't disagree that cash flows could increase the value of the company. However, the value of assets really are part of the equation and get updated when the value of those assets change.
If the answer is yes, wouldn't you do the same thing if you bought at 20k - and say you lost a lot of money?