Investor takes out $127,000 loan to buy cryptocurrency, loses 85 per cent

Discussion in 'Digital Currencies' started by ozcopper, Aug 14, 2018.

  1. GoldSilverPlatinum

    GoldSilverPlatinum Member

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    Only one thing comes to mind...…….

     
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  2. alor

    alor Well-Known Member Silver Stacker

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    un-wise gambler, bet on the long side of the bank

    wise gambler bet on the short side of the exchange :)
     
  3. goldpelican

    goldpelican Administrator Staff Member

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    Wonder how many times he's been told to just "hodl".
     
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  4. SlyGuy

    SlyGuy Active Member

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    You can learn a lot from this "market." The main take homes are not to invest in something you don't understand, not to invest with borrowed money, and to be highly suspect of financial and tech (BitCoin was both) investments not attached to any real physical assets (real estate, goods, etc). A ton of people have gambled on crypto, many used credit to do that, and those defaults will hurt lender side as well as the individuals who it bankrupts or cripples.

    This BitCoin bubble reminds me of the medical marijuana stocks five or six years ago: I see tons of people investing in something they don't even understand (since nobody fully understands BitCoin). With the weed mania, they were chasing ticker names with no regard for business models, assets of the companies, or P/E ratios. If it was associated with mary jane, though, its graph was going up exponentially. That was a shorter lived mania, but it's the most recent equities or investing bubble I can recall. Most of the major stock trading sites blocked or restricted those ticker symbols after awhile (when their shares were $25 or $50+ yet logical estimates of real worth were less than $1), and that was the beginning of the end.

    An even funnier mini-mania example was the "sports stock market" called OneSeason.com (which lasted about one season... less than one year, lol). I actually jumped into that one and made $1k or so since I enjoy sports and knew it would catch a lot of fish in the USA, but I was fully expecting my payout check to bounce - yet it didn't. The only big winners on that unsubstantiated "market" were the guys who designed the website and its marketing and their college buddies, who got all of the early IPO releases before the masses had heard of the concept and jumped onto the site. Like any mania, everyone holding the "shares" of nothing was left clutching at straws when the new influx of buyers leveled off.

    ...I could never get myself to give BitCoin more than a passing glance. Between the fact that nobody understands how or who controls the mining math problems and supply process (making it a fiat currency worse than the majority of past ones)... and the simple logic that "you don't get something for nothing," I didn't really need to dig any deeper. It is too bad so many people learned the hard way on this, but kudos to those early gamblers who saw a major mania brewing and capitalized on the public's greed.

    With any worthless asset, you can potentially make money jumping in and jumping out, but you don't want to be left holding the shares of nothing when the gullible buyers run out. Usually, once you've heard of the "market" for trending stuff like this, it's nearly - or already - too late.
     
    Last edited: Sep 13, 2018
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