Bitcoin crashing back to reality

Looks like bitcoin is making a dramatic fall from its peak. People are losing mega money in this crypto. I never bought into the crypto. Its just too speculative and less of a currency. There is no profits or assets that back it up. Just an counterparty that believes it has real value. With the mega price slide, i think people are losing faith.

I like to pretend I understand the stock market but crypto is a totally foreign concept to me.

Here too. It doesn’t seem like there are earnings to back it up. The limited supply of Bitcoin is appealing but demand will depend on its reliability and usefulness as a currency

That’s my issue with it. If it was currency I’d consider it.

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Ain’t nobody gonna mess with my beanie babies

That is funny shit right there.

What a surprise that something with no inherent value, no physical assets, like factories or products, or some sort of valuable service, would eventually face a day of reckoning.
How is the world affected, whether a bitcoin is worth 60k, or 60 cents?

I guess that depends on how much of it you own? For some, might have a big effect…for others, no effect.

People spewed all the same bromides & clichés a few years ago, when Bitcoin slowly drew down to $3K after hitting $20K.

Years later it would hit $60K.

This is nothing new. All these negative comments, including the dumb & inapplicable tulip mania analogy, are just wishful thinking by people that are hostile to crypto because they don’t understand it.

YAWN.

The people that bought in at less than $1,000 (some of them less than $1) are neither sad, nor scared, I assure you.

I don’t disagree, but it is likely rattling other investors that are not in at crazy low prices. When you scare off these new investors, the value will not sustain high levels of value since the only “value” is that someone else is willing to buy your bitcoin. If you have something that nobody will buy, then you don’t really have an asset.

I don’t have negative comments unless me saying I don’t understand crypto and won’t purchase crypto is considered negative. I don’t see assets or other value to Bitcoin. Computers create Bitcoin from a program and it’s difficult for me to spend and easy to lose if I forget my password?

I find tulip mania applicable, it seems like the value in crypto is from FOMO and little else.

Sounds like the democrats

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Yes that was my biggest beef with Bitcoin too

Its worse than that…spending Bitcoin creates capital gain/loss events since its classified as property (not a currency) by the IRS. Imagine the bookkeeping nightmare!!!

The value of Bitcoin to me is really more in the validation of using blockchain as an underlying distributed uncorruptable transaction ledger technology. Remember that I am a financial and tech nerd…

Depends on how long you hold it. It could be taxed at ordinary income. I have zero interest in the tax headache of using crypto as a currency.

IMO, there is HUGE financial risk here. Many people are using their coin as collateral. What they do is get a loan, secured with the coin so they don’t have to liquidate and subject to the tax implications. This is really no different than your traditional stocks. The issue is a massive downswing can trigger the loans being called. Lenders can be holding a bag full on nothing if crypto crashes.

This is the worst strategy of all. Borrow fiat with crypto collateral so you can double down and buy more crypto. If you were going to secure the loan with crypto and buy a house, at least you have a house you can mortgage to payoff the loan if crypto crashes. If you use your loan proceeds to buy more crypto and it crashes, you and the bank have ZERO.

WOW,

Yes but its only taxed as ordinary income due to the taxation of short-term capital gains.

It doesn’t surprise me to see you say this. Uninformed halfpinions like this are a dime a dozen.

The value in crypto is having a decentralized currency protocol that cannot be controlled, manipulated, & endlessly debased by a corrupt central government beholden to special interests (which all central govts are).

The fiat money system, as its name implies, is subject to political corruption. It creates a race to the bottom that robs poor people who don’t own assets & have no bargaining power to keep their wages up with inflation. It is the primary instrument by which the rich steal from the poor.

If Democrats & left leaners had any brains, they would be all in on crypto for this reason. But most are clueless and keep clamoring for the hopelessly corrupt status quo. Republicans too for that matter.

Heres the thing, as soon as bitcoin really competes against the dollar and the euro, governments will regulate it into oblivion.

For those betting their futures on bitcpin, i really hope im wrong. But at 54 years old, i cant recover from a risky bet so ill be sticking with more traditional wealth building tools.