The Investment Thread

[KCBrewerfan34]

Who knew there was any Crypto chatter on this site. Big into Crypto!!!

[GAME05]

Coinbase fees are a little higher than Binance, mostly.

[GAME05]

Weird binance took a test deposit I made a few days ago (which still doesn't show up in my bank account), but now bigger deposits of $1000 are all failing. Despite the higher fees I'm tempted to go back to Coinbase. It's WAY more user-friendly, anyway.

[thebruce44]

Are you using Coinbase Pro? The fees are very minimal and the interface is much better than Binance.

[thebruce44]

Who knew there was any Crypto chatter on this site. Big into Crypto!!!

 

Yup, look back on this thread and you will see quite a few posts.

 

What are you holding? I've got a bit of BTC, but mostly ETH and IOTA.

[nate82]

COINBASE went public today. Currently trading around $330 a share. I am going to wait and see if it goes down to around $200. I think it is over valued where it is at now.

[owbc]

I generally dislike crypto because the blockchain is such a terrible, energy wasting concept, but my $50 investment in dogecoin was briefly worth $160 so it's hard to complain about that. I understand that the value of everything in this world is somewhat arbitrary, but NFTs are such a late-stage capitalism creation that I can't even wrap my head around how pointless they are. But if there's money to be made, well...invest away I guess.

[homer]

COINBASE went public today. Currently trading around $330 a share. I am going to wait and see if it goes down to around $200. I think it is over valued where it is at now.

 

Yeah I took a look this morning and they were talking $250 open. I passed.

[homer]

I generally dislike crypto because the blockchain is such a terrible, energy wasting concept, but my $50 investment in dogecoin was briefly worth $160 so it's hard to complain about that. I understand that the value of everything in this world is somewhat arbitrary, but NFTs are such a late-stage capitalism creation that I can't even wrap my head around how pointless they are. But if there's money to be made, well...invest away I guess.

 

FWIW, Ethereum 2.0 is supposed to cut energy consumption of its Blockchain by 99%

[GAME05]

Coinbase has outrageous fees. A new broker or the SEC allowing crypto ETFs would really cut into Coinbase's market share. Only competitive advantage they seem to have right now is they're WAY easier to use, but that's not a particularly big barrier for someone else to cross. I won't be buying their IPO.

[igor67]

I loathe crypto because it tried to argue it was the next great thing in tech without any actual use, and has now backtracked at best to accepting that its a pure electronic creation to be traded for the sake of trading. The pattern of moving goalposts around its existence is unsettling at best and when you uncover the older hacks to manipulate the blockchain part itself? So far hiding assets is the only understandable problem I've seen it solve, and if that's your problem well I'm not terribly sympathetic.

[homer]

I don't see the value in any of the coins themselves except Bitcoin

It can be used as a store of value similar to gold since there a limited number they can create.

 

Blockchain on the other hand has real world utility. Smart contracts are game changers.

[nate82]

I loathe crypto because it tried to argue it was the next great thing in tech without any actual use, and has now backtracked at best to accepting that its a pure electronic creation to be traded for the sake of trading. The pattern of moving goalposts around its existence is unsettling at best and when you uncover the older hacks to manipulate the blockchain part itself? So far hiding assets is the only understandable problem I've seen it solve, and if that's your problem well I'm not terribly sympathetic.

 

You keep on repeating these lies? Why?

[JackNicholson1974]

I am not sure those are lies. I tend to agree with him. Bitcoin will never be used for anything but a pretend currency and form of trading. Folks only buy it because it goes up. Nobody is buying it to spend it on groceries. They may someday sell their bitcoin , for USD and buy something. But nobody is ever going to spend it.

[igor67]

I would actually be really interested if homer wanted to expand on what a smart contract was.

A link outlining a hack related to crypto

Chu, Dennis. “BROKER-DEALERS FOR VIRTUAL CURRENCY: REGULATING CRYPTOCURRENCY WALLETS AND EXCHANGES.” Columbia Law Review, vol. 118, no. 8, 2018, pp. 2323–2360. JSTOR, www.jstor.org/stable/26542511 p.(16)

 

and another

"One of the main flaws with cryptocurrencies can be attributed to the “blockchains” that they are built on. Whenever a new coin is “mined” or sold, it is subject to a review by the community of miners. In other words, whenever a transaction occurs, the other people involved with mining the currency are notified and decide whether the transaction was legitimate or not. This sort of community verification requires 51% of the community to approve a transaction for it to occur" quoted from "51% Attack Explained." Mycryptopedia. January 08, 2019. Accessed March 20, 2019. https://www.mycryptopedia.com/51-percent-attack-explained/.

 

and a 3rd one for good measure "Bitcoin Gold Hacked for $18 Million." Bitcoin News. May 24, 2018. Accessed March 20, 2019. https://news.bitcoin.com/bitcoin-gold-hacked-for-18-million/

 

For some additional background I have both a low tolerance for risk, and a high threshold (generally) of evidence. On the investing side this usually means sticking to traditional investing principles (low fees and index funds go back to at least the mid 90's). I recognize that this particular combination has certain downsides, but given I don't have stacks of capital to be an angel investor I can live with that. My sentiments against cryptocurrencies though were rooted in the clear pattern of mid 2010's articles hyping in a very standard 'it will revolutionize', but not following through with a clear explanation of what was going to be solved. For some reference this was overlapping with the era when we were being told that Silicon Valley was also going to revolutionize education with MOOCs. We've all seen how well people actually like online education. At least those articles though were clear what was being proposed and sold. As a science generalist I read a wide diversity of secondary and primary sources across many disciplines (math, physics, chem, biology, and economics mostly), and I do not recall any of my range of sources ever jumping in and walking through how the blockchain was an important technology. That isn't 'proof' but it is enough for me to not want to waste time fully researching the topic myself. Particularly after one of my students (who was a huge crypto believer) did his thesis project a couple of years ago (those are his references above). From his abstract

"Then the history of cryptocurrencies’ rise from 2008-2018 is analyzed. This analysis explains why the cryptocurrency market came into being, rose, and fell in such short succession. It describes how the market was exploited through fraudulent practices such as “pump and dump schemes”, hacks, and faulty brokers. These problems with the market are then compared to problems that the U.S. stock market experienced in the 1970’s."

 

If the blockchain itself is going to be a significant technology going forward that would be interesting and as far as I can tell at the moment it would end up being a rather unique path for a legitimate technology to rise to utility.

 

Last thought the economics side of crypto are somewhat analogous to gold, which I also loathe as an investment. It is way too useful as a material to use purely as a trade device.

[CheezWizHed]

I was helping my son do his taxes last night (his first time) and I noticed that TurboTax had a special question specifically asking if he invested in BitCoin (which he hadn't). Beyond normal investment rules, does anyone know if there is something unique about Bitcoin and taxes?

[nodakfan17]

I was helping my son do his taxes last night (his first time) and I noticed that TurboTax had a special question specifically asking if he invested in BitCoin (which he hadn't). Beyond normal investment rules, does anyone know if there is something unique about Bitcoin and taxes?

I don’t think so. Even if the government thinks Bitcoin is ‘imaginary internet money,’ they still want their cut if you turn a profit on it.

[CheezWizHed]

Oh, I knew they'd get their cut as an investment. I was just wondering if they taxed it differently or more heavily than the standard short-term (<1 year) and long-term tax rates.

 

Along those lines, do these currencies have any interest or dividends? Or is it just the value of the holding only?

[GAME05]

They don't have dividends, but a few pay interest at varying rates. I'm holding Algorand through Coinbase right now and it pays 6%, so it's been automatically re-investing $0.41 for me every day. But considering how much crypto goes up and down, I certainly wouldn't use interest as any factor to invest or not. Plus I'd wait for prices to tank again before holding long-term. I hear a lot of folks expecting a tank sometime around Q3, so once they do and everybody says crypto is worthless I'll buy back and hold more long-term. Bitcoin has a set amount that will ever be mined to fight inflation and others don't have that limit. So it's my understanding that some like Algorand will do a controlled release of more to current owners as their way of adjusting things.

[DHonks]

I was helping my son do his taxes last night (his first time) and I noticed that TurboTax had a special question specifically asking if he invested in BitCoin (which he hadn't). Beyond normal investment rules, does anyone know if there is something unique about Bitcoin and taxes?

 

My understanding is that the Treasury is launching an effort to go after people collecting capital gains from cryptocurrencies. They believe they've missed out on a massive amount of money due to people not reporting capital gains. Additionally governments have some reason to be skeptical of cryptocurrencies, as they've become the preferred currencies for North Korea, drug cartels, and terrorist organizations. Governments don't like that things aren't as traceable or controllable, but that's kind of the point of crypto.

[thebruce44]

I generally dislike crypto because the blockchain is such a terrible, energy wasting concept, but my $50 investment in dogecoin was briefly worth $160 so it's hard to complain about that. I understand that the value of everything in this world is somewhat arbitrary, but NFTs are such a late-stage capitalism creation that I can't even wrap my head around how pointless they are. But if there's money to be made, well...invest away I guess.

 

For BTC and current ETH, this is true. It wont be true much longer though for ETH or for a number of other projects.

[thebruce44]

Coinbase has outrageous fees. A new broker or the SEC allowing crypto ETFs would really cut into Coinbase's market share. Only competitive advantage they seem to have right now is they're WAY easier to use, but that's not a particularly big barrier for someone else to cross. I won't be buying their IPO.

 

Use Coinbase Pro. Fees are dramatically cheaper.

[nodakfan17]

I recently saw an article on Yahoo! called ‘How to Finance Your Wedding.’ It was sponsored by a bank.

 

[sarcasm]Tip #1: Don’t finance your wedding![/sarcasm]

 

I realize for a small number of savvy couples, this is a leverage play. If they can use the loan to invite more guests who then gift more money, it could turn out to be profitable (I’m not suggesting that’s the goal of a wedding). However, for the vast majority of couples, starting your married life in the hole to throw a party is a bad idea.

[GAME05]

I know of a couple who rented out a room in House on the Rock for their wedding. Was something like $30k. And I don't think they were particularly wealthy. Adding to it you've probably still got student loans at that point, gotta buy furniture and all that. And then save up for a baby in a year or three.

 

I like what a cousin of mine did. Have a super-super-small wedding that basically only parents are invited to, do your honeymoon, and then invite everyone you want for a big picnic gathering. Plus since it was after the honeymoon the couple isn't exhausted from the day and more able to spend time with everyone else.

 

----

 

Meanwhile in crypto-land, I wonder if this is the start of that bigger gain everyone had been predicting. A cousin of mine called me yesterday looking to start with some play-around money but I had a hard time telling him that now is the right time, but rather suggested waiting for the next dip.

 

I'm up 49% in crypto since 4/1, but weirdly I think this is going to turn out to be a bad lesson for me in expecting returns like that to be the norm. I made 1.4% in the real market for April and for a second I thought that was kinda bad, but it's actually not really that bad for a month.

[owbc]

The wedding industry is certainly benefitting from social media, that's all I have to say about that.

 

There's obviously a record of me bashing crypto in this topic but I certainly can't complain about the 1400% return on my small dogecoin purchase from January. Dogecoin is my favorite investment by far because I think it truly epitomizes everything that I've learned about investing in the past year. Don't bet against memes.