Anyone invested in bitcoins?
Discussion
I just added a small number to the foolish portfolio, on the basis that if they became as popular as the US dollar, I estimate just one coin would be worth millions. With the current price of one being less than £3.50, that seems a good gamble.
The info on them as a financial proposition online is scant, to say the least. Anyone here taken a punt on a few?
The info on them as a financial proposition online is scant, to say the least. Anyone here taken a punt on a few?
Edited by Somewhatfoolish on Tuesday 6th March 16:28
I had never heard of them until your post. Very interesting concept but as this unashamed copy and paste from wikipedia shows, there seem to be a number of problems in getting them accepted.
A frequent problem faced by retailers willing to accept Bitcoin is the high volatility of its exchange rate to the US dollar, as well as the absence of futures to hedge this volatility (although option contracts are available). In a review of the virtual currency, James Surowiecki opined that hoarding by speculators represented one of the largest hindrances to accelerating its adoption.
Have you bought the bitcoins themselves and are you storing them in a paper wallet for the future? Seems like a kind of fun investment with some potential upside. Even if they only reached their previous trading highs against the US dollar you would be quids in!
A frequent problem faced by retailers willing to accept Bitcoin is the high volatility of its exchange rate to the US dollar, as well as the absence of futures to hedge this volatility (although option contracts are available). In a review of the virtual currency, James Surowiecki opined that hoarding by speculators represented one of the largest hindrances to accelerating its adoption.
Have you bought the bitcoins themselves and are you storing them in a paper wallet for the future? Seems like a kind of fun investment with some potential upside. Even if they only reached their previous trading highs against the US dollar you would be quids in!
yeah I've bought the bitcoins on mtgox and am in the middle of transfering them to a wallet on this computer which I will backup in a few places
the excahange volatility is one of at least a few reasons will need a bit of luck for them to take off. But in theory they're a heckuva lot better than paypal
the excahange volatility is one of at least a few reasons will need a bit of luck for them to take off. But in theory they're a heckuva lot better than paypal
Here's a cool article: http://www.wired.com/magazine/2011/11/mf_bitcoin/a...
I've been selling at various points on the way up and have also lost lots of them in various hacks/seizures etc. So I've not literally made millions upon millions. But I've done nicely.
When I came up with my estimate above it was based on bitcoins replacing one of the money supplies (forget which) for dollars. It was mostly tongue in cheek and predicated on a far longer-term horizon. But the market isn't trading anything like a currency. No doubt there will be a successful cryptocurrency but the technical flaws in bitcoin make it relatively unlikely it'll be the one. Instead, the most charitable explanation for the current price is that it's being treated as a store of value, like gold.
I think that a cryptocurrency can be a perfectly natural store of value. I think that it's also likely that only one or two cryptocurrencies will attain this crown, and I also think that bitcoin despite its flaws - purely due to name recognition etc - is the current most plausible contender for this.
But do I want to stake large sums of money on it? No.
It may be that bitcoins do become the gold and are that store of value and that's why I still have a token couple of bitcoins. Depending on how you look at it, they're either insurance against me being completely wrong or lottery tickets.
The current market resembles railway mania. It seems that most buyers are buying out of greed. I'm not saying that this is the top. I have no idea. But I don't see anything behind these prices other than animal spirits. A 24-year-old student friend of mine was asking me the other day how she could buy bitcoins. I told her bluntly that the fact she was asking me was one of the reasons I was selling. She bought anyway.
I'm pretty sure that when I was buying these bitcoins they'd already been not that far off $100 very briefly before a collapse. Markets are sometimes a bit fractal, that would mean they may well go down to £50 again. If they do and nothing has changed then I'll likely be buying.
A final point - bitcoin is susceptible to unique risks from grey swans due to the mysterious ownership of so much of it. There may not be time to react to, for example, Satoshi appearing and dumping his coins, whoever nicked MtGox coins deciding they want some of their £650 million fortune (or want to troll with it - imagine what happens if they decide they can't cash it in so start sending it to random addresses for the lulz) - etc.
When I came up with my estimate above it was based on bitcoins replacing one of the money supplies (forget which) for dollars. It was mostly tongue in cheek and predicated on a far longer-term horizon. But the market isn't trading anything like a currency. No doubt there will be a successful cryptocurrency but the technical flaws in bitcoin make it relatively unlikely it'll be the one. Instead, the most charitable explanation for the current price is that it's being treated as a store of value, like gold.
I think that a cryptocurrency can be a perfectly natural store of value. I think that it's also likely that only one or two cryptocurrencies will attain this crown, and I also think that bitcoin despite its flaws - purely due to name recognition etc - is the current most plausible contender for this.
But do I want to stake large sums of money on it? No.
It may be that bitcoins do become the gold and are that store of value and that's why I still have a token couple of bitcoins. Depending on how you look at it, they're either insurance against me being completely wrong or lottery tickets.
The current market resembles railway mania. It seems that most buyers are buying out of greed. I'm not saying that this is the top. I have no idea. But I don't see anything behind these prices other than animal spirits. A 24-year-old student friend of mine was asking me the other day how she could buy bitcoins. I told her bluntly that the fact she was asking me was one of the reasons I was selling. She bought anyway.
I'm pretty sure that when I was buying these bitcoins they'd already been not that far off $100 very briefly before a collapse. Markets are sometimes a bit fractal, that would mean they may well go down to £50 again. If they do and nothing has changed then I'll likely be buying.
A final point - bitcoin is susceptible to unique risks from grey swans due to the mysterious ownership of so much of it. There may not be time to react to, for example, Satoshi appearing and dumping his coins, whoever nicked MtGox coins deciding they want some of their £650 million fortune (or want to troll with it - imagine what happens if they decide they can't cash it in so start sending it to random addresses for the lulz) - etc.
Somewhatfoolish said:
The current market resembles railway mania. It seems that most buyers are buying out of greed. I'm not saying that this is the top. I have no idea. But I don't see anything behind these prices other than animal spirits. A 24-year-old student friend of mine was asking me the other day how she could buy bitcoins. I told her bluntly that the fact she was asking me was one of the reasons I was selling. She bought anyway.
Indeed. A bit like Joe Kennedy's story of the shoe-shine boy giving stock tips before the 1929 crash.I could be considered an early adopter. I was one of the studenty folks using them to buy weed in the early 10s, part of the reason they took so long to gain any repute. Only saw it as investment potential during the first price spikes in '15/'16. I put some asside then. Haven't attempted to withdraw any, likely won't until I see reason too, at the point and value that I bought in at (about £200/coin) my potential for real loss is minimal.
Always nice to see my previously 2 digit investment turn into 4 digits.
Always nice to see my previously 2 digit investment turn into 4 digits.
I think its going to end top heavy because there is nothing to underwrite the "value". If they hit $100k a coin how many will be selling and how many will be buying? Its got to be getting to that point now. When it was $100 a coin normal people were buying (and selling) but now at $15k a coin it can only be serious risk takers surely. (I know you can buy less than a coin but still).
And yes I wish I had listened to my work friend who had about 70 coins which he mined himself when he told me to start doing it. I also bet he wished he had held them when he sold for about $50 each.
And yes I wish I had listened to my work friend who had about 70 coins which he mined himself when he told me to start doing it. I also bet he wished he had held them when he sold for about $50 each.
thebraketester said:
Is it fair to say recent investors have missed the boat? Or is it still worth buying in?
Who knows, I thought that when they were at £700 each. I recently read a news article written at the start of the year where an investor said he thought that one day a bitcoin would be worth the same as a house. Laughable back then but not beyond the realms of possibility anymore.John McAfee predicted that Bitcoin would be worth $5000 at the end of 2017, he is now saying he predicts it will be worth $1,000,000 by the end of 2020.
Who knows, the whole thing could crash tomorrow, but I have invested an amount of money I am prepared to lose just on the off chance.
Got to be a better bet than buying lottery tickets.
red_slr said:
And yes I wish I had listened to my work friend who had about 70 coins which he mined himself when he told me to start doing it. I also bet he wished he had held them when he sold for about $50 each.
I bet he feels sick, he would be sitting on £770k now....Gassing Station | Finance | Top of Page | What's New | My Stuff