Author Topic: A conservative 'stache just halved his doubled position in ETH; feels wrong  (Read 598 times)

Sjalabais

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After a friend of mine quit his job and went all in as a crypto adviser to institutions in 2017, I moved some money into Ethereum/ETH. I didn't have the heart to call it an "investment", felt more like gambling. The stack quickly doubled in value, and I wanted to withdraw half so that all that was left was true toy money. Kraken.com crashed faced first in that period though, and my money was inaccessible.

What followed was a well-known 3+ year dry spell until we are at 1k again in the pandemic investment bonanza. So I withdrew my half of "real money" this week and will wait out the rest.

What's funny though is that this feels...wrong. What has my little stack contributed to in this world? Whose money is still carrying my name on it? What have I really done to have padded my earnings here? It sounds stupid even to me to write these thoughts down, but they give me pause nonetheless. Stocks and whatnot can be just as stupid, but, at least, they can sometimes be rationalized to have "worked" a real world benefit. Anyone else having these qualms?

bwall

  • Handlebar Stache
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"Ours not to reason why, ours but to do and die."

Or so it feels many days.

In the real world, stocks do serve to allocate capital to companies. See Tesla's stock issue (last month?) for $5billion, which it then used to pay back bondholders who could have taken over the company had they not been repaid. A wave of the magic wand, more stocks issued and Voila! $5billion in Tesla's bank account. No stocks issued = no money.

Many startups use the money from issuing stock to pay bills, rent, hire employees, do research, etc. The secondary market that we participate in can veil these actions to a large degree.

Now how does crypto fit into this? What value do they bring to the table? There's no company issuing crypto as stock per se, to use as a capital allocation method. In my opinion, crypto serves merely as a store of value, like gold. "Of what use is that?" One may ask, but only one who has never lost everything due to war, inflation, fire or theft.

YMMV.

cool7hand

  • Pencil Stache
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I break these questions into policy and practical. From a policy perspective, I'd favor better incentives that require adding value. But from a practical perspective, I'm not going to allow my policy concerns to prevent me from reaping benefits until something changes.

Sjalabais

  • Bristles
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Thank you for very good answers!

But isn't it difficult to see a different between policy and practice? Shouldn't the first guide the other? In practice, we don't eat farmed salmon, because aquaculture is destroying wild life and ecosystems at an alarming pace. For example.

Anyway, I understand it is hard to do everything right all the time, just got surprised by my reaction to that one.