TL;DR;(of this thread) We don't mind if you buy crypto as a hugely speculative investment, just please don't bullshit yourself or us about it either fundamentally or technically. And always buy it on a pullback.
Yea but the odds of making 5x are not the same as the odds of a 50% decline. There are plenty of long-shot bets you can make that have very high payouts but that doesn't make them good investments .... MegaMillions lottery tickets for example. Cryptocurrencies have no intrinsic value which means there is nothing to stop declines if panic sets in (like it always does) and it starts to free-fall. What is worse, below a certain price point it does not make economic sense for bitcoin miners to continue since it consumes (ever increasing amounts of) electricity to run those rigs. The whole thing is just a train wreck waiting to happen.
MegaMillions tickets dont have their value set in a global liquid market. Plus the value of those tickets dont increase the more people know about those tickets. Plus those tickets cant be used for remittances
Previously you were talking about crypto as an investment, now you are talking about its use as a currency for remittances. If you spend your bitcoin then you no longer participate it any upside. In any case I was making the point you can't say chance of 5x increase in value or chance of 50% decline like they are equally weighted - the odds of each event are not the same, if there is a 10% of a 5X but a 40% chance of it losing half its value (make up whatever numbers you want here) then obviously you would not want to take that bet. Also the value of crypto does not necessarily increase because more people know about it - that is demonstrably false as you can see from the recent price declines...I am pretty sure more people know about bitcoin today than Dec 2017....unless someone is going around wiping people's memories.
The point of my OP is that there is a lot of uncertainty with regards to those probabilities. If Soros Fund Management got them wrong by a lot, it means its not easy to get them right. BTC has limited risk and unlimited reward, very similar to an option contract. All that uncertainty increases the value of those options the same way that happens with listed options when the underlying company stock faces significant uncertainty. Most people that bash and dismiss BTC do it because in their mind there is no way that they are wrong, that is they assume certainty. Its usually because they suffer from overconfidence bias or because they are not market risk takers, because if they were, they would assign a higher probability to the chance that they are wrong. If someone admits that such uncertainty exists, then the value of option like payoffs increase and it starts to make sense to be long to such options
I agree with a lot of what was said above. Betting on crypto as a whole has a lot more upside than downside and the last 5 years or so has proven that the probability is just as high on the upside as the downwside, and the upside could be far far greater than the downside. Someone like PTJ who is revered as a god around here would take odds like that. Its possible that 2017/2018 saw the all time high but I also thought the same thing in 2014. Im not saying go all in but it makes sense to expose some small portion of your portfolio to it. Investing in Crypto is very risky but the reward has been insane. Its kind of hard to ignore the ridiculous sums some people have made. Very few investments have given the ROI crypto has pulled off in the last few years and that alone should command it some respect. I'm sick and tired of people yelling bubble, if you don't like it short it, otherwise stfu and let the forces of demand and supply work itself out.
The major problem with your OP, that it was 1+ year late. Timing is everything in this business. Our arguments would have been the same, but strangely, pricewise, you would have been right. That is not going to happen again. 1. HF guys are just as stupid as us. 2 months ago an idiot bought calls with 50K strike when buying the BTC outright would have been the better deal. Oh yeah, BTC was 12K that time. 2. That limited risk is still losing 80-90%, but still better than the option calls with losing everything. And no, not unlimited reward, price won't go up forever. At 7K the reward is pretty much capped at 200%. Here is an argument you fanboys always miss: To keep up the price at let's say 20K, Bitcoin needs incoming fresh money 36 mm everyday. That is a lot of dough to keep the dreams alive!