What makes you think Crypto currencies can only increase over the long term?
Isn’t it fair to say they have no intrinsic value and nothing supporting them except confidence from the market?
I don’t profess to have any answers (clearly!)
Quite a few have an opinion that cryptocurrencies are really tulips. the values are zero, which is fine by me.
We came from salt, stone, etc, then coin, metal (bronze, silver, gold) and then paper as monies, so digital currencies are going to happen. You can say digital currencies have to nothing to backup, same can be said to US dollars.
My advice is that do not go there, wait and see, unless you are a seasoned financial professional or you are Musk!
Yes, you can easily get stung and certainly shouldn’t trade with money you can’t afford to lose. On the other hand, that sort of volatility is exactly what people use to make a fast buck…or indeed, lose it.
I don’t think the fact that cryptocurrencies are digital is the issue - most transactions in fiat currencies are digital now. I guess it’s the fact that cryptos are decentralised and outside of the control of governments that sets them apart, and perhaps makes it harder to see real underlying value in them.
I’m certainly no expert here, but if interest from big business that we’re starting to see takes hold there must surely be some future for them.
I’m a little surprised the Chinese government haven’t been more heavy handed in trying to ban them though.
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China only ban the crypto activities, but crypto ownership is allowed.
Yes, given their continued attempts at totalitarianism during their transition to becoming capitalists I wonder if they will try to ban it completely as some other states have done.
A big thing about cryptocurrency transactions is that they cannot be traced back to the beneficiary, so what my old mum used to call “a right rogue” can hide their doings from the authorities.
But the digital frictionless nature of crypto transactions are probably attractive to any government trying to kick-start capitalism.
So I would expect sophisticated totalitarian governments to allow cryptocurrencies that they can control and ban the ones they can’t.
Best
David
I’ve heard this mentioned before that the finite number of possible bitcoins that can be mined are what gives it a scarcity which in turn provides value similar to the way the scarcity of gold gives that a value. However whilst it is true that there is a limit on the total number of possible bitcoins there is no limit on the number of crypto currencies that can be created in the digital world to compete with bitcoin. Just look at Dogecoin which was created as a bit of a joke and is now in the top ten of most valuable crypto currencies.
I don’t think there is any inherent value in bitcoin but I agree that the same can be said for USD or GBP or other fiat currencies especially given all of the QE money printing that is happening. The smart money realised this after the 2008 crisis hence why the value of real assets such as classic cars shot up after that time.
The price of bitcoin is too volatile to be used in the mainstream for real purchases however you can currently go and buy almost any real assets/food/clothes etc with USD or GBP.
Yes, bitcoin volatility is the king at the moment, it just swings from/to ~+/- ~25% during the last few days.
let me give you guys a small tip, if you are still interested long term or even short term , take a look at ETH / USD and its equivalent ETF derivative ETHE.
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