More than half of Bitcoin investors are in the red, study says
money.com
money.com
If i'm understanding the methodology here, the assertion that it translates to investors is really flawed. You can't assume:
- a transaction appearing on chain constitutes a buy
- that the transaction represents 1 investor
- that 1 investor = 1 address
Whether the bitcoin holder sees it as a loss of value is beside the point, since purchasing in bitcoin is hard still.
It's like using Euros in the US. Some folks accept them, but generally dollars are preferred.
I’ll give you an example, I bought at BTC $36k last month and just withdrew it from exchange after all the fiat cleared in from the legacy banking channel today. It hit the chain when BTC was $42k, so these jokers would think the cost was 42. You can’t get an accurate picture from on chain data alone.
A better analogy would be like looking at clearing house data, and examining the net number of shares bought or sold at each broker, to determine how many individual investors are in the red. Even though the price changed throughout the day and you're only looking at the price at settlement time. And the net doesn't tell you anything about how many investors actually traded.
It's the civil libertarians, criminals, and tech aficionados that hold Bitcoins in unhosted wallets. When there's on-chain activity for these groups, though, it's usually a transaction rather than a trade. They hold Bitcoin for the activities they can do with it, not for any hope of the price rising.
The way they measured this may not be meaningful, though.
For example: https://www.cnbc.com/2022/02/12/23-year-old-texans-made-4-mi...
> if you bought in 2014, we would know that [someone] bought at 5pm CDT
But if I bought BTC on an exchange, e.g. Coinbase, then that purchase would not necessarily be recorded on the blockchain, right? Just CB internally updating a value in their DB. All BTC buying and trading would be a larger superset of the collected data.
Also if I transfer 1 BTC from one of my wallets to another, then that counts as a buy/sell transaction for this dataset!
It also implies that Bitcoin, at the range between $42K (current price) and $65K (all time high), gained half its user base, they were all first time purchases, and yet despite all that growth and buying, and division of liquidity, the price still fell 30%.
Not all equities will be a good investment but equities in aggregate are positive sum. Cryptocurrencies are negative sum or zero sum depending on consensus mechanism.
[1] https://www.fool.com/investing/how-to-invest/stocks/day-trad...
[1] https://news.ycombinator.com/item?id=13844765
[2] https://www.investopedia.com/ask/answers/12/difference-inves...
It's a second derivative tradeable only via third derivative.
This is very very zero-sum.
The overwhelming majority of these actively managed funds fail to beat the returns of the S&P 500. [1]
In fact over 15 years 92% of actively managed large-cap funds trail the returns of the S&P 500.
Stop trading.
[1] https://www.cnbc.com/2019/03/15/active-fund-managers-trail-t...
[1] https://www.cnbc.com/2019/03/15/active-fund-managers-trail-t...
Bitcoin, on the other hand, has a few things going for it (fixed monetary policy, decentralization, permissionless, ...) but I am not sure about the intrinsic value. The only thing that I can think of is its network effect and derived amazing hash power that secures it. You can't recreate that easily in a new cryptocurrency.
Gold is useful for less tangible purpose because it's accepted, and it's accepted because it's useful. BTC is similar in that respect.
BTC is theoretically decentralized. In practice it goes through wallets and exchanges which get robbed all the time. It can't be used for any transaction because it's expensive so it's no replacement to currency. Even buying gold physically is cheaper than buying BTC (transaction costs). It's even less private than gold. I can walk into a shop, pay cash for gold and there will be no record of the transaction. With BTC the government just tracked crooks who moved BTC through the dark web and through private currencies. It leaves a huge, traceable digital trail.
Finally, BTC isn't regulated. That means a lot of the transactions are internal wallet to wallet transfers meant to "pump" the market. That's legal for BTC. So the idea that it's value is "objective" is BS.
The only people who would go into BTC in these conditions are crooks and useful idiots.
BTC was a smart idea that just doesn't work in reality. Right now it's running on the fumes of people who "believe" in it since it keeps bouncing back up. Faith based monetary systems run the world, but unlike BTC we have government to support them when we lose faith.
Bitcoin is down 18% on a real dollar 1-year basis, during the most inflationary period since the 80s, and has underperformed the NASDAQ for much of the last 4 years.
- End of 2017, BTC hit 19K. Today, it's 42K. That's 2.2X!
- End of 2017, QQQ hit $150, today it's $345. That's 2.3X.
- End of 2017, TQQQ hit $11. Today its $53. That's 4.8X.
Also, I'll bet more money has been made, but rather it's been concentrated among some of the earlier cohorts of owners.
The cost to mine is somewhat "fixed" - and tbh, a miner would not choose to lose money to mine, but just stop mining if their source of electricity is too high for profit.
The trade losses are speculative losses, and it comes from the "wins" that someone else on the other side of the trade.
If I bought BTC at $50,000 and still own some, I've "lost" money but not actually since I haven't sold it. This is the reality for 100% of owned Bitcoins. There is $800B worth of USD in Bitcoin that has no "loss" side to it because at any given moment they are owned by people who have clearly not sold their share.
When the market cap goes down there is of course loss, but in Bitcoin's 13 year history it has gone from a $0 market cap to an $800B market cap, which means it is massively a net gain for people who have held Bitcoin.
Of course this changes if Bitcoin is revealed as the massive Ponzi scheme that so many HNers say it is / want it to be, but until that actually happens and BTC goes to 0, then as long as the market cap is above the cost of mining hardware it is a net gain for people who have held / continue to hold Bitcoin, not "negative sum". Negative sum would be:
(market cap - mining hardware) < 0
Market cap is most recent trade price * supply. It's not a reflection of how much money or value can be withdrawn from the market, that's more a function of market depth.
For instance if I create my own token with a supply of 1,000,000,000 and I sell 1 token to my buddy for $1, I'm, now a "billionaire." That's market cap. Where did that come from, is what you're asking. The answer is, whoever controls the most recent transaction.
However, the total market for my shitcoin is my buddy, and the total amount I can get back out is $1. That's a function of market depth.
In your example it's $1 between two parties, in Bitcoin's case it was $17B over the last 24hrs between a huge number of parties, which indicates that a significant amount of value can be pulled out of BTC.
How much has been spent on mining hardware?
It's no wonder they are all in the red.
Once everyone that would buy into crypto does at least once, then loses their shirt, there won't be anyone new to sucker back in anymore.
Maybe we're at that point now?
I wish, but I suspect the end is not yet upon us. It's become a religion.
Remember, Herbalife has similar economics, and that did not go well for Ackman.
You should've taken that bet! ;)
(Looks like it was somewhere between $0.58 and $0.68 at the time of that comment, and $0.29 at the time of the conclusion of the hypothetical bet)
I see no legitimate utility in it. It has enabled scourges on society like ransomware, wasted massive amounts of energy.
web3 is based on the false premise that people want to make 100 decisions per day to pay half a cent to read someone’s blog.
Big money NFTs are generally just a simple tax scam. Person X makes 10 NFTs, sells one to Person Y for $10,000. Donate the 9 remaining for a $90,000 write-off. Person Y does the same thing making 10 NFTs, selling one to Person X for $10,000. No money changes hands and only one losing out are other taxpayers. Other people see NFTs selling for big bucks and start buying them too thinking they’re investing rather than misunderstanding the scam.
The most ridiculous claim I see repeated now is that blockchains like BSV will replace cloud services like AWS.
I’ve spent many years making a modest amount of money with it; I just see all of it as just nonsense.
They range from major multibillion dollar charities to dudes who spent a few hours completing paperwork.
https://en.m.wikipedia.org/wiki/Slavery_reparations_scam
There are 1.6 million 501c3 organizations in the U.S. They range from huge to some dude who filled out some paperwork.
You’re right that the IRS has tightened up requirements but I disagree that the IRS isn’t dense. They’re horribly understaffed and enforcement has gone by the wayside.
https://ktla.com/news/nationworld/taxpayers-face-overloaded-...
Especially since I ran the numbers in a different thread, and BSC is 625,000X more expensive than AWS lambda and offers the same level of centralization and trustlessnesness - and worse uptime guarantees.
Is there a source for that?
Just announced he will back Bitcoin mining in Russia: https://bitcoinmagazine.com/business/putin-backs-bitcoin-min...
[edit] Well if Vladdy-P - 16 year veteran of the KGB - is doing it then I guess I must have been wrong this whole time. Thank you for setting me straight. WAGMI.
Criminals usually lead technology adoption, as they don't have any moral or legal constaints, real or imagined.
I didn't say that at all. I maintain he doesn't support the espoused goals of advocates.
> Criminals usually lead technology adoption, as they don't have any moral or legal constaints, real or imagined.
That doesn't mean it's for the better, though, haha. Just pointing at the times that it did would be a form of survivorship bias. Criminals were quick to adopt fentanyl, human trafficking, and shooting your business rivals after all.
Let's face it, Putin's goal is to harm the west. So you could say his adoption of this technology is likely to undermine the west. Whether that's directly through the adoption of the technology or the perception it creates.
What does Putin (and many others) gain, if he no longer has to do that for international trade?