This segment from last night’s NBC News is essentially a 3-minute advertisement for cryptocurrency, spreading the customer base to women.
Not once in the segment does the word “speculator” appear.
The woman who centers the piece is asked, “Do you understand it all?” She answers, “No. I still don’t. And I never will.” She “happened to have a little money” so she gave it to her sister whose husband is into crypto. Now she spends 10 hours a day “immersed in crypto.” She “started to understand blockchain more when she got involved in NFTs.”
Now she goes to conferences and tries to get other moms involved in crypto.
This segment makes me want to put my head in my hands.
If this isn’t the definition of a mania, I don’t know what is.
If this isn’t the definition of a mania, I don’t know what is.
Wendy
The problem is just as much timing. The cryptos are well off of highs and now turning to go higher again. So in fact right now the mania is not in the market. We are just getting out of the market depression.
There is real value in cryptos. Tulips lost their value. Gold did not lose its value. If you study the open courseware at MIT on crypto Gensler now at the SEC did a very good course on it. You’d have a footing on what it is.
There is real value in cryptos. Tulips lost their value. Gold did not lose its value. If you study the open courseware at MIT on crypto Gensler now at the SEC did a very good course on it. You’d have a footing on what it is.
I agree that crypto is a mania. Why would I want a payment medium with higher transaction costs unless I was involved in criminal activity?
Still as manias go, it’s less than 0.5% of the US public and private net worth of $225 Trillion. I don’t see it doing much damage if it crashes. I’m more worried about anti-vaxxers and January 6th deniers.
Why would I want a payment medium with higher transaction costs unless I was involved in criminal activity?
The transaction cost has attracked criminals, but cryptos are not criminal. Gold has a higher transaction cost as well.
As proof of stake comes in assuming it is secure enough the transaction costs will drop.
There is a big reason to want cryptos. At least two of them Bitcoin and Ethereum have massive amounts of pent up spending power.
Musk might take bitcoin in the future but the characters who are having problems reporting their taxes from 2021 Musk did not need to deal with. There is a shift away from not paying taxes happening. Main stream people who pay taxes are getting more into this.
The IRS has them as assets. Capital gains taxes on larger amounts are lower than income taxes. Just a point there.
My art NFTs will be income taxes as I transfer Eth to USD. Art is a very interesting investment. It attracts a lot of people saying, “that collector paid xyz for that”! Same very thing.
My art NFTs will be income taxes as I transfer Eth to USD. Art is a very interesting investment. It attracts a lot of people saying, “that collector paid xyz for that”! Same very thing.
The high-dollar international art market is basically a money laundering and tax avoidance shell game.
The video is nothing but an advertisement using one of America’s current popular memes, gender.
A foolette and her money are soon parted. Who said that?
The Captain
The Origin of “A Fool And His Money Are Soon Parted”
This phrase is at least 460 years old. It was used by a poet named Thomas Tusser in a poem he wrote called Five Hundred Points of Good Husbandry, in the year 1557. While the wording is a bit different, the expression is still similar enough to the one that’s used today:
“A foole and his money be soone at debate: which after with sorow repents him too late.”
Only in part is it a money laundering and tax avoidance shell game.
In larger part it is a better bet for intergenerational wealth than leaving a major corporation to your heirs. All corporations have a timeline of one week to 350 years. The odds that MSFT is here 350 years from now is bad. But if Bill Gates were to leave an art collection to his heirs 500 years from now it would probably be worth a massive fortune. While it would only be one asset class to leave his heirs it would be the best performing asset class.
That mix of best performing asset class and Eth is dynamite. Most of it is completely legit, taxes are being paid etc…
Remember there is someone behind you saying buying and selling equities is a shell game.
All corporations have a timeline of one week to 350 years. The odds that MSFT is here 350 years from now is bad.
That is completely irrelevant. That’s because everything eventually disappears/dies/etc. The current value of Microsoft is the discounted present value of all the future cash flows for the 350 years.
There is real value in cryptos.
Maybe. The question is, how exactly do you measure that value?
The full context of Msft’s value 350 years from now is for intergenerational wealth. It is relevant to the high end collectors we are discussing.
I suppose. I mean just look at the financial press - they constantly talk about intergenerational wealth that stems from art, other collectibles, and precious metals. And they almost never talk about intergenerational wealth from mundane things such as real estate, business ownership, and capital allocation.
The valuation goes to digital scarcity in large part. Just like gold is a rarer metal.
How do you measure “digital scarcity”? If there were just 20M bitcoins, I could understand it. But there are 20M bitcoins, and many etheriums, and many crodinhs, and many sonmaras, and anyday now there could be a bitcoin prime, and then a bitcoin prime two, etc. That doesn’t sound like scarcity to me. That sounds like an unlimited supply of cryptocurrencies!
How do you measure “digital scarcity”? If there were just 20M bitcoins, I could understand it. But there are 20M bitcoins, and many etheriums, and many crodinhs, and many sonmaras, and anyday now there could be a bitcoin prime, and then a bitcoin prime two, etc. That doesn’t sound like scarcity to me. That sounds like an unlimited supply of cryptocurrencies!
From what I see, the value in crypto may be as an alternative to the 7.5% the Financial Services industry skims from the economy overall. If crypto eventually becomes a medium of currency with lower transaction costs, it may have value. If not, what’s the point?
Gary Gensler also points out that if crypto is successful, it will have the affect for forcing the financial services industry to reduce “the slim”. Not an investor, but I’m all for crypto being successful and taxed appropriately.
<From what I see, the value in crypto may be as an alternative to the 7.5% the Financial Services industry skims from the economy overall. If crypto eventually becomes a medium of currency with lower transaction costs, it may have value. If not, what’s the point?>
My understanding is that cryptocurrency is a cash alternative.
The transaction cost to transfer the USD as cash in hand or by EFT from one savings/ checking account to another is ZERO. It doesn’t get much lower than that!
The 7.5% the Financial Services industry skims from the economy overall does not apply to pure cash transfers, but to the many elaborate non-cash services and products invented by said Financial Services industry. Anyone who avoids them will avoid the skim.
So a one-to-one comparison would be USD cash to crypto cash.
Crypto’s value is highly speculative. New cryptos are being issued all the time so the amount is anything but fixed. I think it’s a Ponzi scheme, a classic mania and bubble.
My understanding is that cryptocurrency is a cash alternative.
Yes, but the value isn’t in the Bitcoin, it’s in the blockchain technology that might allow us to cut the bankers out of the transaction. At least that’s what Gary Gensler seems to believe.
My understanding is that cryptocurrency is a cash alternative.
Very few of us are conducting our financial lives in cash transactions (i.e., mailing someone across the country paper US currency in a stamped envelope.) We’re using an intermediary like a credit card or a bank wire transfer. That’s the market the experts seem to believe that crypto has some prospect of disrupting.
My understanding is that cryptocurrency is a cash alternative.
Wendy,
I agree for a few major reasons with the IRS Cryptos are not currencies at all but assets.
At one point earlier on the larger number of people who bought crypto would for ideological reasons also be buying gold. Often to evade government scrutiny.
Today the discussion is shifting more and more towards contracts and Ethereum. That might go into another mania later this year if the difficulty bomb goes off well. Eth’s contracts, NFTs, are a very powerful tool. You do not have to know the other party to establish trust in a trade.
I’m going to walk out on a limb and suggest that none of us have any idea what anything will be worth 350 years from now.
Adding more context odds are almost none of the major corporations will have survived. Think old major corporations you might be left with beer companies like Guinness. But really even that company is gone. Established in 1759 it did not make it 350 years.
Yes none of us know which art pieces will matter in 500 years but the major collectors are very savvy and are playing it like a roulette table placing their bets across the table to cover the odds. For them right now the prices are not high. The CARG of investment art is so good the high end collectors make out extremely well even while they are alive.