Posted on 02/20/2018 5:44:53 AM PST by C19fan
Cryptocurrencies are a nascent asset class and could fall violently at any time, the founder of blockchain network Ethereum warned on Saturday.
"Reminder: cryptocurrencies are still a new and hyper-volatile asset class, and could drop to near-zero at any time," Vitalik Buterin said on Twitter. "Don't put in more money than you can afford to lose."
(Excerpt) Read more at cnbc.com ...
Yep, just like fiat currency.
Until they are well understood and accepted by most, cryptocurrencies are a tempest in a teapot. When the gas is turned off, the agitated frenzy will cease and all that will be left is some water at the bottom of the pot.
“Don’t put in more money than you can afford to lose.”
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Hardly novel investing advice, but it is especially prudent when it comes to this.
A comedy show about nothing (Seinfeld) worked, but it’s not such a good plan for investments.
I seem to like the idea that no one country can mess with my BTC.
Sounds like this guy cashed out for American greenbacks and is now “warning” of a massive price drop. Just a guess.
It does have a basis in reality in that it can be exchanged for real goods. The valid objection to abstract currencies has always been that a government can inflate them at will and can be expected to always do so. That isn't true for these cryptocurrencies.
You can't eat paper dollars. You can't wear them or build a house out of them. What basis in reality do they have apart from their exchange value? And nowadays you hardly ever see the paper form of dollars anyway. Most dollars exist only as numbers in ledgers in banks, and are exchanged through electronic means.
But there is no FDIC insurance on Bitcoin wallets.
http://time.com/money/5053744/hackers-steal-bitcoin-nicehash/
There is no FDIC insurance on the cash in your wallet either.
There is no FDIC insurance on your loss of value due to arbitrary decisions by The Fed.
The intrinsic value of cryptocurrency is ZERO. The US dollar has at least “the full faith and credit” of the US government behind it. Cryptocurrency has nothing but the full faith and credit of a few ‘miners’ sitting mostly in their parents basements in their underwear faithfully ‘mining’ their currency. It may have their faith, but their credit is worth zero.
Today the gas the keeps cryptocurrency afloat is the tight monetary policy of Red China.
I have no problem if someone wants to gamble a few dollars on Bitcoin or Ethereum. It is the traditional speculation of any new product, or in this case, the technology underlying the cryptocurrencies.
The entire run up in January was due to massive Chinese influx. They own 75% of all cryptocurrencies due to the difficulty of getting the yuan out of the country, and due to their massive crypto-mining operations all over the country.
If China ever changes their tight yuan policy, then the cryptocurrencies drop back to $100 or less.
So the actual value is less than zero? Worrisome.
I’ve been maintaining that they were either scams to remove from people’s pockets real money or that they were case studies to see how to make money virtual, for the ultimate control.
No reason they could not be both.
“I seem to like the idea that no one country can mess with my BTC.”
****
Except the federal government doesn’t consider BTC to be currency. Unlike the dollar as fiat currency, BTC can be subject to capital gains taxation when you use it.
“So the actual value is less than zero?”
******
Nope. “Full faith and credit” is a euphemism for backed by government with power to arrest and imprison (enforced by guns).
BTC and other cryptocurrencies don’t have that backing.
It’s particularly important when capital gains are not reported and related taxes are unpaid on BTC transactions. Uncle Sam via the IRS can do lots of nasty things to the tax evader.
Wouldn’t you have to pay capital gains on any arbitrage profits you made swapping one country’s currency back and forth with other countries’ currencies?
How is that different?
No statute of limitations on murder, kidnapping and defrauding the IRS.
Unless you want to spend the rest of your life looking over you shoulder, don’t do those things.
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