So now that most cryptos are off 50% in the last week or so, the stories are starting to come out.
From the middle of a story in WaPo:
The industry’s surge has drawn in a widening circle of Americans: One in 6 now say they have invested in, traded or otherwise used cryptocurrency, according to a recent Pew Research Center study. And that pool is increasingly diverse. Forty-four percent of those who have bought or traded crypto in the past year are non-White, and 35 percent have annual household incomes below $60,000, according to a poll over the summer by NORC at the University of Chicago. https://www.washingtonpost.com/business/2022/01/25/crypto-co…
Regulation (belatedly) coming.
One anecdote in the story about the NFL player who converted $750,000 of his salary to one particular crypto… now worth about $35,000.
One anecdote in the story about the NFL player who converted $750,000 of his salary to one particular crypto… now worth about $35,000.
Yep they are assets not currencies.
At some point they will rise again. Not all of them and not evenly. But the market will be back. It is not going to end now.
The stats are interesting. Someone in a household with a below $60k income is not buying all that much obviously. Regardless the uses are many. But I would hazard the biggest use is artwork so far. Finance rivals that if not leads it. I do not have those stats.
It’s already known that crypto has risks that other assets don’t. Given how new it is, I’ll bet that there are additional risks that nobody has thought of yet.
At least tangible assets have some utilitarian value. Crypto cannot be eaten, burned for fuel, lived on/in, or used to build tangible things.
The talking points of the crypto bubble sound a lot like the talking points for Dot Con stocks, no-money-down real estate, oil/gas deals of dubious quality, time share real estate deals, and gold/silver/platinum mines.
The story of Melania Trump’s NFT hat sale. Because SOL headed south last week she did not meet her reserve. She pulled the auction for a blip of time and then resumed her auction. SOL had dropped 40% during that. SOL is trying to complete with Eth which was down 30%. SOL’s MC is much smaller. But SOL is proof of stake. Eth is proof of work. Eth 2.0 due in June will be proof of stake. If Eth is rising some of that is signaling that Eth 2.0 technically will work.
The reason the crypto was off last week, the markets are looking down. Since crypto is the most risky of assets investors pulled out quickly. That does not mean for a moment crypto is over or will disappear. If anything the smart money in this space will be buying.
One of my husband’s students was asking me for advice about choosing his first broker and how to invest. I advised against Robinhood and Dogecoin (his first choices) and gave him a couple of books. It is really hard to convince those Gen Y guys not to follow the fads. They’ll listen to their gaming guild instead of Warren Buffet.
Forty-four percent of those who have bought or traded crypto in the past year are non-White, and 35 percent have annual household incomes below $60,000, according to a poll over the summer by NORC at the University of Chicago.
I suspect this will be close to the demographics of those who buy lottery tickets, with the lottery rainbow chasers being even poorer than those seeking gold in crypto.
If anybody has a study of lottery ticket buyers, please post.
Forty-four percent of those who have bought or traded crypto in the past year are non-White, and 35 percent have annual household incomes below $60,000, according to a poll over the summer by NORC at the University of Chicago.
I suspect this will be close to the demographics of those who buy lottery tickets, with the lottery rainbow chasers being even poorer than those seeking gold in crypto.
rnam,
I have no idea what you are assuming about middle class to poor people. I wont guess.
But 44% of Americans roughly are not white. What are you saying?
If 35% of the households have an income under $60k that is a minority of a minority. Crypto is becoming necessary to do business. Since the figure is 35% some 65% have incomes over $60k.
A majority of each and every minority is in the middle class.
Everyone needs to be mindful when stats are used by the press.
The reason the crypto was off last week, the markets are looking down. Since crypto is the most risky of assets investors pulled out quickly. That does not mean for a moment crypto is over or will disappear. If anything the smart money in this space will be buying.
A lot to unpack there. Melania’s hat story shows why crypto is useless for normal transactions. And crypto clearly isn’t a store of value. You have no idea if it will be there if you need it. And what do you get for accepting all that volatility? It doesn’t pay interest or dividends. There is no enterprise value. I guess I’m dumb money, because I don’t see the appeal.
I guess I’m dumb money, because I don’t see the appeal.
I’m the same way. Crypto has on and off been a topic of discussion at my poker game for years now, with one guy who got in early and made a bunch of money, and another few who’ve dabbled. One of my friends who I consider a smart guy recently said he’s come to see the value as a replacement for gold in asset allocation. I can’t agree with that either, though I can see the idea being appealing.
There’s just no history supporting that people would go to crypto as a ‘flight to safety’ in crisis times the way they have gold in the past. And the recent situation with crypto dropping even faster than stocks is counter to what that idea would suggest. Gold has been rising the last few weeks, in its traditional negative correlation with stocks.
'38Packard - DS one of the rare 30-somethings that knows about The Fool
Youngsters (AND some oldsters) who have sought my opinion, I make a point that they look at all available reading on the Grand Dutch Tulip fiasco. IMAO, I think it bears useful comparisons to the ‘crypto craze’.
I also refer them to Jamie Dimon at JP Morgan. He originally was quoted as saying the craze “was not going to end well”. He has later softened that position, but as far as I know he still does not recommend ‘investing’ in the scheme.
We can only hope that when it finally does go splat, it doesn’t contaminate too much of the overall financial landscape.
At least tangible assets have some utilitarian value. Crypto cannot be eaten, burned for fuel, lived on/in, or used to build tangible things.
Neither can bonds, stocks, or bank accounts. Fiat currencies only if you actually have the currency, and then it’s the paper content not the alleged value - burning a $100 bill provides exactly as much heat as burning a $1 bill.
Some of the people in cryptos are old hands in making money. Or new hands with a knack.
Same argument I heard during the dot-com craze. Of course some people made money: I was one of them. Of course a LOT of people lost money because they were following fads which did not create any enduring value.
Crypto, so far as I can tell, is a solution in search of a problem. The only thing it has solved so far is for criminals to transfer money anonymously, and even that turns out to be less true than advertised.
Otherwise it’s a huge energy hog, doesn’t facilitate commerce in any meaningful way, is more volatile than almost any currency or metal you can think of, is not universally accepted, has spawned dozens of (also useless) imitators, thus insuring an infinite supply of coinless coins, the exact opposite of the original promise that it was “limited”.
But I admit some people will make money from this, just as some made money from Beanie Babies and tulips. Thing is, at least those you could put o a shelf and look at when the mania stopped.