I don't pretend to understand the entire crypto thing but it has no tangible worth backing it?
Is it all just a big Ponzi scheme then?
I think it probably fits that description yes.
The only thing that causes prices to increase is more people buying. Compared to traditional stocks it doesn’t make sense.
Bitcoin has no intrinsic value, only that there’s only ever going to 21m made. So unlike fiat, it’s finite.
It has zero use as a currency in the traditional sense. Why would you buy something with BTC when it’s so volatile?
People that hold BTC believe it’s going to be worth multiples of current values so don’t use it to buy cars/houses etc. It’s a nominal store of value based on blind faith.
A friend of mine turned €16k into €12m and cashed out. Put it all into property. Had zero clue what he was doing just found himself in the right place at the right time. Even he doesn’t understand the fuckin’ thing.
Those types of returns (he’d Bitcoin and Ethereum) are never going to happen again with BTC and ETH. So people are trying to find the next one. BTC looks as steady as a credit union savings account compared to the 1000’s of scam coins out there now.
It has suckered a lot of average joes into investing in shit. People are using it as a moonshot to attain a deposit for a house. Wages aren’t high enough to save the traditional way so people are risking all of their savings in the hope of getting a x10 return.
If you find a few spare K down the back of a couch and don’t care about it going to zero then do a bit of research and have a bit of fun but that’s not for everyone.
I invested about €30k over a few months starting January 2020. At its height it was worth over €80k. In hindsight I should have pulled out, paid the CGT and walked away from the whole show but greed got the better of me. I set €100k as the walk away target and it all crashed over the last 6 months or so.
Portfolio worth €18k. now. The S in SSB is justified