all investment purchases involve a debt; debt is simply the source of funds. If you purchase an investment with available cash you are simply borrowing from your savings with hopes of repaying yourself with a gain - the cost is the loss of the future earning power of the cash and any losses from the purchase. If you purchase by converting one asset into another the cost is the difference between the future earning power of the two assets.
The only difference with self leverage is the very favorable terms of repayment and the benefit of debt forgiveness without affecting the economic stability of others.
Hmmmm.....a mantra heard of other "assets" in the past. Of course those never died, but they did do their best interpretation of Snow White and went to sleep for a decade or more
@59Horsehide said: @derryb : When I purchased my bitcoin, I saw it as exchanging one asset for another. No debt involved.
"all investment purchases involve a debt; debt is simply the source of funds."
cost is a debt, even if it is immediately paid.
paying it immediately prevents you from remaining in debt.
Above definition of debt is bogus. Debt requires an OBLIGATION to repay. Buying bitcoin with savings creates zero OBLIGATION, no matter whether there is intent to funnel proceeds back to savings at some future date. Also, an investment does not have to produce any monetary yield, and can even have expectation of falling in value. For example, I buy a car with savings. It is an investment because it gets me to work, but I have zero expectation of getting my money back or repaying my savings from its residual value.
@59Horsehide said: @derryb : When I purchased my bitcoin, I saw it as exchanging one asset for another. No debt involved.
"all investment purchases involve a debt; debt is simply the source of funds."
cost is a debt, even if it is immediately paid.
paying it immediately prevents you from remaining in debt.
Above definition of debt is bogus. Debt requires an OBLIGATION to repay. Buying bitcoin with savings creates zero OBLIGATION, no matter whether there is intent to funnel proceeds back to savings at some future date.
Per Marriam-Webster dictionary debt is:
Something owed. An obligation
A state of being under obligation to pay or repay someone or something in return for something received : a state of owing.
Simply put, a debt is an obligation to pay or to repay. It is something owed. When you purchase anything at the store you incur a debt that is normally settled with immediate cash/debit payment or future payment involving a credit card. Debt is not limited to a transaction involving long term payment. If you think it is then please tell us at what point it can be called a debt - After you leave the store? When you get the first credit card statement? An hour after the purchase? Debt begins the moment an agreement to purchase is made and remains in effect until final payment. That debt may last for 5 seconds or five years. It just depends when payment is settled.
Also, an investment does not have to produce any monetary yield, and can even have expectation of falling in value. For example, I buy a car with savings. It is an investment because it gets me to work, but I have zero expectation of getting my money back or repaying my savings from its residual value.
No, your car is an expense. If you keep it for 50 years and keep it in excellent condition, then it stands a chance of becoming an investment. The purpose of a purchase determines whether that purchase is an expense or an investment.
Millions and millions do so very successfully every year. Dont be a dummy.
Yeah, and when interest rates change direction, they all want gov.com bailouts. But only the chosen few get bailouts, and everyone else pays the price. What a great business model for the chosen.
Q: Are You Printing Money? Bernanke: Not Literally
You're not diversified if you own 10 cryptocurrencies instead of one. That's like owning 10 dot-com stocks instead of just one. You need to invest in other sectors to be diversified.
@crito_is_baaack said:
You're not diversified if you own 10 cryptocurrencies instead of one. That's like owning 10 dot-com stocks instead of just one. You need to invest in other sectors to be diversified.
If you owned 10 dot com stocks in the year 2000, 9 of them would have gone out of business and 1 would have made you a millionaire
I owned more than 10, and they all went away, some more spectacularly than others. My favorite example is Barnes and Noble dot com (BNBN). The parent BKS spun it off and after the dot-com bubble burst they just bought it all back. The dot-com itself and the stock were fine but the market for dot-coms was completely ruined.
China straight up outlawed Bitcoin and India is planning on tightly regulating it through government-approved exchanges. If the Fed wants to implement a digital dollar in America I fear they might get politicians to do the same things here. It's just too volatile and risky for me.
Any 'asset' purchased with debt can make you look like a dummy in fairly short order...
Just another form of gambling, the winners most likely have inside information.
And some just practice more than others, know and understand the rules of the game, have discipline, segment emotions, have comprehension of basic math skills, can analyze fundamentals and be willing and able to study their opposition.
@crito_is_baaack said:
I owned more than 10, and they all went away, some more spectacularly than others. My favorite example is Barnes and Noble dot com (BNBN). The parent BKS spun it off and after the dot-com bubble burst they just bought it all back. The dot-com itself and the stock were fine but the market for dot-coms was completely ruined.
China straight up outlawed Bitcoin and India is planning on tightly regulating it through government-approved exchanges. If the Fed wants to implement a digital dollar in America I fear they might get politicians to do the same things here. It's just too volatile and risky for me.
They've been trying for a decade to just get 'real time payments' and instant ACH in play and it's ridiculously slow.
If banking could do instant transfers 24/7, it would take away much of the use cases for various crypto IMO.
So what are the odds that the recent weakness in cryptos is tax related? Of course, there's the wash sale rule which doesn't apply to crypto (a loophole?). But what about longer term big winners due to the new IRS reporting rules for 2022? Here's an example of what I am guessing may be happening...
Significant numbers of crypto investors with huge gains, some of them virtual currency multimillionaires are selling all their holdings on platforms that will begin reporting to the IRS in 2022. Many of them will buy back early next year, establishing a new, "improved" basis to evade taxes on their earlier windfalls.
@RobM said:
So what are the odds that the recent weakness in cryptos is tax related? Of course, there's the wash sale rule which doesn't apply to crypto (a loophole?). But what about longer term big winners due to the new IRS reporting rules for 2022? Here's an example of what I am guessing may be happening...
Significant numbers of crypto investors with huge gains, some of them virtual currency multimillionaires are selling all their holdings on platforms that will begin reporting to the IRS in 2022. Many of them will buy back early next year, establishing a new, "improved" basis to evade taxes on their earlier windfalls.
Evade is the key word. Not worth it. Big money leaves big footprints.
@RobM said:
So what are the odds that the recent weakness in cryptos is tax related? Of course, there's the wash sale rule which doesn't apply to crypto (a loophole?). But what about longer term big winners due to the new IRS reporting rules for 2022? Here's an example of what I am guessing may be happening...
Significant numbers of crypto investors with huge gains, some of them virtual currency multimillionaires are selling all their holdings on platforms that will begin reporting to the IRS in 2022. Many of them will buy back early next year, establishing a new, "improved" basis to evade taxes on their earlier windfalls.
Nothing stops the IRS from looking at the source of funds that suddenly appear in an account. Additionally, there is no statute of limitations on fraud.
Cryptocurrencies will collapse if the Fed were actually to go through with the bond purchase taper. Which means that odds are that bitcoin reaches new ATHs next year.
@RobM said:
I would argue that, unfortunately, there are a lot more people who will initiate cryptocurrency holdings in the future than will precious metals.
Why?
Billions of women (and men) may have a different opinion.
Just food for thought.....
How many people own battery electric cars. They've been around for well over 100 years, but didn't start becoming popular until the past decade (around the same timeline as cryptocurrency). Just over 10M have been sold worldwide and their current sales make up what? 3 0r 4% of total light vehicle sales despite incredible levels of government incentives.
@RobM said:
Yes, fear and distrust. Exactly the same reasons around 16% of Americans have positions in gold and/or silver bullion.
I dont think there is a lot of overlap amongst these two groups of investors. I also dont see fear as a driving factor among PM investors. Perhaps your experiences are different.
Im not sure where you got your 16% stat, but do you have figures on the percent that own cryptos? My circles would indicate a greater ownership of crypto than PMs, which is why I wonder where the new blood comes from.
For me personally, I have positions in PMs primarily in attempt to protect wealth with minimal risk. I like looking at it too so I have some aesthetically attractive bullion as well. But I am not very much into numismatics (apologies to our generous host). Mainly, I distrust a government and central banking system that has debauched it's currency by 99% in a little over a century. I am not fearful that some day gold and silver will find a place in barter, I don't think it will come to that, I just want the option to be able to trade into dollars at higher prices when desired.
I know relatively few people that confess to owning cryptos. And generally they are going to skew quite younger, mostly millennials and gen z. There is plenty of overlap between crypto and PM holders visible in this forum, and understandably also lots of skepticism towards crypto. Disclosure... I am probably one of the more skeptical here wrt bitcoin, but I also own some.
I'm not sure. I have only done 3 transactions in all these years, using crypto. Bought scrap gold and paid using crypto. Sold silver and rec'd crypto. In 2020 I offered 2020 eagles for $20.20 in Bitcoin all year. Not one taker.
Interesting your comment about folk not confessing to crypto ownership. Why do you think that might be?
I would have done a fourth deal but my wife said "no, you are not trading 24 ounces of gold for one Bitcoin".
I told her I would have flipped it. Bitcoin was $52000 that week. And I had way less than $48k into gold. The next week or so, Bitcoin was $60k. Oh well. Can't win 'em all.
Interesting your comment about folk not confessing to crypto ownership. Why do you think that might be?
Variety of reasons. Some crypto owners have modest wealth to start with. These YOLOs aren't all making money in cryptos and may not want friends and family to know they are potentially risking everything that they have; easier for them to commiserate with other apes on reddit. Others have made nice sums. But why boast about it? If you didn't work really hard or even smart to make such gains, those same friends and family will want you to share the spoils. But I think the biggest reason, and this applies to PMs as well, is privacy. Crypto founders are definitely, at least originally, libertarian types. So are many PM investors. Ethical issues related to individuals tax filing aside, that's why just about any online bullion dealer devotes space to discussion of which types of transactions the dealer must report to the IRS.
@derryb said:
I confess, I have been making money with cryptos, specifically ETH.
And with impeccable timing... routinely announcing that you recently bought within pennies of a bottom and that you just sold everything within a few bucks of an all time high, before reloading at the next low 😂. Please give us a heads up right before you are making these moves so we can all benefit!
Comments
Leverage strikes again. Amazing how many people believe in borrowing money to buy 'appreciating' assets. Works great until it doesn't...
https://www.zerohedge.com/crypto/leveraged-bitcoin-traders-flushed-out-epic-overnight-crash
Yup. Lots of dummies out there. Dont be a dummy.
Gotta know your "assets".
Knowledge is the enemy of fear
Any 'asset' purchased with debt can make you look like a dummy in fairly short order...
all investment purchases involve a debt; debt is simply the source of funds. If you purchase an investment with available cash you are simply borrowing from your savings with hopes of repaying yourself with a gain - the cost is the loss of the future earning power of the cash and any losses from the purchase. If you purchase by converting one asset into another the cost is the difference between the future earning power of the two assets.
The only difference with self leverage is the very favorable terms of repayment and the benefit of debt forgiveness without affecting the economic stability of others.
Give Me Liberty or Give Me Debt
Bitcoin has died 434 times while on its way to record highs.
BTFD.
First crypto ETF.
disclaimer: I prefer Ethereum.
Give Me Liberty or Give Me Debt
Another buying op. Buying the crypto dip working, gutter dip is a constant dip. COMMON CENTS! Happy Holidays!!!
The whole worlds off its rocker, buy Gold™.
No, assets cannot make one look like a dummy. Poor decisions by dummies do that. Dont blame others/things.
Knowledge is the enemy of fear
Hmmmm.....a mantra heard of other "assets" in the past. Of course those never died, but they did do their best interpretation of Snow White and went to sleep for a decade or more
Knowledge is the enemy of fear
Like leveraging asset purchases?
Millions and millions do so very successfully every year. Dont be a dummy.
Knowledge is the enemy of fear
@derryb : When I purchased my bitcoin, I saw it as exchanging one asset for another. No debt involved.
"all investment purchases involve a debt; debt is simply the source of funds."
cost is a debt, even if it is immediately paid.
paying it immediately prevents you from remaining in debt.
Give Me Liberty or Give Me Debt
Above definition of debt is bogus. Debt requires an OBLIGATION to repay. Buying bitcoin with savings creates zero OBLIGATION, no matter whether there is intent to funnel proceeds back to savings at some future date. Also, an investment does not have to produce any monetary yield, and can even have expectation of falling in value. For example, I buy a car with savings. It is an investment because it gets me to work, but I have zero expectation of getting my money back or repaying my savings from its residual value.
Per Marriam-Webster dictionary debt is:
Simply put, a debt is an obligation to pay or to repay. It is something owed. When you purchase anything at the store you incur a debt that is normally settled with immediate cash/debit payment or future payment involving a credit card. Debt is not limited to a transaction involving long term payment. If you think it is then please tell us at what point it can be called a debt - After you leave the store? When you get the first credit card statement? An hour after the purchase? Debt begins the moment an agreement to purchase is made and remains in effect until final payment. That debt may last for 5 seconds or five years. It just depends when payment is settled.
No, your car is an expense. If you keep it for 50 years and keep it in excellent condition, then it stands a chance of becoming an investment. The purpose of a purchase determines whether that purchase is an expense or an investment.
Give Me Liberty or Give Me Debt
Millions and millions do so very successfully every year. Dont be a dummy.
Yeah, and when interest rates change direction, they all want gov.com bailouts. But only the chosen few get bailouts, and everyone else pays the price. What a great business model for the chosen.
I knew it would happen.
You're not diversified if you own 10 cryptocurrencies instead of one. That's like owning 10 dot-com stocks instead of just one. You need to invest in other sectors to be diversified.
If you owned 10 dot com stocks in the year 2000, 9 of them would have gone out of business and 1 would have made you a millionaire
.
Knowledge is the enemy of fear
I owned more than 10, and they all went away, some more spectacularly than others. My favorite example is Barnes and Noble dot com (BNBN). The parent BKS spun it off and after the dot-com bubble burst they just bought it all back. The dot-com itself and the stock were fine but the market for dot-coms was completely ruined.
China straight up outlawed Bitcoin and India is planning on tightly regulating it through government-approved exchanges. If the Fed wants to implement a digital dollar in America I fear they might get politicians to do the same things here. It's just too volatile and risky for me.
Just another form of gambling, the winners most likely have inside information.
or FED backed funding
Give Me Liberty or Give Me Debt
And some just practice more than others, know and understand the rules of the game, have discipline, segment emotions, have comprehension of basic math skills, can analyze fundamentals and be willing and able to study their opposition.
Knowledge is the enemy of fear
They've been trying for a decade to just get 'real time payments' and instant ACH in play and it's ridiculously slow.
If banking could do instant transfers 24/7, it would take away much of the use cases for various crypto IMO.
Hasn't China outlawed BTC multiple times now?
So what are the odds that the recent weakness in cryptos is tax related? Of course, there's the wash sale rule which doesn't apply to crypto (a loophole?). But what about longer term big winners due to the new IRS reporting rules for 2022? Here's an example of what I am guessing may be happening...
Significant numbers of crypto investors with huge gains, some of them virtual currency multimillionaires are selling all their holdings on platforms that will begin reporting to the IRS in 2022. Many of them will buy back early next year, establishing a new, "improved" basis to evade taxes on their earlier windfalls.
Evade is the key word. Not worth it. Big money leaves big footprints.
Give Me Liberty or Give Me Debt
Nothing stops the IRS from looking at the source of funds that suddenly appear in an account. Additionally, there is no statute of limitations on fraud.
Bitcoin target price? HIGHER!!!!
The whole worlds off its rocker, buy Gold™.
What’s backing bitcoin? Tether? I guess it’s just another fiat currency, like the FRD.
I think they're backed by tulip bulbs.
Worry is the interest you pay on a debt you may not owe.
other people's dollars.
Give Me Liberty or Give Me Debt
Isn't that how all pyramid schemes work?
Worry is the interest you pay on a debt you may not owe.
pyramids are only bad for the those left holding. The rest made money.
sorta like musical chairs.
Give Me Liberty or Give Me Debt
Billionaires trying to construct a narrative.
Knowledge is the enemy of fear
Cryptocurrencies will collapse if the Fed were actually to go through with the bond purchase taper. Which means that odds are that bitcoin reaches new ATHs next year.
Does anyone who wants to own bitcoin not already own some?
Knowledge is the enemy of fear
Does not anyone who wants to own gold or silver bullion not only own some?
I would argue that, unfortunately, there are a lot more people who will initiate cryptocurrency holdings in the future than will precious metals.
Why?
Billions of women (and men) may have a different opinion.
Knowledge is the enemy of fear
Just food for thought.....
How many people own battery electric cars. They've been around for well over 100 years, but didn't start becoming popular until the past decade (around the same timeline as cryptocurrency). Just over 10M have been sold worldwide and their current sales make up what? 3 0r 4% of total light vehicle sales despite incredible levels of government incentives.
Without the internet, crypto”currencies” aren’t worth the electrons that move them.
same goes with forum posts.
Give Me Liberty or Give Me Debt
So seems to be supported by heavily and easily manipulatable emotions----fear and distrust.
Knowledge is the enemy of fear
Yes, fear and distrust. Exactly the same reasons around 16% of Americans have positions in gold and/or silver bullion.
I dont think there is a lot of overlap amongst these two groups of investors. I also dont see fear as a driving factor among PM investors. Perhaps your experiences are different.
Im not sure where you got your 16% stat, but do you have figures on the percent that own cryptos? My circles would indicate a greater ownership of crypto than PMs, which is why I wonder where the new blood comes from.
Knowledge is the enemy of fear
https://www.prnewswire.com/news-releases/new-survey-reveals-10-8-of-the-american-population-owns-gold-while-11-6-owns-silver-301122041.html#:~:text=In-Language News-,New Survey Reveals 10.8% of The American Population Owns Gold,ownership of the precious metals.
https://www.google.com/amp/s/www.pewresearch.org/fact-tank/2021/11/11/16-of-americans-say-they-have-ever-invested-in-traded-or-used-cryptocurrency/?amp=1
For me personally, I have positions in PMs primarily in attempt to protect wealth with minimal risk. I like looking at it too so I have some aesthetically attractive bullion as well. But I am not very much into numismatics (apologies to our generous host). Mainly, I distrust a government and central banking system that has debauched it's currency by 99% in a little over a century. I am not fearful that some day gold and silver will find a place in barter, I don't think it will come to that, I just want the option to be able to trade into dollars at higher prices when desired.
I know relatively few people that confess to owning cryptos. And generally they are going to skew quite younger, mostly millennials and gen z. There is plenty of overlap between crypto and PM holders visible in this forum, and understandably also lots of skepticism towards crypto. Disclosure... I am probably one of the more skeptical here wrt bitcoin, but I also own some.
Thanks for the links.
Interesting your comment about folk not confessing to crypto ownership. Why do you think that might be?
Knowledge is the enemy of fear
I'm not sure. I have only done 3 transactions in all these years, using crypto. Bought scrap gold and paid using crypto. Sold silver and rec'd crypto. In 2020 I offered 2020 eagles for $20.20 in Bitcoin all year. Not one taker.
I would have done a fourth deal but my wife said "no, you are not trading 24 ounces of gold for one Bitcoin".
I told her I would have flipped it. Bitcoin was $52000 that week. And I had way less than $48k into gold. The next week or so, Bitcoin was $60k. Oh well. Can't win 'em all.
And the TARGET price is ........
Variety of reasons. Some crypto owners have modest wealth to start with. These YOLOs aren't all making money in cryptos and may not want friends and family to know they are potentially risking everything that they have; easier for them to commiserate with other apes on reddit. Others have made nice sums. But why boast about it? If you didn't work really hard or even smart to make such gains, those same friends and family will want you to share the spoils. But I think the biggest reason, and this applies to PMs as well, is privacy. Crypto founders are definitely, at least originally, libertarian types. So are many PM investors. Ethical issues related to individuals tax filing aside, that's why just about any online bullion dealer devotes space to discussion of which types of transactions the dealer must report to the IRS.
I confess, I have been making money with cryptos, specifically ETH.
Give Me Liberty or Give Me Debt
And with impeccable timing... routinely announcing that you recently bought within pennies of a bottom and that you just sold everything within a few bucks of an all time high, before reloading at the next low 😂. Please give us a heads up right before you are making these moves so we can all benefit!