Bitcoin - to invest or not?

[Gordon - Commercial Finance]

Using your logic then USD isn't really a currency, as I take payment ( or should I say 'trade' ) for my plugin in USD and a third party converts USD to GBP and I pay myself & account in GBP

USD isn't the currency of this country. However in America, USD fits the criteria for being a currency, as you can pay the IRS with it. Mexico is interesting because MXP is the main currency, but they also use USD, and businesses can pay staff and taxes in USD...so its a dual currency system.
Bitcoin cannot be used to pay anything, in any country. That's the main point.

 

[Alan]

I happy to accept the definition of a currency as something a government will accept as a tax.

In the same way that I can't pay taxes in gold or diamonds, but they all have a market value that probably outweigh their true industrial value.

Bitcoin concept is a decentralised 'currency' so by definition undermines ( disrupts ) governmental structures.

It doesn't mean governments don't see value in blockchain technology ( or as the government refers to them as decentralised ledgers - makes it easier to understand ), & indeed they want their cut on your capital gains or trading profits.

One poster mentioned 'ponzi scheme' but that is a poor description as 'ponzi schemes' are based on fraud, I'm not saying there are no fraudster out there manipulating the market, but that is different, as there is by definition a transparency in blockchain and the way bitcoin is built.

It is a very tricky thing to get ones head around. And the average person on the street doesn't care that much either.

 

[Gordon - Commercial Finance]

In the same way that I can't pay taxes in gold or diamonds, but they all have a market value that probably outweigh their true industrial value.

Absolutely right - and they are classed as commodities. If anything then Bitcoin should be classed as a "crypocommodity". still can be speculated on like any other commodity, but it would be a leap to say that a commodity could become the world's main currency as they do with Bitcoin. The fact that there is a finite amount in circulation also supports it being a commodity. Just like you can't print gold or diamonds they way you can to alter the supply of currency, Bitcoin is even "mined" like a precious metal commodity!

 

[Alan]

I am often asked if the Britcoin is a real currency and if one could lose money by holding Britcoins.

Only the other day I discovered my supply of Britcoins in my car dash-wallet ( used to be called an ashtray in the good old days when people used to smoke ) had been converted into worthless metal discs only fit for unlocking supermarket trolleys

 

[Alan]

Bitcoin should be classed as a "crypocommodity"

I agree, it is a better description.

 

[simon field]

A friend of mine invested £2k at the end of August, he now has £8998

 

[Noah]

That sounds like you are talking about serious investors with years of experience like the banks 12 or so years ago

I think you misunderstand the risk and reward structures that gave rise to the banking crisis. Were the investments a bad risk? Yes. Did the people recommending and benefitting from those investments prosper? Yes. Did many who benefitted suffer the consequences of those bad risks? No.

So I don't think those "bankers" were stupid. Greedy and unprincipled, but not necessarily stupid.

 

[aaron web designer]

I don't know all too much about bitcoin but there is a certain amount that can be mined. Also, apparently the Facebook twins have purchased quite a fair bit of bitcoin years ago, when they decide to sell their share then overall the price of bitcoin might drop drastically as they have quite a fair amount. Don't quote me on this, it's something I heard..

Microsoft accept bitcoin... https://support.microsoft.com/en-gb/help/13942/microsoft-account-add-money-with-bitcoin

 

[Alan]

I don't know all too much about bitcoi

Well that s a fact.

Winklevoss brothers hold $1.3billion of BTC out of a total market cap of $281billion, slightly less than half a percent and daily trading volumes of $22billion. So when they cash out ( if they cash out ) even in one go, less than 10% of the days volume added to sell side. I don't think that would cause more than a flicker.

But they are very clever guys, and so they would unlikely dump everything in one go.

 

[Sophia Liang]

I notice that some people select and purchase bitcoin ant miner recent months.

 

[webgeek]

Given the price volatility, you could probably 'invest' in horse racing our roulette and have about the same odds of making money.

In fact, a bit of sports arbitrage a la rebelbetting would probably give you a much higher KNOWN roi than you'll get with BTC.

I love BTC, think it's great, but I'm not willing to risk my kids college tuition on the whims of the masses - since public opinion drives the price up/down.

I might stick a few grand in SAFECOIN from the MaidSafe peeps. It's got storage tied to it, thus giving it utility value.... something BTC doesn't have. BTC is only worth something if someone wants to buy it so they can buy something else. SAFECOIN is worth something if someone wants to buy it so they can buy something else AND is worth something because you get file storage for the coins.

 

[Jeff Nev]

I would be incredibly with regards to investing at this stage, the bubble will inevitably burst but it is simply a case of when. The ship has most likely sailed on this, I am afraid.

 

[Violinni]

I keep hearing about this, only today a piece on the radio. However, it neglected to advise on investing and there was a hint that the bubble was about to burst. Anyone here got any (practical) advise re investing, and exactly how to, or is it best avoided?

I will never invest in Bitcoin for one simple reason. Coins can be easily stolen off your wallet.

No faith? Go and keep your coins in.

 

[Scalloway]

Bitcoin slump sees trades suspended on certain exchanges

http://www.bbc.co.uk/news/business-42457983

 

[Gordon - Commercial Finance]

Bitcoin slump sees trades suspended on certain exchanges

http://www.bbc.co.uk/news/business-42457983

I love how the article mentions that bitcoin has attracted the attention of major investors. It absolutely has not. I do a lot of work with major NY hedge funds, and have a single one of them even dabbled in bitcoin? Of course not.

Perhaps this is the start of the reality check....

 

[alex3215]

The bubble will burst. (The only people who dispute that are those with a vested interest in selling bitcoin).

The question is whether it will happen in 6 months or 2 years.

My advice would be

1. Avoid at all costs MLMs or schemes selling packages and ‘guaranteeing returns.
2. Only invest what you can afgord to lose
3. Have s clear exit point and stick to it. Under no circumstances wait for the top of the market
4. Buy with your head, not the hype

As much as I know, Bitcoin is not MLM or ponzi scheme earning. Some of altcoins are but Bitcoin isn't. Or I don't know anything about cryptocurrencies? hehe Thanks!

 

[Gordon - Commercial Finance]

Bitcoin is not MLM or ponzi scheme

Bitcoin itself is not a Ponzi scheme, just as “money” is not a Ponzi scheme. The point that I think was being made is that Ponzi schemes have sprung up around bitcoin, and the lack of regulation means they are going unchecked.

 

[Mark T Jones]

As much as I know, Bitcoin is not MLM or ponzi scheme earning. Some of altcoins are but Bitcoin isn't. Or I don't know anything about cryptocurrencies? hehe Thanks!

As @Gordon - Commercial Finance has said Bitcoin is legal and not a ponzi. However it is a magnet for suckers so attracts MLMs.

In my view the inventors of bitcoin must be laughing themselves silly at having pulled off the greatest illusion of modern times

 

[The Byre]

As Adam Smith said "Money is just a question of faith."

 

[Alan]

and the lack of regulation means they are going unchecked.

The same regulations apply as all financial products, as for example the insider trading investigation ongoing regarding Bitcoin Cash.

 

[Mark T Jones]

The same regulations apply as all financial products, as for example the insider trading investigation ongoing regarding Bitcoin Cash.

It isn’t regulated by the FCA. The n my opinion since it is solid almost exclusively as an investment it should be

 

[Alan]

Any uk business giving investment advice falls under the FCA, ****** or not.

 

[Mark T Jones]

https://www.fca.org.uk/news/statements/initial-coin-offerings

 

[alex3215]

Bitcoin itself is not a Ponzi scheme, just as “money” is not a Ponzi scheme. The point that I think was being made is that Ponzi schemes have sprung up around bitcoin, and the lack of regulation means they are going unchecked.

I think that only banks and govs can be 'downed' with bitcoin and blockchain system. But we are in time where banks are everywhere and it will be very hard to stay up with that.

 

[Gordon - Commercial Finance]

Any uk business giving investment advice falls under the FCA, ****** or not.

It’s not an investment of course as we’ve already discussed.
Also they’re not giving advice, they’re offering the bitcoin equivalent of execution only.

I think that only banks and govs can be 'downed' with bitcoin and blockchain system. But we are in time where banks are everywhere and it will be very hard to stay up with that.

I’m sorry, but this doesn’t make any sense.

 

[titanlist]

Invest Bitcoins to the lending company and choose a genuine company to invest for regular interest or compounding earning. Just like: xcoins , earn interest payments %- which are said to carry nice potential returns, If you already have some Bitcoins, put your Bitcoins to work for you.

 

[MBE2017]

There are hundreds of similar ****** currencies coming along, some have made some noise, others are what I would call under the radar at present. I just stuck a £500 gamble on a relatively new start up which has major backers, it might come off it might not.

Until trading in bitcoin and the like speeds up, it will be a gamble, but several are getting quiet fast now. Buying them is the easy part, selling can be a bit more cumbersome.

 

[The Byre]

One million lemmings can't all be wrong!

 

[Gordon - Commercial Finance]

Invest Bitcoins to the lending company and choose a genuine company to invest for regular interest or compounding earning. Just like: xcoins , earn interest payments %- which are said to carry nice potential returns, If you already have some Bitcoins, put your Bitcoins to work for you.

Nope sorry, this is just gibberish.

 

[Alan]

Nope sorry, this is just gibberish.

No its not, if you get through the terrible English.

What he/she/it is saying is use your bitcoins as loan collateral to companies that will take them ( Invest Bitcoins to the lending company .. xcoins ), and use the loan to invest in regular businesses that give a stable return return.

So imagine you bought £1,000 of bit coin a few years ago, and they now have a 'paper' value of £1million, that isn't actually worth anything until you cash out - but what if you leave it too late the bubble bursts and you have nothing - what if you cash out too early and it trebles and you lost out on an extra £2million.

So lend your £1,000,000 of BTC ( for a 10% fee ugh!! ) and get £900,000 in cash, now invest that in something more stable like per to peer lending and say get a 7% return on the £900,0000. I'm doing the math in my head but that doesn't seem great, but if you had a 15% return that would be better. It is collateralised lending. Of course the real punters will loan out their bitcoin to get cash to but more bitcoin

 

[The Byre]

The gibberish part is that if the underlying collateral goes bust, the whole plan, such as it is, falls into the dust from whence it came.

 

[Gordon - Commercial Finance]

So lend your £1,000,000 of BTC ( for a 10% fee ugh!! ) and get £900,000 in cash, now invest that in something more stable like per to peer lending and say get a 7% return on the £900,0000. I'm doing the math in my head but that doesn't seem great, but if you had a 15% return that would be better. It is collateralised lending. Of course the real punters will loan out their bitcoin to get cash to but more bitcoin

That is just the most horrendous idea. In fact, reminiscent of the collateralized debt obligation nightmare which made the 2008 crash so much worse than it should have been.

 

[Mark T Jones]

No its not, if you get through the terrible English.

What he/she/it is saying is use your bitcoins as loan collateral to companies that will take them ( Invest Bitcoins to the lending company .. xcoins ), and use the loan to invest in regular businesses that give a stable return return.

So imagine you bought £1,000 of bit coin a few years ago, and they now have a 'paper' value of £1million, that isn't actually worth anything until you cash out - but what if you leave it too late the bubble bursts and you have nothing - what if you cash out too early and it trebles and you lost out on an extra £2million.

So lend your £1,000,000 of BTC ( for a 10% fee ugh!! ) and get £900,000 in cash, now invest that in something more stable like per to peer lending and say get a 7% return on the £900,0000. I'm doing the math in my head but that doesn't seem great, but if you had a 15% return that would be better. It is collateralised lending. Of course the real punters will loan out their bitcoin to get cash to but more bitcoin

I’m not aware of any lender who would accept anything as volatile as bitcoin as collateral (and I know a fair few lenders)

Also, intelligent investors exit at the right time for them, they don’t wait for the peak or worry about what they might have eared - one of the big concerns about bitcoin is the fact that investors are so obviously unsophisticated and just chasing the curve - sadly many will lose money they can ill afford

 

[Alan]

I’m not aware of any lender who would accept anything as volatile as bitcoin as collateral (and I know a fair few lenders)

xcoin is the matching service between lenders and borrowers - you missed that bit of detail ( I'm guessing the OP has a reason to promote xcoin )

 

[nelioneil]

The bubble will burst. Everyone thinks so apart from those who own bitcoins.

I will not take it seriously unless the day comes where the likes of Amazon accept bitcoins for payment, or you can pay your taxes via bitcoins.

 

[MBE2017]

The bubble will burst. Everyone thinks so apart from those who own bitcoins.

Many who own Bitcoins expect the bubble to burst, but are happy to risk an investment for the huge rewards being obtained at present. If people wish to stay out fine, some are in with eir eyes wide open, some are just fools.

It has always been that way, it always will be.

 

[Xtm_Mike]

The bubble will burst. Everyone thinks so apart from those who own bitcoins.

I will not take it seriously unless the day comes where the likes of Amazon accept bitcoins for payment, or you can pay your taxes via bitcoins.

Likewise, those reluctant to invest are the ones shouting that it will burst. simply because they are desperate for it to happen for their 'i told you so' moment. They dont want to invest therefore desperate for it to fail so they don't feel bad about not investing when/if it explodes.

I 'own' a small amount but it's all becoming a bit boring now, just another distraction in life with all the apps on phones and constant fluctations, not worth the money that I could potentially generate.. I think we're in a bit of an Xmas drop but should come up a little over the next few days and when it does, i'm out.

 

[Chris34]

Likewise, those reluctant to invest are the ones shouting that it will burst. simply because they are desperate for it to happen for their 'i told you so' moment. They dont want to invest therefore desperate for it to fail so they don't feel bad about not investing when/if it explodes.

This is so true. The amount of patronising comments about people not knowing what they are doing and are somehow being 'conned' is unreal. But but but... the tulips the tulips, god damn it they told me to say the tulips, lol.

Don't forget what all the so called experts non other than the IMF said about the impact of Brexit immediately after the vote, these are supposed to be the 'experts'. The reality is the experts have little more of a clue than Joe Bloggs on the street.

You know what the Bitcoin talk is very much like the Brexit talk. The patronising comments about Brexit were that the voters were conned into voting for Brexit, and it wasn't the voters fault as they 'didn't know what they were voting for'. Well Bitcoin talk is much of the same, the people that are buying in don't know what they are buying into, lol, ??????????? For real?

Regarding the recent price, Xmas is always a bad time to gauge whether to hold or sell, it's the same in collectors markets you don't get a good price around Christmas because everyone is focusing on Christmas.

 

[Mark T Jones]

This is so true. The amount of patronising comments about people not knowing what they are doing and are somehow being 'conned' is unreal. But but but... the tulips the tulips, god damn it they told me to say the tulips, lol.

Don't forget what all the so called experts non other than the IMF said about the impact of Brexit immediately after the vote, these are supposed to be the 'experts'. The reality is the experts have little more of a clue than Joe Bloggs on the street.

You know what the Bitcoin talk is very much like the Brexit talk. The patronising comments about Brexit were that the voters were conned into voting for Brexit, and it wasn't the voters fault as they 'didn't know what they were voting for'. Well Bitcoin talk is much of the same, the people that are buying in don't know what they are buying into, lol, ??????????? For real?

Regarding the recent price, Xmas is always a bad time to gauge whether to hold or sell, it's the same in collectors markets you don't get a good price around Christmas because everyone is focusing on Christmas.

Lol. Remind me never to take investment advice from you

 

[MBE2017]

Lol. Remind me never to take investment advice from you

Slightly unfair IMO, Bitcoins value is based, as much as many other things on market sentiment. ATM it is gaining in value at an incredible rate, based on nothing of real value in normal circumstances.

I don't think Bitcoin will become a currency as we normally think of a currency, but it can be traded. Whilst the hype continues so will it's value, which could go up or down by 90% anytime. Most investors understand this, many simply jumping on the band wagon will not, they will like people who invested in properties think it will keep going up.

Bitcoin has made myself some money, I still have a small amount, but I am taking punts on other cryptos in 2018. That said I still think it will continue to gain in value, at least for a while yet.