Bitcoin - total horse poo or a valid but volatile store of value?

[yd]

I don't see a specific Bitcoin thread. I listened to a fascinating podcast at "Politicology" titled 'Bitcoin is changing the fight for freedom'.

Its an hour and a half but some interesting points were made if you don't want to look it up.

Basically, the bulk of the world's population doesn't have the luxury of living in a country where their currency is freely accepted or exchangeable. That generally speaking those countries experience large valuation depreciations as a matter of course. That people in those countries end up with much higher transaction costs for almost everything because of needing to use, to simplify, USD and the most major currencies, in order to trade between themselves. That Bitcoin, unlike other 'coins' are genuinely what the presenter describes as 'outside money' aka not subject to change or vote like say Ethereum nor subject to government intervention - which is why countries I won't name ban them.

As an example, he mentioned Malawi, a lovely country I have been to. They on a random day experienced a planned 44% devaluation in their currency and got a holiday in order for everybody to change all the prices of hard goods. Of course, if you could devalue your way to riches, then South America would be the richest region in the world so you know full well that any devaluation doesn't work out well for the local population. Hence, the presenter pointed out how Bitcoin gets people out of those kind of regimes. He also pointed out how aid organizations could use it to pay for things that otherwise would get tied up in government red tape or simply confiscated.

It was a very interesting discussion. He also talked about the environmental impacts which he minimized but that got more into the weeds than I can really describe succinctly but may have to give another listen. He also pointed out El Salvador as a use case although maybe not as a resounding success but as probably a better result than having had more rounds of depreciations.

It got me thinking, well, its interesting. I really don't understand it so I am trying to get my head around could it actually get adopted with any kind of 'ease' by non sophisticated countries. By that I mean, we are all on forums with internet access and can freely discuss money management and can discuss and explain how it 'works' (which to be honest I want to know). Anyone here quite likely has access to relatively decent banking options. How reasonable is it to think that a non digitally savvy populace could start really using Bitcoin and bypass their local currencies which as mentioned can tend to depreciate or have governments that don't want wealth leaving the country so make it difficult to use alternatives or have the ability to tie up people's cash indiscriminately.

My thinking was, I want to buy 1 Bitcoin. I am in rural Africa. I happen to have 68,000 usd somehow. How do you even 'buy' Bitcoin? How does that person get a 'wallet' that I gather they need and not know that the 68k doesn't just disappear forever after they buy Bitcoin from 'somewhere'. Can it easily be done in small size on cheap mobile phones securely to bypass using the local currency such that you and I could use it to exchange goods and services rather than deal in some less than ideal local currency?

Given I don't understand it, I want to know if I am being wise ignoring it when it could actually be something that might be very valuable. A lot of it seems like magical thinking for a way to make money disappear and never be sure if it re-appears - I am giving 'real' money to get 'something' that I store with some words on a usb device/token/wallet and then somehow can send this Bitcoin to you to pay for something. Having never used it nor seen anywhere that really takes it, it seems crazy to me to some degree but that is because I have access to the 'good' currencies.

So total scam? The podcast in question sure did make a good 'use case' for it for a large swath of the global population and if that is indeed true, well, we can all laugh but when its at a million bucks a coin and inflation has ate away at our 'good' currencies....well, maybe a bit of Bitcoin (or gold!) starts to make some sense?

 

[abj]

It doesn't work for a currency at all due to the global 7 transactions per second limit.

 

[yd]

As mentioned, I really don't know how it works. It sounds like you can pay to have a transaction be quicker or pay less to be slower so for day to day stuff it might not be great to buy a coca cola but for getting regular deposits or making regular payments weekly/monthly it has more value. Also, for sending money from Chad to Kenya its cheaper than converting Chad money into USD and then back into Kenyan money.

Dumb question, why is there only 7 transactions a second?

 

[poochyena]

Hence, the presenter pointed out how Bitcoin gets people out of those kind of regimes.

Well, did it? I've understood its had this potential, and frankly it was the only way I saw crypto having any real value, but with the decade that has passed, it seems evident to me that even that potential for crypto isn't actually feasible as it hasn't actually happened yet. The numerous seizures of crypto by governments over the past few years shows even more how its not some mystical currency outside of government control.
There is just simply no advantage to using bitcoin over USD other than it being slightly harder to trace than sending money through paypal. Unless you literally write in the memo "this is to pay for illegal drugs", then you can even use USD to pay for illegal things without the government knowing why you sent someone some money.

Bitcoin's price is based primarily on speculation that there is an even bigger sucker willing to invest even more than the previous sucker. I see bitcoin's price as an indicator of the economy. The higher the price, the higher the disposable income people must have. Bitcoin will be the first investment people pull their money out of once the economy starts to truly falter.

 

[The Aloof Alot]

Bitcoin mining is also based on having infinite Earths, as far as I can tell, where energy never runs out and you can use as much electricity as you want to make more of a commodity that is quite like a pyramid game.

 

[ramases]

tl;dr: Podcaster peddles in equine metabolical byproducts.

--

If you are in Africa, and somehow (a wizard did it?) have access to 68k USD in hard cash, you already have an access to a stable store of value: Your wads of cash. Which the locals will happily take and exchange into local currency, also giving you a medium of exchange.

Problem solved. If you also have access to technology and secure telecommunications to buy/sell BTC, you also have access to remittance/microlending operators with faster turnaround and lower tx fees. This also allows you access to your wad-o-cash if for whatever reason it isn't an actual wad-o-cash in your posession but somehow stored ... elsewhere.

Now if you do not already have 68k in hard currency you have other problems, and BTC will not help you, because in order to have BTC you must give someone who is willing to sell BTC something they value; which, considering our premise is "local currency would be worth more if it was printed on toilet paper", has serious problems that frankly dwarf the relatively mundane technical problems involved in setting up a BTC wallet on a cheap Android phone.

Keeping the wallet secure is another matter, one that frankly should make most people take a look at the problem and immediately turn around smartly and say "this shit is useless for realworld persons". Head over to https://www.web3isgoinggreat.com/ and see how many people who should knew better, and are very familiar with the security aspects of BTC (and other cryptocurrencies), got their wallet compromised, and now tell me how some dirt-poor farmer ought to handle this.
Yes, there can be security concerns about wealth in Africa, but at least they're known locally, but having a useful BTC wallet gives you global risk exposure. Hence Pavol from St. Petersburg and his mates would now also be allowed to participate in the "making sure local poor people stay poor" game hitherto reserved for local gangsters.

Also see https://meincmagazine.com/civis/threa...llapse-has-begun.1476851/page-2#post-39967343 the lower part of the post, about a hypothetical purchase of a laptop in Venezuela with BTC.

Also see https://meincmagazine.com/civis/threa...egative-towards-bitcoin.1489572/post-41588415 about the practical experiences of actually trying and using in underbanked economies. tl;dr: During the COVID epidemic I gave thousands of EUR to communities and families I knew from my travels. Ended up using mostly Western Union because it was both reliable (!) and cheaper (!!) than BTC.

 

[Deleted member 43669]

There is just simply no advantage to using bitcoin over USD other than it being slightly harder to trace than sending money through paypal. Unless you literally write in the memo "this is to pay for illegal drugs", then you can even use USD to pay for illegal things without the government knowing why you sent someone some money.

Huh, I think that really depends on the quantity.

After all, I think cryptolocking scams are still making money with Bitcoin payments. Not sure what's the current status on that. If Bitcoin is easy to track, I really wish someone starts hunting down those tiresome guys sending "I recorded you watching porn, send me Bitcoin here", because... that's likely illegal?

...

I think you can buy fractions of bitcoins? But otherwise, I think Bitcoin is not being used in places with unstable currencies, and it's been out for a while. So likely... it just doesn't work for this use case?

 

[waveterrain]

There have been threads in the past but they have mostly died away because the topic has been flogged and at this point not much new has developed in the past 10 years. Well except a bunch of fraud and criminal cases. Those had entertainment value.

Disclosure: I did two years at one of the more prominent fintech companies working in this space (not one that had anyone go to jail but we did get fucked by SBF). I had some time, was between things, and so I took the job because I was curious. Highly skeptical but curious. I had a great time, tbh, but probably because I wasn’t a believer and neither my identity or wealth was wrapped up in the magic thinking evidenced by many during that peak period. I stopped thinking about this space 2 years ago but I doubt much has changed.

Countries have a right to control their currency, capital flows, and taxation. This seems to be contentious with many in the crypto space and often a bridge too far for them (until they have a problem and then they are first in line demanding someone solve their problems for them). So if you don't believe in the idea of government or regulatory functions, then I can see how Bitcoin is appealing. So if the current situation in a given country is broken, the solution set must first address social and governance issues.

Bitcoin is not nearly stable enough to function as store of value or currency. If a stable currency is desired, then a central bank can peg to another currency or basket of currencies. It is basically what China did (first to the dollar and now to a basket). It has drawbacks but it is fairly predicable unlike Bitcoin. I suppose a country could choose a stablecoin that already is a basket of currencies instead but that seems unnecessary unless it was a replacement for central bank transfers but they would need willing partners in that shift.

Bitcoin has had numerous instances of price manipulation and there is evidence that it isn’t nearly as secure to 50+1 attacks as purported to be. But it is hard to say and difficult to audit as a network which as something unpinning a financial market shouldn’t give anyone a ton of confidence.

So the question is why Bitcoin when a currency peg would achieve the same thing and better?

As a transaction network, Bitcoin has worse transaction costs and settlement times than SEPA. So far, none of the alts rival a mature network like SEPA. SEPA/TIPS instant is less than €0.002 wholesale. At retail, it varies but SEPA/TIPS may be completely free for instant transactions soon. SEPA also has a performance profile at least 10,000x greater than Bitcoin and is scalable. There are more SEPA transactions completed in one hour than the capacity of the entire Bitcoin network for a year. And 99+% complete in under 5 seconds where the average Bitcoin (even at the greatly reduced volume) is still over an hour and has zero SLA. SEPA also has many features Bitcoin lacks as a transaction network. ACH in the US lags behind but the improvement model is something more like SEPA. And yet ACH is still cheaper and more performant.

There are already existing digital transaction system through out many of these countries. In fact, in many cases, users in those countries were some of the first adopters of peer to peer mobile payments while the developed countries lagged behind.

Systems like Wise solved personal international transfers with very good on and off ramps and low costs. But they intersect and comply with KYC and banking regulations. And where they don’t serve, it is because cost of KYC and on-ramps.

KYC/AML. Any discussion that doesn’t account for that is non-serious at best. Same goes with self management of wallets, fraud, transaction reversibility, etc. This topic is also antithetical to many in the space for the same anti-government reasons but also because many know that that much of the liquidity in the space was driven by criminal actions.

 

[wallinbl]

As an example, he mentioned Malawi, a lovely country I have been to. They on a random day experienced a planned 44% devaluation in their currency and got a holiday in order for everybody to change all the prices of hard goods. Of course, if you could devalue your way to riches, then South America would be the richest region in the world so you know full well that any devaluation doesn't work out well for the local population. Hence, the presenter pointed out how Bitcoin gets people out of those kind of regimes. He also pointed out how aid organizations could use it to pay for things that otherwise would get tied up in government red tape or simply confiscated.

This is an argument for a global currency, not Bitcoin itself. There are plenty of well known problems with having a single global currency, aside from the political implausibility of the idea. Have a look at the EU, and the struggles they have had with a common currency and a common central bank, independent of the individual economies and fiscal policy regimes of the member countries.

People within a country holding a different currency to mitigate against hyperinflation can be accomplished with USD, Euro, etc without the complexity and overhead of BTC (harder to transact, less accepted, so slow you'd think it was a ledger kept in pen & paper). But, their wages are paid in the local currency. At best, they could immediately exchange the currency for the external currency each time they got a paycheck. But, exchange rates are supply and demand, so a country full of people doing that will exacerbate the hyperinflation, and it's likely the government will stop it in one way or another. Bitcoin isn't going to save people from these "regimes" because a mass exodus of the domestic currency would further the economic disaster, and would almost certainly get shut down by the government.

Currency instability occurs for various reasons, but generally some form of shock, and for smaller countries/economies, those are very often external. Something happens that's much bigger than them that overwhelms their economy. South America was sent into this spiral by the Great Depression and the US nearly completely stopped buying their exports. It was exacerbated in many countries by implementing Import Substitution Industrialization and various disastrous policies intended to create domestic industry where they relied on imports.

 

[yd]

y'all are not making a convincing argument for me to buy any Bitcoin!

 

[wallinbl]

y'all are not making a convincing argument for me to buy any Bitcoin!

We were mostly just addressing the presented use case. If you want to talk about it as an "investment", the responses will get even more negative.

USD is backed by the US government. It's value will be intentionally maintained by a central bank ensuring the viability of a large economy. It is a fiat currency, meaning its value derives solely from the government's backing and not from being a proxy for a commodity like gold. Gold is a scarce physical resource that also has practical value in electronics and jewelry, in addition to the fact that many governments stockpile it as a value store. When currencies used to be backed by gold, they were called commodity currencies (gold is a commodity, and it backed the currency value). While the gold standard makes people feel a currency has more value, it also diminishes a central bank's ability to control inflation/deflation, as the value of the currency swings with the underlying price of gold, which neither fiscal nor monetary policy can control.

You will sometimes hear crypto folks try to diminish the stability or value of the dollar by using fiat currency as a pejorative. That has happened a handful of times since the transition away from the "gold standard", though it happened in otherwise unstable countries. Monetary and fiscal policy well understood now compared with most of those cases, and the ones that were political (revolutions, overthrows, etc) are likely unavoidable.

Bitcoin is not a fiat currency (no government backing) and is technically a commodity. However, unlike gold, BTC has no commodity use outside of being a virtual currency. In that regard, it's value depends entirely on aggregate demand. If something else becomes the new hotness, and everyone moves to it, BTC will drop to near zero, as demand disappears.

Want to speculate or gamble? Have at it. Want a long term investment? No fucking way.

 

[yd]

@wallinbl So you are saying I should buy gold

 

[Bezoar]

Excess liquidity and irrational investor psychology/sociopathy are the roots of our bubble blowing machine.

The first two years of the pandemic saw an ~30% growth in the global money supply, lockdowns, and social media.

Free money, idle hands/bored apes, and it's easy to connect the dots leading to YOLO/meme assets activity and any vultures preying on them.

The current resurgence could be attributed to the despair associated with the realization of how truly bad the present situation is.

 

[Saikaici]

I'm always baffled why bitcoin is mentioned as being very viable in 3rd world countries. I guess cell phones are enough to make it work, but connectivity seems suspect and there's less of a likelihood you'd be able to have a backup. Maintaining security just seems... ugh. It seems like the optimal strategy would be to have your local bank store USD/Euros on your behalf. Or at worst take out USD and hide it under your mattress.

Even at this point in time most people that invest in bitcoin have never had a bitcoin themselves. Exchanges are abstractions with all the same problems any other place has. And it really boils down to the fact that any trust based system is going to do a transaction for fractions of a fraction of a percent, take a % cut and markup by thousands of a percent, but they provide convenience and other services that bitcoin simply does not.

While technically an inflationary currency, due to wallets being lost over time, is it really?

 

[MilleniX]

It seems like the optimal strategy would be to have your local bank store USD/Euros on your behalf.

Except that this may be outright illegal, or subject to a high risk of confiscation or forced conversion.

 

[karolus]

y'all are not making a convincing argument for me to buy any Bitcoin!

If you're looking at a new-ish type of highly speculative security to invest in, have at it.

To use as a currency—no. As other posters convincingly state, its transaction rate is far too slow, and too volatile. People are complaining about recent inflation in the US and other stable economies. Imagine how they would be reacting if prices were subject to that type of variability.

 

[waveterrain]

If you're looking at a new-ish type of highly speculative security to invest in, have at it.

In the US, BTC is a commodity, as is ETH, but are not securities. Though now there are BTC ETFs which are most definitely securities.

The commodity / security thing has been the center of much of the regulatory fight. Many lay the blame at Gensler's feet as it was the CFTC under his oversight that made the initial commodity ruling in 2015 and then when he moved to the SEC, he said now most projects are now securities. That may be unfair as the landscape had changed and most of the new projects are wildly different in governance and how tokens are created and quite clearly should be registered as securities. The proof of work aspect helped BTC in the initial ruling because tokens (aka shares) couldn't be issued out of thin air unlike many projects where there was a governance mechanism existed that could create or allocated shares (aka tokens) or manipulate the price via governance actions. Though that is barely the surface of the tests that need to be applied.

 

[Jables]

@wallinbl So you are saying I should buy gold

I was at a coin/stamp shop on Saturday and a guy walked in with $20K in cash in an envelope to buy Krugerrands. So, I know a guy.

 

[yd]

I really like the IDEA of physical gold. I certainly wouldn't keep it where I currently reside as I only have residency, not a passport, and frankly don't trust that when the shit is hitting the fan this place would be safe for assets or person. That said, I could comfortably buy and safely store it in Canada. I wouldn't be bothered by storage costs as a factor for reasons I would say but then I would have to hunt you down and silence you.

But then I start thinking about it - large bid/offer for transaction assuming I went to sell it. Taxation questions having it in Canada. Buy X (lets say 1% position). Well, that doesn't achieve anything. So need to allocate lets say 10% to a position or more to have it be some kind of insurance/store of value/whatever. But now I bring down my interest/dividend income stream by 10% annually. Over a decade, that costs me a full year of my normal income to have a nice shiny bar of gold 'somewhere'. Ouch.

And I would never buy 'paper' gold from an institution as that just makes no sense to me - lets take on HSBC credit risk when the shit is hitting the fan and they are going broke but my paper gold holdings there are worth a fortune, what could go wrong!

So it looks like its another usual day - a good day to buy bonds!

 

[Skoop]

Over a decade, that costs me a full year of my normal income to have a nice shiny bar of gold 'somewhere'.

Yeah, but you can fondle it and all your guns like all the other bros do.

 

[yd]

Yeah, but you can fondle it and all your guns like all the other bros do.

As soon as you shoot a gun, thats 'negative carry' given the price of ammo. I think I would rather fondle the gold.

 

[Bezoar]

Humans have found value in gold for 40,000 years, as a monetary metal for only a few thousand.

Since the effective end of the Bretton Woods System in August 1971 the total annual return rate in the US:

03.95% - cash
07.90% - gold
07.14% - investment grade corporate bonds
10.86% - S&P500

This covers a 52.75-year period, previous work I've done on relative performance under differing geopolitical/socioeconomic risk scenarios provides guidance for optimized strategies as changes occur.

Over the past ~6 years of trading, Bitcoin's median return is ~23%/year.

Are bond bits as tasty as bacon bits?

Edit: the bond number looked a bit off, mixed and matched columns... sorry.

 

[MilleniX]

10.20% - investment grade corporate bonds
10.86% - S&P500

I'm surprised to see so little gap between those two categories. How's their beta compare? Is the similarity in returns from 1971 to present a coincidence of the particular period in question, or have they largely tracked close together up to earlier end-points?

If you're feeling plot-y, think you could plot the time-series of the various annual returns of those asset classes depending on end date?

 

[Bezoar]

I'm surprised to see so little gap between those two categories. How's their beta compare? Is the similarity in returns from 1971 to present a coincidence of the particular period in question, or have they largely tracked close together up to earlier end-points?

If you're feeling plot-y, think you could plot the time-series of the various annual returns of those asset classes depending on end date?

Double checked that, see edit. For the time period gold actually outperforms bonds.

I had real estate in there too with my previous work, I'll see if I can put together a coherent graph.

Edit: to add to the above, residential real estate comes in at 5.3% and commercial real estate is 4.06%.

 

[Doomlord_uk]

I have wanted to trade bitcoin, but do not see any way I can safely to it without either being scammed, robbed or compromised in some fatal way. That there is malware out there that specifically looks for and empties wallets is pretty offputting, because I really don't know how to protect myself. Almost every information source on BTC seems scammy. It seems a pretty high-risk type of investment just from a security point of view. I still want to though*.

*I also don't have anywhere near the cash to buy 'a' bitcoin...

 

[ramases]

Except that this may be outright illegal, or subject to a high risk of confiscation or forced conversion.

So would be BTC, in most of those circumstances.

At least greenbacks are anonymous once you've spent them; BTC are, once they're used at a fiat boundary, at best pseudonymous.

If you're looking at a new-ish type of highly speculative security to invest in, have at it.

If you want to do some forex speculation and ... uh, I dunno, the Argentinian Pesos? is not enough exposure to risk for you, then BTC might actually be your thing.

 

[Skoop]

I have wanted to trade bitcoin

Why?

 

[karolus]

If you want to do some forex speculation and ... uh, I dunno, the Argentinian Pesos? is not enough exposure to risk for you, then BTC might actually be your thing.

Hmm. Per Google:
First Argentine Peso (ARS) to USD

Now, Bitcoin to USD

Unless you know something significant, appears BTC would be the better option. To give a reasonable timeframe, both are set to 5 years.

 

[wallinbl]

You don't have to buy the actual commodity, currency, or security directly to speculate. You can simply buy and sell futures contracts. If you're going speculative, you can maximize your risk and your reward that way.

 

[Bezoar]

If you're feeling plot-y, think you could plot the time-series of the various annual returns of those asset classes depending on end date?

Coherent is so overrated, it'll take some mental gymnastics, but the information is there. Loses something with the scaling too.

Spoiler: graph

Here's a FRED page with vaguely related content: interactive graph

 

[GloatingSwine]

Hmm. Per Google:
First Argentine Peso (ARS) to USD



Now, Bitcoin to USD


Unless you know something significant, appears BTC would be the better option. To give a reasonable timeframe, both are set to 5 years.

(Images snipped)

If you're buying something speculatively, you don't buy when it's high. Unless someone has figured out a way to short BTC, or you're banking on short term volatility but there are probably things to do that with that are less inconvenient to turn into real money.

Buying the Argentine Peso is a bet that things can't get more fucked so it'll probably go back up, buying BTC is shouting "Jesus take the wheel!" and hoping volatility makes you some money.

 

[karolus]

True—but bitcoin futures have been available on select markets for some time now. As for the the ARS—looks like turtles all the way down.

Those charts were posted mainly to show historical performance. One volatile, the other an apparently long downward trend.

 

[wallinbl]

True—but bitcoin futures have been available on select markets for some time now. As for the the ARS—looks like turtles all the way down.

Those charts were posted mainly to show historical performance. One volatile, the other an apparently long downward trend.

A modification of the famous Graham quote applies here.

In the short term, a stock/currency market is a voting machine. In the long term, it's a weighing machine.

BTC has yet to find anything to give it any weight. It currently has votes.

 

[Shavano]

As mentioned, I really don't know how it works. It sounds like you can pay to have a transaction be quicker or pay less to be slower so for day to day stuff it might not be great to buy a coca cola but for getting regular deposits or making regular payments weekly/monthly it has more value. Also, for sending money from Chad to Kenya its cheaper than converting Chad money into USD and then back into Kenyan money.

It has too much friction and too great a barrier to entry to be routinely used by people, even in the first world, and much less so in the third world. As a store of value, it has no basis. It's completely supported by speculation.

edit: what people in countries with unstable/rapidly declining currencies do IRL is they trade in dollars, euros, or other more stable foreign currencies.

 

[Nugget]

BTC has yet to find anything to give it any weight. It currently has votes.

Well said. Plus, some percentage of the votes for Bitcoin are lies, smoke, and mirrors in the form of un-backed stablecoin "dollars" which don't actually exist.

 

[AgentQ]

It has too much friction and too great a barrier to entry to be routinely used by people

I was pleasantly surprised that CoinBase added support for Lightning network.

So I tried it out on a transaction. It was nice to have have my total show up in the Coinbase UI.

Then it was all downhill from there. My transaction appeared to go through, but apparently didn't I waited a very long time before refreshing enough times for it to hide a little "transaction failed" notification in the corner. Eventually I retried and got it to work.

Then I remembered all of the tax accounting overhead I just brought upon myself and regretted it.

I think the friction is a feature, not a bug. They don't want people spending this stuff. The only thing they want you to do is buy more of it and hold it forever, because that props up the price. Not surprising that the public message has become "HODL" as a cutesy way of dressing up this self-serving idea.

 

[Shavano]

Money you can't spend isn't money. Coinbase isn't a bank.

 

[armwt]

You don't have to buy the actual commodity, currency, or security directly to speculate. You can simply buy and sell futures contracts. If you're going speculative, you can maximize your risk and your reward that way.

Just spotted this thread, but was coming in to say something similar. The best way (in my opinion) to actually make $$ in bitcoin (or crypto in general) is to trade it. Just so happens that's what my employer does - we're a crypto exchange. Doesn't really matter whether BTC is going up, or going down, we make a slight profit off every trade going through the system. Business has been fairly good in that regard.

As for actually (personally) buying/storing BTC? Not really my thing... Still way too speculative for my wife to feel comfortable with me doing that, so I've only got a couple hundred $$ worth total that I've played with over the past couple of years, and so far am still in the red.

 

[karolus]

Just spotted this thread, but was coming in to say something similar. The best way (in my opinion) to actually make $$ in bitcoin (or crypto in general) is to trade it. Just so happens that's what my employer does - we're a crypto exchange. Doesn't really matter whether BTC is going up, or going down, we make a slight profit off every trade going through the system. Business has been fairly good in that regard.

As for actually (personally) buying/storing BTC? Not really my thing... Still way too speculative for my wife to feel comfortable with me doing that, so I've only got a couple hundred $$ worth total that I've played with over the past couple of years, and so far am still in the red.

Futures can be very risky—even for stable companies and currencies. Sure, it's possible to multiply gains—as well as losses. Have a friend in the investing business, and one aphorism from way back he related is that "calls are for customers." In that, most expire worthless. Yes, it's possible to make money—but people who venture into the field should do so with open eyes and solid understanding.

Per making money in the business as an exchange—sure, that's one way. My mistake was buying Coinbase too soon after its IPO, but know there are other firms in the field as well.

 

[w00key]

My mistake was buying Coinbase too soon after its IPO, but know there are other firms in the field as well.

Eeeh by the time they IPO the insiders are already fat and ready to cash out. You're waaaaaaay too late.

IPO used to be a way to raise money in exchange for an early opportunity to profit, but with private funding rounds at billion+ valuation, it's more like a opportunity for everyone to cash out and let the noobs take the hit.