Quote (hoipolloi @ Mar 24 2022 07:35am)
I had almost 3k in it but I'm thinking
If it went up 30% which would be crazy
I am only making 900$
After fees and everything closer to 800
So I'm tying up and risking 3k to make 800
Seems terrible
Whereas 100k in it would make 30k. Which is substantial
With lower amounts your payout isn't enough to justify the risk
This is my view on crypto in general.
Essentially crypto is all forms is what's known as a commodity, its simply an object, albeit digital. Due to the fact that the object doesn't produce income it is hard to justify it as an investment. An investment is in as simple terms as i can put it, is an outlay of cash for an asset or collection of assets that produces a product or aids in the completion of a service to produce income. The value of the income over time vs the initial layout is what makes an investment profitable or unprofitable.
Now as for crypto people will justify it as an investment because they intend to capture the volatility. There is also another group that claims it will become, in itself ,a form of money. This also cannot justify it as an investment because in order for it to be seen as money the volatility would have to substantially stabilize and then crypto would simply become a hedge against the dollar. As for those trying to capture volatility, i mean that's in itself an admission to just gambling.
Now to those who will say that stocks are the same, they are not. Stocks represent an ownership interest in a company that produces income which is irrelevant to the stock price.
edit: after re reading i saw you say that a 30% return on 3k isnt substantial. thats imply untrue, 30% is a huge return in terms of a compounded basis. 3k in 10 yrs at 30% a year is around 40k dollars, after 20 years it would become 570,000 ish.
This post was edited by FrenchVanilla on Mar 29 2022 02:35am