Price collapse proves crypto has no value and is worthless

[YouHaventDoneAnyWork]

Headline in the newspapers today.

Sad for anyone who bought into this pyramid scheme without understanding the technology (few really do) and therefore risks and has now lost money, but AIBU to think this should be banned like the financial fraud and environmental disaster it is and hoping this is the beginning of the end.

It’s already gone back up by 5% today. In the long run it will go up even more. There are planned changes this summer which will eliminate much of the environmental impact of some crypto which won’t be produced by mining any more.

I googled as not really following it

www.independent.co.uk/tech/terra-luna-ust-crypto-price-crash-b2076655.html?amp

I suppose these people could hang tight and hope it rebuilds - the type they have that is

"But "real" money only has value because people agree it does. And as for tangible assets, then if you can covert your crypto into money to buy a house then how is it any less real than the £10 note in your pocket (which is basically an iou)

If we were still operating on the gold standard, the point about tangible assets would be more convincing, but I'm struggling to see what you mean otherwise."

Crypto evangelists like it because it's uncentralised, but that's why it'll never work - not enough people will trust it because without that centralisation it's built on a foundation of sand. That stability will always remain elusive until it's regulated, and then what's the point of it anyway?

There was a "crash" like this about a year ago- by November the price had doubled. Plenty of people making money from those who buy high and sell low.

"Trust No One: The Hunt for the Crypto King" doco on Netflix was about what turned out to be essentially a cryptocurrency ponzi scheme..

YANBU - but still people will refuse to see that the stock market is to all intents and purposes the same. The capitalist economy is all smoke and mirrors.

Are you suggesting that traditional banking is run by those with strong moral compasses?

I'm totally ignorant when it comes to Crypto. Can anyone recommend a good podcast?

I heard yesterday last a tethered coin as it was dropping by 98% someone piled in with £2.6m, today it's worth 1k

It's like any other stock.

It's a terrible waste of resources.

It is a pyramid scheme because the people who build the exchanges take a cut and cash out early. They need more and more people to buy into their particular type of coin and their exchange to keep going.

Bitcoin will probably survive and become regulated. But the little and wierd ones could easily pop.

This is a blip and people will buy again in the dip. Remember it last tanked in about 2016 but then eventually ended up being multiple times more last year. The tech is here to stay.

I actually think Ethereum will eventually end up worth far more than Bitcoin as the tech behind it is superior, flexible and scalable.

That said anyone putting life savings types of money in crypto currently is quite silly. Things will change though as regulation is moving closer and more institutions are starting to take it seriously. The legitimacy and greater protections will push the value up as it will become closer to a standard investment. Those who invest on the ground floor who put small numbers in the big crypto players and hold out could stand to make a killing in the long run.

User135644 · 13/05/2022 20:12
It's like any other stock

No, it is not like any other stock. Can you give another example of something that has zero intrinsic value. All other stocks have a value in terms of IP, product, brand, assets etc. You can see their cash flow, turnover, business model and strategy etc.

Currencies that are not based on gold standard (most) are backed by government gilts (fiat currency). Crypto has none of these things, in fact I’m not sure it’s known who invented it fully.

I am a currency trader. I’ve always stayed out of crypto cos I thought too risky. I did buy about $100 worth of Bitcoin a few months ago, just for the sake of it. Now worth $44…. Pushy advertising has drawn in lots of inexperienced investors hoping to get rich quick, who are now nursing enormous losses. Some people will now say now it’s time to buy as prices so low… But in the words of the great Bob Dylan “when you think that you’ve lost everything, you find you can always loose a little more…

You say that businesses have intrinsic value but that's just not true in all cases. I deal with a lot of private equity backed or early stage tech businesses that are developing a product (often software) that may or may not take off. It's only really worth what people will invest and at the point they can no longer get funding they can fold. If they keep going then they may gain intrinsic value but they have a short life relatively speaking and have to continue develop new products (or markets) or aquire them to survive.

@ZenNudist

I work in early stage tech companies and have over 25 years experiencing doing so, so you and I both know how they’re valued by PE, although if it’s that early stage it would be small seed funding. They may not have a product/IP yet but the management team will have solid credentials and a robust business plan of how their R&D/dev teams expect them to get there including key milestones etc. else PE wouldn’t even look at them. Their assets at this point are arguably knowledge and yes they may not make it but you can buy into a clearly laid out concept and it’s potential.

Can you explain how anyone investing in crypto has a similar conversation on what the expected product/business plan is etc. Investors are buying into a pyramid scheme as it’s the only way the stock increases in ‘value’.

Agreed. There is no fundamental basis for the value of crypto. No matter how much money central banks print, a national currency will always have it's strength founded on that county's GDP / economic outlook. Yes, of course there will be people who buy the dip and make some money, but most will be trying to catch a falling knife and will loose even more. I guess it's a bit like modern art, though. As long as there is a critical mass of people willing to buy it, then it has value, but expect huge volatility. Invest in crypto as a fun hobby (if you like that sort of thing), don't be that person who loses their life savings!!!

Ask the government of the country/IES whose domestic electricity supply is drained to support it.

And then look at the enterprises that benefit from it.

You do the Googling, save you blaming me for the deficiency of whatever sources I might provide.

I was advised to do this a few months ago and was absolutely gobsmacked at what I found. I already presumed it was a kind of pyramid scam, but am totally floored by what is actually is.

YABU - it clearly does have a value, just less than it had a few weeks ago.

So, no one o. This thread seems to know the first things about crypto or how it works.

It reminds me of that joke: When did you become an expert in nuclear physics?

Last night!

Markets shift. Just like in stocks- don’t invest anything you aren’t prepared to lose. There are no sure things. Some people have made millions and others have lost everything. Very much the same with every type of investments, except crypto is much more volatile.

It’ll come back up again at some point. But you’d need a crystal ball to know when that will be.

General rule of thumb when investing: Buy up when stocks are failing, sell up when stocks are doing well.

The very beginning of the year 2020 was the best time to invest as that was when vast swathes of the economy were shutdown. Once things got up and running again, sputtering into life, then people sold their investments off.

At present, with the stocks for places like Microsoft, Amazon, Netflix etc all tanking, it's because people are pulling their money out. Who can blame them? With inflation at an all-time high (economy overheating), I currently don't trust my money being in anyone's hands.

😥but I don't trade crypto... Haven't you ever brought something just for the hell of it? A new watch, a cake, a dress?

I trade oil, high-grade copper and EUR/CHF 😀It's a lonely existence! That's why I like forums.