SIGforum.com Main Page The Lounge Is investing in cryptocurrency and buying cryptocurrency the same thing?
Main Page The Lounge Is investing in cryptocurrency and buying cryptocurrency the same thing?Page 1 2
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W07VH5 |
If not, is there an advantage to investing rather than buying coins? Or when you invest are you actually purchasing BitCoins that you can spend? Or is that two separate concepts? | ||
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| Big Stack |
Currently they are the same thing. But I bet there are ETFs out there that are based on cryptocurrency investing, and have professionals doing the buying and selling, and across multiple cryptocurrencies. Edit: Yup... https://investorplace.com/2019...bitcoins-resurgence/ | |||
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eh-TEE-oh-clez |
Three separate concepts. You can buy bitcoin (or other crypto) and hold it as an asset that can be spent. The value of the bitcoin changes continuously, so at the time you spend the bitcoin, it might be worth more or less than when you bought it. You take the crypto out of the exchange, and tuck it away in a wallet to be spent later like cash. You can buy crypto and trade it against USD or other crypto like one does on a currency exchange. You make (or lose) money as the relative strength of the currencies change. Crypto stays on the exchange/brokerage, and you book profit when you order the brokerage to convert to dollars and write you a check. Lastly, you can invest in crypto. You can buy shares of publicly traded companies that are developing crypto tech, are mining crypto, or using crypto in their underlying business somehow. For example, Marathon Patent Group (NASDAQ: MARA) mines bitcoin for profit. Their stock value goes up and down with the price of Bitcoin. There are, I'm certain, tax implications of each strategy. For example, capital gains from investing in a publicly traded crypto mining company can be treated as long term capital gain if the shares are held for more than a year. I don't know if the same can be said of buying crypto itself. I got out of holding crypto when the IRS started asking on the tax forms if you held crypto at all during the year. | |||
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| Shit don't mean shit |
I'm of the opinion there's no such thing as "investing" in Bitcoin. You are "speculating" in Bitcoin. | |||
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| eh-TEE-oh-clez |
Bitcoin is basically a commodity at this point. Speculating in bitcoin or other crypto would be the same as speculating in pork belly or corn or some other commodity. It's been lucrative though. The demand for bitcoin currently outweighs the supply of bitcoin in the open market. The supply of bitcoin, at the moment, can't be influenced by governments. Currently trading above $28,000 per BTC. | |||
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| Left-Handed, NOT Left-Winged! |
It is a pyramid scheme created from nothing. It is not a commodity because it does not exist in reality. It is a currency that is not backed up by anything except perceived value, which is the purest form of speculation ever devised. I won't touch it for one second because I cannot understand it. I would guess that behind the scenes large criminal organizations and corrupt governments are using it for illegal purposes. | |||
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When the will is strong, everything is easy |
Investing in BitCoin to me; would be buying GPU's and hardware to setting up a full time mining operation. "You can avoid reality, but you cannot avoid the consequences of avoiding reality." Ayn Rand | |||
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Optimistic Cynic |
There is a difference between purchasing bitcoin, and purchasing options contracts for bitcoin to be delivered at some future date. The latter is a straight investment play, the former is akin to purchasing gold coins and hoping for appreciation that exceeds inflation. The difference between buying options on BTC and frozen concentrated OJ or pork bellies is that there is a lot more incentive for a random third party to steal BTC than hundreds of pounds of product (except that when it comes to bacon, maybe not so much), at least you don't have to go out into the cold. Congratulations to those that got into BTC early, and had the discipline (and luck) to hold on to their coins, but it is way too much risk for my taste. | |||
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| Member |
so kinda like the US Dollar.  pretty much joking though. i basically agree with your points. ----------------------------------------- Proverbs 27:17 - As iron sharpens iron, so one man sharpens another. | |||
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| Left-Handed, NOT Left-Winged! |
"Full Faith and Credit of the USA" still counts for something, even with debt surpassing GDP... | |||
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| eh-TEE-oh-clez |
The perceived value of each BTC has grown much faster than the perceived value of each USD. The government is basically just printing money and handing it out as of late. At least with bitcoin there's no central gov't to fuck with its value. So, as a fiat currency, BTC appears to be superior to the USD. | |||
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| Member |
yes i understand the allure on several levels. plus -- imo -- technology doesn't generally go backwards once the genie is out of the bottle. the concept of 'owning cash value' outside of world governments is very attractive for some unfortunately the price is so volatile it kinda defeats the purpose as a 'store of value' as an investment -- again -- yikes. what GAAP is used to settle the books? how do you value it like you do stocks? hard to answer those questions. ---------------------------------- Proverbs 27:17 - As iron sharpens iron, so one man sharpens another. | |||
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| W07VH5 |
Ah, thanks. That's what I was wondering. I was going to throw a couple dollars at it and just watch it. | |||
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| eh-TEE-oh-clez |
I don't have a crystal ball...but BTC is at an all-time high. I would perhaps keep an eye on its price and maybe wait until it cools off a bit? | |||
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Political Cynic |
I always thought that these cryptocurrencies were simply a vehicle for organized crime and terrorists to launder money I'd like to see a real bitcoin before I'd plunk any money on it | |||
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| Woke up today.. Great day! |
That's the beauty, there is no physical bitcoin. You own a key to your bitcoin. Can't remember the guy but not too long ago some investor or crypto banker dies with sole knowledge of some ridiculous amount of crypto-currency like 400 million dollars worth. It just disappeared into thin air because nobody else had the keys. Lots of people were really pissed. I have friends that have made money both mining and trading. I won't touch it personally. If I were 20 years younger I would have a PC farm in my basement mining for keys. Maybe strike it rich in exchange for a massive electric bill  | |||
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| Member |
so what exchange is used to buy / trade ? is BlockFi a valid source? --------------------------------- Proverbs 27:17 - As iron sharpens iron, so one man sharpens another. | |||
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His Royal Hiney |
Actually, you're correct. Every fiat money is worth nothing but the spit of the government issuing it. Cryptocurrency is the same. It's just that the issuing of the cryptocurrency is controlled by an algorithm that supposedly makes it harder to mine as time goes on instead of people making decisions of when to print more money. "It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist not in talk and meditation, but in right action and in right conduct. Life ultimately means taking the responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual." Viktor Frankl, Man's Search for Meaning, 1946. | |||
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| Experienced Slacker |
The whole original post was valid IMO, but the part I snipped interests me most. So, um, how would they know if you said: "Nope."? This is perhaps the most attractive reason for me to get a handful of crypto sometime. I am really digging the idea of untraceable funds based solely on the middle finger aspect. If it really is out of bounds that is. I love liberty wherever I find it, and I don't think that makes me a criminal. Also, and I could be overly optimistic here, but I think that if enough people use some crypto from time to time it will make it more difficult for governments to alter or outlaw it if they want to. | |||
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Member |
IRS obtained 14,000 names and 8.9 million transactions on a "John Doe" summons filed against crypto currency exchange Coinbase. Last summer, they began sending letters out to people; three kinds; 6174, 6174-A - informational in nature, no reply required; 6173 requests responses and references criminal penalties 3 times. Remember that you sign the return under penalty of perjury and checking the box Yes or No is covered under that. And, if you get a letter suggesting that you should perhaps reexamine your return, you can presume that they have data on you. Recommend hiring a good tax attorney with experience dealing with the Gold Badges. Place your clothes and weapons where you can find them in the dark. “If in winning a race, you lose the respect of your fellow competitors, then you have won nothing” - Paul Elvstrom "The Great Dane" 1928 - 2016 | |||
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