Don't people realize every time you buy something with BTC, in the USA, they will have to file a Schedule D for capital gains/loss? Imagine buying stuff with BTC every day instead of dollars. The tax nightmare that would be...
I suppose some kind of intermediary would provide this service for businesses. Something like Block or... Visa. And the cost of these intermediaries' transaction+tax services would have to be less than the cost of existing credit cards' transaction-only service, or how else did we arrive in this brave new future? ;)
For those certain crypto will fail, are you investing in that?
Back on March 28 in the main crypto thread I mentioned an approach people can take if they are certain crypto is going to fail:
I'm curious if I'm the only one who believes Bitcoin can both go +200% and -100%?
For those certain that crypto will fail, why not buy "put options" on Coinbase stock (COIN)?
For example, 2024-01-19 PUT $80 would cost around $980/contract. If Coinbase hits zero, that PUT option is worth $80/share x 100 shares = $8,000. That's how I would play the cynical view of crypto: +7163% return if crypto crashes in 22 months, and -100% return if it doesn't.
Currently 2024-01-19 COIN put contracts at $80 strike costs $2260/contract, up from the $980/contract I mentioned 1.5 months ago. That 2.3x price jump translates to a +130% return for those who speculated the downfall of crypto would take Coinbase down with it.
As to the question I asked at the start of this post, my guess is people reply "No" and then explain the market can remain irrational longer than you can remain solvent... but I did mention an investment with a fixed risk earlier, which means you can decide how much you risk.
That was definitely a good idea
@MustacheAndaHalf and one could also buy put options on BITO for a more direct link to the price of Bitcoin. However, it's just so hard for me to outright gamble on something that has no rhyme or reason to it. I.e. because crypto defies all logic in every day of its existence, what advantage am I supposed to have in predicting the future price if I am applying reason and evidence? If I have no advantage in gambling, shouldn't I invest in stock/bond index funds with positive expected values rather than gambles with 50/50 odds - at best?
I'm a little more open to taking net short exposure to meme stocks, which are losing money while their stock prices are obscenely inflated, and all the while we're heading into a higher interest rate environment if not recession, and all the while aging as an internet fad or short squeeze candidate! That's a whole lot of reasons, and there is no valid counterargument that anything is "already priced in". Yet, I've lost thousands of dollars on little gambles like these and had a worst-than-coin-flip success rate, for completely illogical reasons such as a celebrity tweet, a less-bad-than-expected loss report, meaningless hype about NFTs that are obvious stock pumps, or simply optimistic markets. It is still tempting to look at some of these stocks and consider longer-duration bets. E.g. a bet that GME will be lower six months from now, not six days from now.
Does this justify the current value? Who knows? But much of the early internet demand was driven by porn and free music downloads. So even if It's screwed up, it may come to something.
The beneficiaries of the early internet were (a) those who got free porn and music downloads, and (b) those who started privately-held, cash-flowing businesses. These individuals obtained benefit in the form of either free information or cash earnings, respectively.
For people buying shares, however, internet businesses typically did not become invest-able until they were relatively mature. I.e. we didn't get to invest in porn sites, Google's search engine, Facebook's social media service, or a number of other innovations until they were already market leaders. Founders and VCs pocketed most of the benefits. Thus, whether investors experienced ten-baggers or 100% losses depended on the details, and especially the timing. IT stocks were brilliant in 1994, disastrous in 1999, brilliant in 2003, disastrous in 2007, brilliant again in 2009, and disastrous so far in 2022. The modern perspective is that Apple and Microsoft left a lot of money on the table by going public as early as they did. They could have raised shorter-term capital and sold themselves to retail investors at many times higher prices just a few years later.
The moral of the story is: Great innovations might come out of blockchain, but it is unlikely that business founders will rush out to sell shares / coins to the public if the idea actually has potential. Instead they will HODL to equity until they are sure their own systems are nearing a "top" and then they'll go public. It's similar to insider trades.
