The Cryptocurrency Thread (Bitcoin, Ethereum, Ripple etc.)

What makes you say that? Long term I mean? I added some bitcoin backed stock to my SIPP in 2017. Bought and sold it a few times, making some small profits but the delisting of the stock about 2020 has made me hold onto it. Made much more that way than dipping in and out. Plan is to keep it until I get much closer to retirement. It's either paid of or it's not. I could cash in now but it's feeling more solid a long term bet now, not less.

It's a gamble but so was Royal Bank of Scotland shares that tanked and made millions of cautious people much poorer.

 

If you hold 5% in a portfolio for 20 years it's not a big deal. But it should in no way replace traditional assets or a diversified portfolio.

Ultimately the price is driven by retail 'investors' where 99% of those trading couldn't explain what they are buying, what moves the price, and how prices can be forecasted. It's gamblers gambling which is fine, cos I love gambling! But not something to base long term savings around.

On the RBS point, it's why you shouldn't put all your funds into a single stock either. But when you buy shares, you are buying part of a company usually with dividends and with published accounts, etc. When you are buying a bit coin you are buying something that only exists as code, isn't backed by any institution, and where value is driven purely by enough people thinking it's worth something.

 

Bitcoins have a cost to create (mine). So its more than just code. Intrinsic value disappeared from most stocks early 2000's. A lot of it is just a ponzy scheme with different degrees of risk attached.

At present with the creation of ETFs I don't believe that it is no longer backed by institutions. Those managing the ETFs basically back them with their reputation. Retail numbers are decreasing too.

JP Morgan effectively owns nothing but some infrastructure and mostly trades on its reputation as a middle man. Is it's stock worthless/high risk?

I'm more making points than saying I'm right as basically I see the current stock market as a house of cards anyway. It's literally valued at many multiples of the underlying value.

Thanks for your answer. It does make complete sense I'm sure in your context.

 

How do you guys get your bitcoin? Do you have Wallets with actual bitcoin?

Sorry for my ignorance, but whenever I try to look this up it’s hard to know what’s right and what’s a scam.

 

No problem.

Your first point is actually a big issue. The energy required to mine a bit coin is significant to produce nothing tangible whatsoever. It's a lot of energy (literally) to run an algorithm that has no intrinsic value.

JPM as an example manages trillions of dollars and takes a fee for that management. So if you are buying JPM stock today, you are buying that almost guaranteed cash flow not just now but for years to come. Now JPM may lose assets and therefore lose revenue and the share price goes down. But the chances of JPM losing all it's revenue is practically zero. It's stock also pays a dividend and had done for decades, therefore it's pretty safe to assume it will pay dividends for years to come.

And it's diversified. JPM doesn't just manage money. Its owns commercial, corporate and retail banks. So you are buying a part of all these sub divisions as well.

Which isn't to say there isn't risk. But you are buying a share that has multiple revenue streams, is diversified globally, and has a history of paying dividends. Bitcoin is valued by pure sentiment and nothing else.

 

I don't actually have any bitcoin. Just stock associated with it. It moves pretty much in sync with the price but that's not true of all crypto stock.

The stock I bought isn't available anymore as it was deemed too high risk by the financial regulator and withdrawn. I've held onto it but if I ever sell can't buy it back.

If you have a SIPP now I'd consider looking at one of the Bitcoin ETFs if they track the price rather than a wallet.

I did try and buy actual Bitcoin back in 2012 but couldn't figure it out. Wish I'd tried harder.